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The initial public offering (IPO) of Shree Tirupati Balajee Agro Trading Co. Ltd. made a strong debut on the Indian stock market, exceeding expectations with a premium listing. The company's shares opened at ₹90 on the National Stock Exchange (NSE) and ₹92.90 on the Bombay Stock Exchange (BSE), representing a premium of around 8.5% over the IPO price. The positive reception from investors was evident in the subsequent trading, as the stock quickly climbed to an intraday high of ₹94.50 on the NSE and ₹97.54 on the BSE, touching the 5% upper circuit within minutes of its market debut.
Market experts have offered contrasting advice for investors based on their investment horizons. For those with short-term investment goals, they suggest taking profits and exiting, given the strong initial gains. The experts highlight the 'trade-to-trade' category listing of the stock, which restricts intraday trading for the next ten sessions. They believe that the stock is likely to continue trading at the upper circuit for the coming sessions, particularly on Friday. As a result, they advise investors to set a stop loss at ₹91 per share to maximize returns and minimize potential losses.
However, long-term investors are encouraged to hold onto their shares, considering the company's strong financial performance and growth prospects. Akriti Mehrotra, Research Analyst at Stoxbox, points to Shree Tirupati Balajee's position as a leading player in the flexible intermediate bulk container (FIBC) and industrial packaging market. Despite challenges like regulatory changes affecting plastic use and fluctuations in raw material supply, the company has demonstrated consistent financial growth, with a revenue CAGR of 10.2% and improved profitability. Mehrotra highlights the attractive valuation with a P/E ratio of 14.5x based on FY24 earnings, making the IPO a compelling proposition for long-term investors.