Kalyan Jewellers IPO listing day strategy: Grey market premium missing; sell on listing or hold shares?

Kalyan Jewellers India IPO will be listed on stock exchanges on Friday, March 26, 2021. The Rs 1,175-crore public issue received a muted response and was subscribed 2.61 times. The issue was sold in the price band of Rs 86-87 per share. In the grey market today, Kalyan Jewellers India shares were trading with Rs 4 discount over the IPO price. The shares were seen ruling at Rs 83 apiece, down nearly 5 per cent from the issue price. On successful listing on stock exchanges, Kalyan Jewellers India will join its industry listed peer Titan Company Ltd, which has a P/E of 84.23x.

Tanishq (Titan Company Limited) is the leader in the Indian Jewellery market with a 3.9 per cent share of the overall jewellery market and a 12.5 per cent share of the organized jewellery market, based on the financial year 2019. Out of six research and brokerage firms, four of them had recommended to ‘subscribe’ to the issue. Amid the current market scenario, a new listing might lose the premium, said an analyst. “Any gains above 30 per cent over the IPO price on the listing, look lucrative and one should cash in the gains. In the case of Kalyan Jeweller India too, investors should look to book profits on debut day,” Vishal Wagh, Head of Bonanza Portfolio Ltd, told Financial Express Online.

The grey market premium of this IPO was at par with the marginal discount. Likhita Chepa, Senior Research Analyst at CapitalVia Global Research told Financial Express Online that investors should limit their expectations with respect to listing gains as this IPO might disappoint investors who solely invested for listing gains. “With its key competitive strengths in its ability to operate as a hyperlocal jewelry company, one can hold this stock for short term in their portfolio,” Chepa added.

Kalyan Jewellers India issue received a dull subscription as the IPO came at very expensive valuations and the growth in the company remains to be tepid. Abhay Doshi, Founder, UnlistedArena.com, dealing in Pre-IPO & Unlisted Shares, told Financial Express Online that the recent listings have further dampened the sentiment of the primary market. “Hence, Kalyan Jewellers India IPO may get hammered on the listing. In my personal opinion, it is better to sell on the listing,” Doshi added.

(The recommendations in this story are by the respective research and brokerage firm. Financial Express Online does not bear any responsibility for their investment advice. Please consult your investment advisor before investing.)