Valiant Laboratories’ shares made a strong debut on the stock exchanges, opening at a 15.82% premium over the IPO price. The shares started trading at Rs 162.15 on the NSE and Rs 161 on the BSE, compared to the IPO price of Rs 140. Investors who participated in the IPO and secured shares have seen a profit of Rs 22.15 per share, representing a nearly 16% return on the first day of listing.
However, the question arises: should investors hold onto their shares or book profits? The IPO received robust demand, with a subscription rate of 29.76 times, indicating strong investor interest. While the initial listing has been positive, investors should exercise caution and consider associated risks. These risks include the company’s reliance on a single product, dependence on a limited number of suppliers and customers, and competition within the industry.
Shivani Nyati, Head of Wealth at Swastika Investment, advises investors to book profits and exit their positions. For those interested in holding for the long term, she suggests placing a stop loss at Rs 150.
To recap, Valiant Laboratories’ IPO was open for public subscription from September 27, 2023, to October 3, 2023. The IPO price range was set at Rs 133-140 per equity share with a minimum lot size of 105 shares, requiring a minimum investment of Rs 14,700 for retail investors. The IPO witnessed strong demand, with the QIB category subscribed 20.83 times, non-institutional investors subscribing 73.64 times, and retail individual investors (RIIs) subscribing 16.06 times.
The company specializes in manufacturing Paracetamol, an Active Pharmaceutical Ingredient, and Bulk Drug, in various grades and sizes based on customer specifications. Valiant Laboratories has demonstrated consistent revenue growth, achieving a CAGR of 35.3% during FY21-23.
