Shriram Properties Pares Some Of Its Listing Losses: Here’s What Investors Can Do

Amid market mayhem that led the Nifty to collapse by 500 points on December 20, 2021, Shriram Properties had a weak listing. The shares of the company as against its IPO issue price of Rs. 118. debuted at a price of Rs. 94, a discount of 20 percent, on the BSE.

The IPO of the real estate developer that was open for subscription between December 8-10 saw good investor response with subscription to the tune of 4.6 times. Through the public issue, the company amassed Rs. 600 crore.

For the issue, brokerage firms had a mixed call with some of them like Angel One recommending a 'Subscribe' on the issue, while Anand Rathi signalled an 'Avoid' citing net losses at the firm since Fy20.

The GMP or the grey market premium that the stock commanded as on December 19 signalled a rather muted listing, with a premium of just Rs. 10.

So, all in all the weak GMP plus the subdued sentiments on the D-Street led the shares of Shriram Properties to see a tepid debut.

Received Shriram Properties shares in your demat: Here's how you can act upon as per experts

Likhita Chepa, Senior Research Analyst, CapitalVia Global Research is of the view that though the issue of Shriram Properties was reasonably valued, the ongoing market sentiment led to its weak listing. Further she goes on to advise that investors need not add this stock at the current levels as a further 15% downside is expected in the next few trading sessions.

"With the US Federal Reserve planning to increase the pace of bond purchases, we expect FIIs to pull out their money in the coming months, due to which high-beta sectors like infrastructure and realty might witness some selling pressure", she adds. Long term investors can however add the stock at Rs. 75-80 levels.

Swastika Investmart's Santosh Meena on the IPO listing of Shriram Properties said that the IPO received lukewarm response owing to the losses while other developers in the space were booming over the last 2 years. Further, the scrip shall be a suitable bet only for aggressive investor class, while others may consider Sobha, Prestige, or Brigade.

Meanwhile, amid the bloodbath that the D-Street witnessed today, Realty index had been the weakest, trading with a cut of 6 percent, while the stock of Shriram recovered partially from its listing losses and traded with a cut of over 13% at Rs. 101.9 apiece on the NSE.

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