Supriya Lifescience shares correct 6% post strong listing; what should investors do with this counter now?

The shares of Supriya Lifescience declined nearly 6 per cent to Rs 385 per share against its listing price on the BSE on Tuesday. Supriya Lifescience made a stellar debut at the stock market by listing at a premium of 55.11%. 

The shares were listed at Rs 425, a gain of Rs 151 apiece, against its issue price of Rs 274 on the BSE on Tuesday. Shares of active pharmaceutical ingredients supplier opened at Rs 421, a gain of Rs 147 or 53.65%, on the NSE on Tuesday. The listing was in line with the street's expectations as a majority of analysts have predicted similar outcomes for Supriya Lifescience debut.  

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At around 11.30 am, Supriya Lifescience shares declined 4.35% or Rs 32.50 on its listing price to Rs 406.50. This, however, was still a gain of 48.36% on the issue price.  

As the IPO has fetched a handsome return for its subscribers and the shares have seen some correction on listing price, what should investors do with Supriya Lifescience shares now?  

Long-term investors hold the stock: Santosh Meena, Head of Research, Swastika Investmart Ltd

Speaking about the listing, Santosh Meena said the API and specialty chemical industry have been darling for investors in the last 3-5 years.  

"We believe that this trend will continue for several years. As a result of the decent participation from investors, the IPO debuted at a premium of 53% on the NSE. In the long run, investors should hold the stock, while those who applied for listing gains can keep a stop loss of Rs 380 on a closing basis," said Santosh Meena.

The analyst suggested that new investors can look for buying opportunities on dips.

Hold shares with a stop loss of Rs 375 and keep trailing: Anil Singhvi

Zee Business Managing Editor recommended that investors should hold the shares with a stop loss of Rs 375 and keep trailing. He had earlier said that shares of Supriya Lifescience are expected to list in the range of Rs 400-450 against the issue price of Rs 274.

Well placed to tap the opportunity in the pharma API market: Sneha Poddar

Sneha Poddar, AVP Retail Research, Motilal Oswal Financial Services, said, " We like Supriya for its niche product portfolio, backward integrated business model and robust financials. It is well placed to tap the opportunity in the pharma API market given its strong pipeline focused on further diversification.”

She said the company offers a niche product portfolio of 38 APIs with a focus primarily on diverse therapeutic areas. It has consistently been India’s largest exporter of certain niche products with a well-balanced presence between regulated and semi/non-regulated markets, she added.  

The manufacturers and suppliers of active pharmaceutical ingredients (APIs), Supriya Lifescience, plans to use the proceeds from the fresh issue for funding capital expenditure requirements, repaying debt and general corporate purposes.

(Disclaimer: The views/suggestions/advices expressed here in this article is solely by investment experts. Zee Business suggests its readers to consult with their investment advisers before making any financial decision.)