GNG Electronics shares make bumper debut at 50% premium. Sell or hold?

India Today

6 days ago

GNG Electronics made a strong entry into the stock market on July 30, with its shares listing at Rs 355 apiece on the NSE. This is nearly 50% higher than the IPO price of Rs 237 per share, giving early investors a sizeable gain on debut.The listing price was even better than expected. GNG Electronics' unlisted shares were trading at around Rs 327 in the grey market before the listing, which suggested a 38% premium over the issue price. The final listing of Rs 355 comfortably beat those estimates.The Rs 460 crore IPO of GNG Electronics received a big response from investors during its three-day bidding window from July 23 to July 25. The allotment of shares was finalised on July 28.SHOULD YOU SELL OR HOLD?After the strong market debut, the big question for investors is whether to sell now or continue holding the stock.Shivani Nyati, Head of Wealth at Swastika Investmart Ltd, said, 'GNG Electronics Limited made a very strong debut on the stock market with a listing gain of approximately 50% over its issue price of Rs 237, getting listed at around Rs 352.'She added, 'The company has a significant presence across India, USA, Europe, Africa and UAE. It is the leading Indian provider of reconditioned IT equipment and offers associated services all over the world. It is the partner of choice for large IT hardware firms. The company marked steady growth in its top and bottom lines for the reported periods.'Nyati advised that investors should consider booking partial profits and keep the rest of their shares with a stop-loss of Rs 280. This means that if the price falls to Rs 280, investors should exit their position to protect their gains.advertisementPrashanth Tapse, Senior VP (Research), Mehta Equities Ltd said that post-listing valuations appear stretched, limiting immediate upside potential from current levels."In light of this, we believe conservative investors should consider booking profits and capitalising on the initial momentum. While Investors with a higher risk appetite or a long-term horizon may choose to HOLD," he added. According to NSE data, the IPO was subscribed 150.21 times in total. Retail investors subscribed their portion 47.36 times. The Qualified Institutional Buyers (QIB) segment saw the most interest, getting subscribed 266.21 times, while the Non-Institutional Investor (NII) segment was subscribed 226.44 times.The price band for the IPO was fixed at Rs 237 per share. For retail investors, the minimum lot size was 63 shares, costing Rs 14,175. For small NIIs, the minimum investment was 14 lots or 882 shares, amounting to Rs 2,09,034. For big NIIs, the minimum lot was 67 lots or 4,221 shares, requiring an investment of Rs 10,00,377.GNG Electronics is in the business of refurbishing laptops, desktops and other IT devices. It provides services not only in India but also in the USA, Europe, Africa and the UAE. The company has positioned itself as a key player in reconditioned IT equipment and offers a wide range of related services.GNG is also a preferred partner for many large IT hardware companies. It has shown steady growth in both revenue and profits in recent years, which helped boost confidence in its IPO.(Disclaimer: The views, opinions, recommendations, and suggestions expressed by experts/brokerages in this article are their own and do not reflect the views of the India Today Group. It is advisable to consult a qualified broker or financial advisor before making any actual investment or trading choices.)- Ends