CAMS, Chemcon IPO listing strategy; should you buy, sell, hold these stocks on market debut today?

By: and |
Updated: Oct 01, 2020 10:01 AM

According to the analysts, the grey market premiums were more or less stable for CAMS and Chemcon Speciality Chemicals this week as compared to last week.

RIL, TCS, stocks in focusThe banking index was higher by 6.5% this week, outperforming Nifty’s gains.

CAMS and Chemcon Speciality Chemicals shares are set to list on stock exchanges today. Amid Indian share market volatility, recent IPOs’ grey market premiums remained stable. According to the analysts, the grey market premiums were more or less stable this week as compared to last week. The Rs 318-crore Chemcon Speciality Chemicals IPO was open for subscription during September 21-23, with a price band of Rs 338-340.

Manthan Mehta, Head Unlisted & Private Equity Rurash Financial Services Pvt Ltd, told Financial Express Online: Chemcon Speciality Chemicals shares were trading with a premium of Rs 353-357, while CAMS was at a premium of Rs 355-357 ahead of listing. Earlier this week, Chemcon Speciality Chemicals premium dropped to Rs 200 over the IPO price, from Rs 300-350 last week.

Check live prices: Computer Age Management Services

Chemcon Speciality Chemicals IPO was subscribed 148.94 times, becoming the second most subscribed public issue this year after Happiest Minds Technologies, which saw a 151-times subscription.

100% listing gains for Chemcon Speciality Chemicals

Chemcon is a leader in the chemical segment, looking at pharma trends and positioning. Manthan Mehta expects a bumper listing with 100 per cent gains at Rs 680-700. He advises that investors should hold Chemcon shares because the company is doing well.

Check live prices: Chemcon Speciality Chemicals

Expect 20% listing gains from CAMS

According to the analysts at Angel Broking, grey market premium shows healthy listing gains for Computer Age Management Services (CAMS). The stock price direction depends on the fundamentals of the company. “There is strong revenue visibility for CAMS, as they have a 70% market share of the MF registrar business. Best past is, 5 out of 4 TOP AMC AUM wise and bank-led MF are CAMS clients. The leader and bank-led MF are gaining market share which is positive for CAMS revenue visibility,” said Jaikishan Parmar, Senior Equity Research Analyst, Angel Broking Ltd. Considering strong revenue visibility, healthy financials, and generous dividend payout policy, investors can expect more than a 20% listing gain.

Who subscribed how much during bidding process

The price band for the CAMS issue was fixed at Rs 1,229-1,230 per share. During the 3-day bidding process of CAMS IPO, retail investors subscribed to their portion 5.45 times, QIBs 73.18 times and Non-Institutional Investors (NII) subscribed 111.85 times. On the other hand, Chemcon Speciality Chemicals got fully subscribed within a few hours of IPO opening on the first day of bidding. Retail investors subscribed their portion 40.43 times, NIIs oversubscribed their quota 449.14 times while QIB subscription was at 113.53 times.

What to expect from CAMS, Chemcon listing?

Investors should usually decide their strategy for listing day on the very day they have bid for the shares. If an investor has not made up his mind, the strategy should be to book at least half the profit on a listing day. “Seeing the current market valuations are at a high and on listing stocks usually are quoted on the higher side so booking half the profit should be a wise strategy,” Vishal Wagh, Head of Research, Bonanza Portfolio Ltd, told Financial Express Online. For those who bid for the shares but did not get them, Wagh said that markets are at premium valuation right now. “In this sort of a market environment only listing gains should be the target,” Wagh added.

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