Stellar debut, book gains in MTAR Technologies, say experts after stock lists at 83% premium

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Share of Hyderabad-based MTAR Technologies opened for trading at Rs 1,050 on the National Stock Exchange, compared to the issue price of Rs 575, marking a premium of 82.61%. On the BSE, MTAR Technologies opened at Rs 1,063.90, at a premium of 85.03%.

MTAR share price soared after listing and made a high of Rs 1,154 on the BSE.  In afternoon trades it is quoting at Rs 1,081 on the BSE. This is almost 88% higher or Rs 506 above the issue price. So, the moot question now for investors should they stay invested or book profits.

Market expert Ambareesh Baliga is of the opinion that, “MTAR Technologies is not cheap stock even at IPO price and with the stock getting such a good premium on listing investors should book profits at this point. In the past most of the IPOs were expensive yet they listed at huge premiums as the market condition was good. Now since the secondary market is getting a bit weak, investors should utilize this stellar opportunity to book profits.”

“Investors should consider booking profit at these levels. The issue price of Rs.575 implies a post-issue P/E of 47.9x. Valuations will not remain supportive on listing at such a high premium. One should consider booking profit keeping in mind the higher valuations,” said Saurabh Joshi of Marwadi Shares and Finance.

Since the company is into very high precision engineering investors can stay invested in the company for the long term says Gaurang Shah, Senior Vice President at Geojit Financial Services. Investors looking for listing gains should book profits, Shah added.

MTAR Technologies (MTAR) is a leading precision engineering solutions company engaged in the manufacture of mission-critical precision components with close tolerances (5-10 microns), and in critical assemblies, to serve projects of high national importance, through their precision machining, assembly, testing, quality control, and specialized fabrication competencies, some of which have been indigenously developed and manufactured. The company primarily serve customers in the nuclear, space & defence, and clean energy sectors.

The Rs 597 crore-public issue received bids for 145.79 crore shares as against 72.60 lakh shares on offer, according to the stock exchange data. The issue was subscribed 200.79 times. The portion reserved for retail investors was subscribed 28.4 times, the qualified institutional buyers category was subscribed 165 times and the non-institutional category received 650.79 times subscription.

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