Equitas Holdings shares surges 30% on debut; What should be your trading strategy?

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Updated: April 21, 2016 4:36:21 PM

Equitas Holdings stock listed on BSE and NSE with gains of over 30 per cent on debut against the issue price.

Equitas Holdings share priceEquitas Holdings stock listed on BSE and NSE with gains of over 30 per cent on debut against the issue price. (Express Photo)

Did you get allotment of Equitas Holdings shares in the IPO? If you have, you must be wondering what to do with the holding after the gains witnessed by the shares on listing.

After the over 30 per cent rally on listing day, G Chokkalingam, managing director, Equinomics Research and Advisory, said, “Equitas is cheaper in terms of price-to-book value and PE multiple to SKS Microfinance. However, considering the fact that in terms of size, it is smaller than SKS Microfinance and given such a steep gain in the short-term, we suggest booking profits at the current price of around Rs 140.”

The stock listed on BSE and NSE with gains of over 30 per cent on debut against the issue price. The scrip listed at Rs 144 on BSE, up 30.90 per cent, against the issue price of Rs 110. On the National Stock Exchange (NSE), shares of the company debuted at Rs 145.10, up 31.91 per cent, against the issue price.

Vivek Mahajan, head, fundamental research, Aditya Birla Money, said, “Those who got shares in the IPO can hold it for long term gains. However, those who did not receive shares can wait for some dips and can buy at Rs 125-130 levels.”

Equitas is a leading player in microfinance segment with approx 5.5 per cent market share. It also operates in pre-owned vehicle, MSE and affordable housing segments. Converting a Small Finance Banks (SFB), which give the company access to low-cost funds coupled with wider cross-selling opportunities.

The company has three wholly-owned subsidiaries Equitas Micro Finance (EMFL), Equitas Finance (EFL) and Equitas Housing Finance (EHFL).

The IPO, which opened from April 5-7, was subscribed over 17 times at a price band of Rs 109-110 per share.

Funds raised from the issue will be used to develop IT infrastructure for the new bank and lending purposes, among others.

The share price of Equitas closed at Rs 135.5 on BSE and at Rs 135.70 on NSE on Thursday.

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