Pyramid Technoplast IPO: Stock ends in lower circuit on listing day. What should investors do?
IPO.
The stock listed at a mild premium of 13% over the issue price. However, it came under selling pressure post the listing and was locked in a 5% lower circuit.
On day one, the shares closed just 5.8% higher than the IPO price of Rs 166.
Pyramid Technoplast is an industrial packaging company engaged in the business of manufacturing polymer-based molded products (polymer drums) mainly used by chemical, agrochemical, specialty chemical, and pharmaceutical companies for their packaging requirements.
The company has a strong brand presence and a wide customer base, and it is also expanding its operations.
It has strategic locations for its manufacturing units.
Analysts say investors may choose to hold the stock for the long term or exit depending on the risk appetite.
There are some risks to the company's business such as competition from new entrants, fluctuations in the price of raw materials, and changes in government policies.
«The company has experienced negative cash flow in the past. Nevertheless, the IPO is fairly priced at a P/E of around 16.24x.
