Varmora Granito Share Price: Stock Lists At 4.73% Premium On NSE; Should You Hold or SELL?

Shares of Varmora Granito made a modest but positive stock market debut on Tuesday, 29 September, listing at a premium to the IPO price on both the NSE and BSE.

The Varmora Granito IPO listing came in better than the grey market's expectations since the GMP faded ahead of the debut.

On the NSE, the stock listed at Rs. 155 per share against the issue price of Rs. 148, a premium of Rs. 7 or 4.73%. On the BSE, it debuted at Rs. 152, a premium of 4 or 2.7%.

At the NSE listing price, the tiles maker's market capitalisation stood at about Rs. 3,503 Cr, with a post-listing P/E of around 60.7x.

By around 1 PM, the stock had held on to its gains over the issue price. On the NSE, it was trading at Rs. 153.69, up 3.82% from the IPO price, slightly below its listing price.

On the BSE, it was at Rs. 153.40, up 3.78%, a touch above its Rs. 152 debut level.

The debut came on a weak day for the broader market. At around 1 PM, the Nifty50 was trading at 22,682.95, down 97 points or 0.43%, while the BSE Sensex was at 72,411.40, down 360 points or 0.50%.

According to an Economic Times report, the sharp fall wiped out nearly Rs. 4 lakh crore from the combined market capitalisation of BSE-listed companies within minutes of the opening.

Shivani Nyati, Head of Wealth at Swastika Investmart Ltd, called the debut positive but said valuations remain demanding at around 60x post-listing P/E.

"Investors already holding the stock to keep a stop loss around Rs. 145, and fresh positions may be considered only after better price discovery and sustained earnings performance. The key levels to watch are Rs. 148 to Rs. 145 on the downside and Rs. 155 to Rs. 160 on the upside.
The listing follows a lukewarm response to the offer. The Rs. The 708.02 Cr IPO was subscribed 1.58 times overall between 22 and 24 September, with bids received for 5.34 crore shares against 3.39 crore shares on offer.

The price band was Rs. 140 to Rs. 148 per share, and the minimum application was one lot of 101 shares, which needed Rs. 14,948 at the upper end of the band.

The issue was a mix of a fresh issue worth Rs. 320 Cr and an offer for sale worth Rs. 388.02 Cr by Katsura Investments, which sold 2.62 crore shares. JM Financial, Goldman Sachs (India) Securities and SBI Capital Markets were the lead managers, while KFin Technologies was the registrar.

Varmora Granito is a Gujarat-based manufacturer of ceramic and vitrified tiles.

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