New Listing: Archean Chemical shares climb 12.5% on debut trade – what should investors do? check analysts view

Shares of Archean Chemical Industries Ltd ended with 12.5 per cent premium in its debut trade on Monday against the issue price of Rs 407. The company commanded a market valuation of Rs 5,635.21 crore on the BSE.

The stock made its debut at Rs 449, higher by 10.31 per cent on the BSE. During the day, it jumped 16.96 per cent to Rs 476.05. Shares of the firm ended at Rs 457.95 apiece, a jump of 12.51 per cent.

On the NSE, shares of the firm listed at Rs 450, reflecting a premium of 10.56 per cent. It ended at Rs 458 per share, rallying 12.53 per cent. In volume terms, 11.19 lakh shares of the firm were traded on the BSE and over 2.21 crore shares on the NSE during the day.

Zee Business Managing Editor Anil Singhvi in his recommendations said that the short-term investors should keep a stop loss of Rs 480 and book a profit if it lists below Rs 480.

The company’s strong listing can be attributed to strong interest from investors, Pravesh Gour, Senior Technical Analyst, Swastika Investmart Ltd said in its comment. He added that the issue was priced at a P/E of 22.82 based on annualised financial year 2021-22 (FY22) numbers.

The market expert said that the company deserves this premium multiple due to its phenomenal growth prospects. Nevertheless, the high debt-to-equity ratio, high product, key customer concentration, and restructuring of loans during FY 17–18 make us averse to the issue.

Therefore, we advise investors to lock in listing gains and those who applied for listing gains can keep a stop loss of Rs. 433 in place, Gour said in its recommendation.

The Initial Public Offering (IPO) of Archean Chemical Industries was subscribed 32.23 times earlier this month. It had a fresh issue of equity shares aggregating up to Rs 805 crore and an Offer For Sale (OFS) of up to 1.61 crore shares by the promoter and investors, at range of Rs 386-407 per share.