HDFC AMC share price zooms on listing day; did you miss IPO gains? Should you buy or stay away?

By: | Updated: August 6, 2018 2:42 PM

HDFC AMC share price continued to soar after a blockbuster listing this morning. Here's what you must do if you've missed the IPO.

HDFC AMC share price continued to soar after a blockbuster listing this morning. At NSE, HDFC AMC shares hit an intraday high of Rs 1,835 in the morning trade implying a premium of more than 65% as compared to the IPO price of Rs 1,100. Market experts are of the view that the gains may moderate going forward, given such a stellar listing. So what should investors do now? “HDFC AMC shares had a great listing on the exchanges. Those who have bought the shares only for listing gains may book profits and exit the stock. However, there are many long-term investors who wish to hold on to the shares. We had a subscribe on the stock,” Siddharth Sedani Vice President- Equity Advisory, Anand Rathi Shares and Stock Brokers told FE Online.

What about the investors who missed the issue? “Retail investors are advised to wait for price to come down from this high level. The 60%+ increase in the price has made the stock fully priced leaving no scope for earning returns,” Dara Kalyaniwala Vice President, Investment Banking PL Capital Markets told FE Online. According to Siddharth Sedani of Anand Rathi, once the over-exuberance moderates, and the dust settles in the next few days, investors may look for fresh buying opportunities. “After such a robust listing, it is advised not to do any fresh buying. However, investors who have got the allotment can continue to hold the shares,” he said, adding that the house doesn’t have any further update on the stock.

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According to the expert, investors realise that the other two stocks (HDFC Bank and HDFC) are also long term wealth creators. “We have had stellar listings in the past including Infosys, and D-Mart (Avenue Supermarts) more recently. So, investors can hold the shares for the long -term,” Sedani observed. Earlier, Astha Jain, Senior Research Analyst, Hem Securities had anticipated strong listing gains of 35-40%. Jain said that investors can look to book profits for half of the shares they own. “Book profit in minimum one fourth or maximum  half of shares and keep remaining half in portfolio for long term. We are expecting gain of 100 % above issue price in 1 year horizon,” Astha Jain told FE Online in a note.

“Returns are a function of what value you give to a company when you buy it. I think the investors should be more measured in what value they give to a company when they acquire it. Being generous at the time of acquisition implies that you should moderate your return expectations over time, and not expect others to be as generous as you are for extended periods of time. This is the simple rule of IPO investing. When the party is on, I would just like to sound a word of caution and not spoil the party,” Shyam Sekhar of i Thought told ET Now.

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