Shares of electronics manufacturing services and solutions provider Cyient DLM listed at a healthy premium of 52 percent at Rs 403 apiece on National Stock Exchange (NSE) in Monday's trade. Meanwhile, on the Bombay Stock Exchange (BSE) it debuted at a 51 percent premium or Rs 401, as against its issue price of Rs 265.
A day ahead of its listing, shares of Cyient DLM were on a roll in the unlisted market. The grey market premium (GMP) of Cyient DLM has risen following the stellar listing of the ideaForge Technology on Friday.
Last heard, shares of Cyient DLM were commanding a premium of Rs 150-155 per share in the grey market. Considering the upper price band of Rs 265, the company's shares were expected to list at a premium of 58 percent.
Analysts suggest investors to book profits if...
Analysts remain positive on Cyient DLM and expected the stock to deliver a strong listing pop on its maiden trading session. However, they believe that the gains would not be as stellar as ideaForge but investors would make a decent sum. Also, they suggested investors to book profits if listing gains is over and above 40 percent.
"We continue to advice allotted investors to book profits and if anyone wish to buy fresh should wait and watch for counter as markets may see some pressure to sustain at higher levels. The issue was reasonably priced when compared to its listed peers which are trading in the range of 35 times to 95 times such as Syrma SGS Technology, Kaynes Technology, DCX Systems and Avalon Technology, post listing it can match the peer’s valuations; hence upside from here would be limited," said Prashanth Tapse, Research Analyst and Senior VP - Research at Mehta Equities.
"However, we see few risk on lower margins and high dependency on few key clients as a concern," Tapse added.
"As expected, Cyient DLM made an outstanding entry in the secondary market at a listing price of Rs 403. The issue price of the IPO at the upper band was Rs 265; hence, it listed at a premium of 52 percent. Cyient DLM is a fundamentally strong company, has a strong track record of growth, and is well-positioned to benefit from the growing demand for digital manufacturing solutions. We will not recommend a fresh Buy at this level. However, existing investors can hold the shares for the long term with a stop loss at 362.7, as the company has good growth prospects," said Anubhuti Mishra, Equity Research Analyst at Swastika Investmart Ltd.
Astha Jain, Senior Research Analyst at Hem Securities, expected the company to list at 45 percent premium to the issue price.
Cyient DLM IPO subscribed 71.35 times
The Rs 592-crore initial public offering (IPO) of Cyient DLM was subscribed 71.35 times during June 27-30. Qualified institutional buyers were at the top among investors, buying 95.87 times the allotted quota, while the portions set aside for retail investors and high net-worth individuals were subscribed 52.17 times and 47.75 times, respectively.
The net proceeds from the issue will be used towards funding incremental working capital requirements, capital expenditure, repayment of debt, and other general corporate purposes.
Cyient DLM enjoys long-term relationships with marquee customers such as Honeywell, Thales Global Services, ABB, Bharat Electronics, and Molbio Diagnostics, having had an average relationship of over 11 years.
Axis Capital and JM Financial are the book-running lead managers to the issue, while KFin Technologies is the registrar.
First Published: Jul 10, 2023 9:53 AM IST
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