RITES shares up 20% in just 2 days; can still rally more; to buy or not? Find out

RITES share price extended gains for the second straight session post its debut on stock market on Monday. The stock had surged 15 per cent over its issue price of Rs 185 in its debut trade yesterday, and rallied another 4 per cent today, taking the overall gains to 19.94 per cent so far on the BSE. 

Shares of railways consultancy firm hit its intraday high of Rs 221.90, up 4.32 per cent on the BSE today.

Avinnash Gorakssakar, HoR, Joindre Capital still sees an upside of over 15 per cent from the current levels in the next three to six months. 

"I see target of Rs 220-225 in the near-term. The stock has a potential to undergo a rerating after the company announces its quarterly numbers and management defines its commentary on future growth. The company is debt free whose return ratios are positive too. Thus, investors can still see 15 per cent upside if they buy at current levels," he said. 

The Rs 466-crore IPO of RITES was open during June 20-22 and was in a price band of Rs 180-185.

RITES garnered strong investor demand, with the issue getting subscribed more than 67 times. Qualified Institutional Buyers (QIBs) portion was subscribed 71.97 times, non-institutional investors 193.04 times and retail 15.17 times.

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RITES is the first state-owned firm to hit the IPO market in the current financial year.

Elara Capital (India), IDBI Capital Markets & Securities, IDFC Bank and SBI Capital Markets managed the issue.