Shriram Properties shares recover 7% after discounted listing; what should you do now? Experts devise strategy for investors

Stock of Shriram Properties Limited recovered nearly 7 per cent after listing at 20.34% discount to Rs 94 per share on the BSE on Monday against its issue price of Rs 118 per share. Shares declined by Rs 24 per share on its debut.  

At around 12.30, shares of Shriram Properties have shown some recovery as the shares were trading with nearly 7 per cent gain on its listing price to Rs 100.20, a gain of Rs 6.20, apiece on the BSE. The shares were still trading at discount of 15 per cent or Rs 17.80 below its issue price of Rs 118.

Market experts were of the view that the shares made a weak debut as the company has been incurring losses recently and weaker sentiments and FIIs selling too have impacted its listing somehow.

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Aggressive investors can hold: Santosh Meena, Head of Research, Swastika Investmart Ltd

Speaking about listing of shares of Shriram Properties, Santosh Meena, Head of Research, Swastika Investmart Ltd said the he IPO saw a muted demand on the back of losses where other real estate companies were booming in the last two years.

“In the coming years, real estate is likely to perform better, and only aggressive investors are advised to look at Shriram Properties, while others can opt for Sobha, Prestige, or Brigade. Aggressive investors can hold the stock for the long-term, while short-term investors should take a stop loss of Rs. 80 on a closing basis,”said Santosh Meena.

Not advisable to add this stock: Likhita Chepa, Senior Research Analyst at CapitalVia Global Research

Likhita Chepa, Senior Research Analyst at CapitalVia Global Research, opines that the South India based real estate player got listed at a discount due to ongoing weaker market sentiments despite the issue being fairly valued.

“Considering the volatility in the market, we do not advise investors to add this stock to their portfolio at current levels. We expect further correction of around 15 per cent in the coming sessions,” said the 

CapitalVia Global Research senior analyst.

With FED planning to increase the pace of bond purchases, we expect FII’s to pull out their money in the coming months due to which high beta sectors like infra and realty might witness some selling pressure, Likhita said.

“Short term investors are advised to avoid adding this stock to their portfolio , while long term investors can consider buying this stock at 75-80 levels,” said the analyst.

Issue may list below issue price: Anil Singhvi

Ahead of the listing today, Zee Business Managing Editor Anil Singhvi said the public offer is very likely to be listed on the bourses below its issue price of Rs 118 per share. He suggested short-term investors to keep a stoploss of Rs110.

Weak listing expected: Aayush Agrawal, senior analyst, Swastika Investmart Ltd
Earlier, Aayush Agrawal, senior analyst, Swastika Investmart Ltd, also said that that Sriram Properties may see a weak listing due to Covid affecting this sector.    
"Although the company has a strong brand name in South India, but during COVID, when real estate was booming, the company suffered losses," he said.  

Shares of Shriram Properties Limited was booked 4.6 times on the final day of subscription on December 10. The Chennai-based residential real estate development company had aimed to raise Rs 600 crore via the public issue.  

About the Company

The company had fixed a price band of Rs 113 – Rs 118 for this IPO. Total issue size of Rs 600 crore comprises Rs250 crores of fresh issue and an offer for sale of ₹350. The company has fixed the market lot of 125 shares. Minimum order quantity is one lot and the maximum subscription amount for retail investors is Rs 2 lakh, while for eligible employees it is Rs 5 lakh.