The IREDA stock, which began the trading day at a 56% premium to the issue price at ₹50 a share, ultimately ended the day locked at the upper circuit – at ₹59.99 apiece.
That translates into an upside of 87.47% from the issue price. The ₹2,150-crore initial public offering (IPO) was sold to investors at a price band of ₹30-32 and had been subscribed 39 times, with the qualified institutional buyers’ portion oversubscribed 104 times.
The stock surge, which takes the financier’s valuations past the ₹16,000-crore mark, also points to immediate limited upside, although the extent of oversubscription and broader market trends might limit downside risks. The company is also set to receive an upgrade in its status from the government this week.
“The shares of IREDA after the listing day up move are now available at a price-to-book ratio of 2 times, against our expectations of 1.6x. This makes its valuation above our comfort levels,” said Veer Trivedi, analyst at Samco Securities. “The price may also be triggered since the company is likely to be upgraded this week to a Navratna from a Mini Ratna.”
However, since the renewable energy sector has long-term growth prospects, Rajnath Yadav, research analyst at Choice Broking, has suggested those not allotted shares buy on dips.
“We had a target price of 55-60% premium which has been achieved on listing day. We advise the investors who’ve been allotted shares to book profits and those who have not been allotted shares to buy them at dips,” said Yadav.