Heranba Industries listing day strategy: Strong grey market premium; book profits or hold for long-term?

Agrichemicals manufacturer Heranba Industries is scheduled to list on stock exchanges on March 5, 2021.

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Volatility soared higher during the day but on closing had pared some gains.

Agrichemicals manufacturer Heranba Industries is scheduled to list on stock exchanges on March 5, 2021. The Rs 625-crore IPO was subscribed 83.29 times during the three-day bidding process. The issue was sold in the range of Rs 626-627 per share. In the grey market on Thursday, Heranba Industries shares were seen quoting a premium of Rs 230 over the IPO price. Heranba Industries shares were trading at Rs 857 apiece, implying a grey market premium of 37 per cent from its issue price. “Since the grey market premium reflects some amount of listing gains, one can expect more than 30 percent listing gains on March 5,” Likhita Chepa, senior research analyst at CapitalVia Global Research Limited, told Financial Express Online.

The over-subscription in the Heranba Industries issue was majorly led by qualified institutional buyers (QIBs) and retail investors also showed significant amounts of interest. The valuations of Heranba Industries’ issue were reasonable in comparison to its peers. Chepa added investors who have subscribed to the issue for listing gains can consider booking profits. Long term investors can consider holding it as it is one of the leading crop protection chemical manufacturers and a market leader in producing synthetic pyrethroids. “Increased food demand globally would increase opportunities for the crop protection players and Heranba is well placed to reap the benefits,” Chepa said. With its strong financial performance and in-house R&D team for product development and improvisation its prospects seem positive making it a long-term bet.

During IPO subscription, non-institutional investor category was the highest bidder, subscribing it by 271.2 times, followed by QIBs 67.5 times. Retail investor category subscribed their reserved portion 11.8 times. Aditya Kondawar, Founder and COO, JST Investments had given an avoid rating to this cCrop protection chemical manufacturer Heranba Industries IPO considering a few lapses. “We would suggest booking the profits if you have got the IPO allotment,” Kondawar told Financial Express Online.

Even though current market sentiment is bullish, AR Ramachandran, Co-founder & Trainer, Tips2Trades advised allotted investors to book part profits in Heranba Industries on listing gains as market volatility is here to stay. “A decent dip of at least 10-15 per cent should then be used for adding more of Heranba Industries in your portfolio,” Ramachandran added.

Abhay Doshi, Founder,, dealing in Pre-IPO & Unlisted Shares, told Financial Express Online that owing to the reasonable valuations and chemical sector being hot, Heranba Industries is expected to list at a significant premium. “I am expecting that shares may list in the range of Rs 840-860, implying a 35-40 per cent gain which is quite decent,” Doshi said. “In my personal opinion, I would choose to book profits on listing as strong options are available in this space with proven track records,” he further added.

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First published on: 04-03-2021 at 12:30 IST