IndiaMART InterMESH Ltd made a stellar debut on stock exchanges on 4 July, closing at a 34% premium over its listing price. On the National Stock Exchange (NSE), the stock closed its first trading session at Rs 1,301.95 compared with its issue price of Rs 973, after hitting an intra-day high of Rs 1,338. The stock continued its upward trend on Friday, 5 July, rising as much as 3.5% in trade.
IndiaMART InterMESH is an online marketplace for business products and services. Its Rs 475-crore initial public offering (IPO) was subscribed 36.16 times during 24-26 June.
Analysts, who were bullish on the stock before its listing, have already achieved their targets. Now, some are advising to hold the stock due to its non-traditional business and expected growth after completion of capex, while others are worried because of its premium valuation. Here is what a few of them say about their future strategy after a strong listing:
Prashanth Tapse, AVP Research at Mehta Equities
Investors with a higher risk appetite may consider holding and wait for 3-6 months for more optimistic return on investment.
Tausif Khurshid Shaikh, Research Analyst at Way2Wealth Securities
We advise investors not to hurry their buying decision as the stock may see profit-booking from short-term investors. The company has recently turned profitable, and it is better to watch its performance for a few quarters to get a clear picture of its growth trajectory and financials.
Kuber Chauhan, Research Analyst at BP Wealth
We have given an avoid rating and one shouldn’t go for it. Looking at the business model, IndiaMart depends on the third party service providers for the major portion of its operations, which can have an adverse effect due to systemic and operational disruptions.
Therefore, we believe the future growth potentials are much more important than profitability. On valuations aspect, we feel IndiaMart is quite expensive.
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