Vishal Mega Mart's shares made an impressive debut on the stock market on Wednesday, December 18, opening at ₹104 on the NSE
Vishal Mega Mart shares had a stellar debut on the stock market on Wednesday, opening at a price that was 33.33% higher than the issue price on NSE. The stock commenced trading at ₹104 on NSE and ₹110 on BSE, marking a premium of 41%.
Continuing its surge, the stock gained an additional 7% from its listing price, reaching ₹111.19 on NSE. At 2:30 p.m., the stock was trading at ₹109.
The IPO, which was entirely an offer-for-sale by promoters, saw a massive investor response, being oversubscribed by 28 times, especially in the QIB segment. The IPO received bids amounting to over ₹1.61 lakh crore, against the issue size of ₹8,000 crore.
While the stock's strong debut has grabbed investors' attention, analysts are divided on its future prospects. Some advise against expecting further gains due to the IPO's OFS structure, where the company will not directly benefit from the funds raised. However, others remain optimistic about the company's growth and cost-efficiency initiatives.
Highlighting the high demand, which led to the stock's strong debut, Shivani Nyati, Head of Wealth at Swastika, attributed the strong listing gains to the high investor demand, evident from the 28.75 times oversubscription. Pointing out Vishal Mega Mart's position as a leading offline retailer, its consistent financial performance, and its reasonable valuation drove investor interest. However, she advised investors to book profits at this level, suggesting a stop-loss around ₹95 for those intending to hold the stock long-term.
Prashanth Tapse, Senior Vice President of Research at Mehta Equities, shared a similar view, recommending that conservative investors consider booking profits due to current market volatility. However, for long-term, risk-tolerant investors, he advised holding onto the stock with a long-term view, especially if the stock dips in the short term.
Emphasizing the company's strong growth prospects, Akriti Mehrotra, Research Analyst at StoxBox, highlighted the company's focus on expanding into underserved Tier-2 and Tier-3 cities. Vishal Mega Mart's strategy of diversifying its product offerings and enhancing in-store experiences is driving same-store sales growth, making it an attractive option for long-term investors. She recommended holding onto shares from a medium-to-long-term perspective.
