Should you buy or hold Aptus Value Housing Finance post-tepid listing?

Analysts on Dalal Street are advising clients to stay put with Aptus Value Housing Finance shares after it made a tepid debut on bourses with its shares listing at over 6% discount compared with the issue price. On BSE, shares of the company opened at Rs 329.95 which was 6.52% below the issue price of Rs 353. On the NSE, the scrip got listed at Rs 333, a discount of 5.66% in comparison to the issue price. However, shares of the company traded at Rs 346.35 in the afternoon trade on the BSE.

“We have given a subscribe rating to Aptus Value Housing Finance IPO and listing was below expectations. However, investors who got allotment in the IPO are recommended to hold the stock for long term investment,” said Saurabh Joshi, research analyst, Marwadi Shares and Finance.

He further added that the discount at listing provides an opportunity to unallotted applicants to buy shares at discount and hold the same from a long-term perspective.

Factors

“We believe the company’s presence in large underpenetrated markets have strong growth potential and favourable valuation provides a great opportunity to long term investors to buy and hold the stock for long-term investment,” Joshi added.

Earlier, the initial public offer (IPO) of Aptus Value Housing Finance India received 17.20 times subscription. The Rs 2,780-crore IPO received bids for 94,82,42,442 shares against 5,51,28,500 shares on offer, according to exchanges data.

The net proceeds from the fresh issue will be utilised towards augmenting the company’s tier-1 capital requirements.

What should investors do?

Jyoti Roy, DVP-equity strategist, Angel Broking said, “We would recommend investors to hold on the positions. We believe that the company has got strong fundamentals and should do well once the volatility in the market subsides.”

Santosh Meena, Head of Research, Swastika Investmart said, “It was another day of weak listing as Aptus value housing and Chemplast Sanmar debuted the secondary market on a weak note because sentiments have become fragile in August month. I think such kind of period is healthy for the market because it has taken out froth from the primary market and the market has become light and rational for the news issues. If we talk about today’s listings then Aptus has strong financials with the comfort of valuations therefore long-term investors who have little aggressive view can add this stock into their portfolio while there are some concerns about the quality of Chemplast. Valuations are also stretched in the chemical sector therefore investors should stick with quality stocks in this space that have growth visibility.”