Senco Gold shares deliver solid listing gains. What should investors do now?

economictimes.indiatimes.com:

Senco Gold delivered healthy returns to investors as the company's shares got listed at a 36% premium on the exchanges earlier on Friday. The strong listing was in line with the expectations. The stock is currently trading 31% higher over the issue price at Rs 414.25 apiece on BSE.

Analysts advised investors to avoid any fresh buying at the current levels but said existing investors can hold the stock for the long term amid good growth prospects. «The stock is trading at a reasonably discounted ask valuation which is leaving something on the table for new investors when compared to its peers. However, we see few risks in the highly competitive, fragmented and regulated business,» said Prashanth Tapse of Mehta Equities.

«The company has been growing steadily in recent years and is well-positioned to benefit from the growing demand for gold jewellery in India. We are not recommending any fresh buying at this level. However, existing investors can hold the shares for the long term with a stop loss at Rs 387, as the company has good growth prospects,» said Anubhuti Mishra, Equity Research Analyst at Swastika Investmart.

The Rs 405 crore IPO was a combination of fresh issues and an offer for sale. The fresh equity issue was of Rs 270 crore, and the OFS segment aggregated up to Rs 135 crore. Of the fresh issue net proceeds, Rs 196 crore will be utilised for funding working capital and the residual for other general corporate purposes.

The issue was subscribed 73.34 times at the close, driven by heavy bidding from qualified institutional buyers on the last day. The part reserved for QIBs was subscribed 180 times. The retail portion of the issue was subscribed 15.45 times, while the non-institutional category was subscribed