Scoda Tubes Share Price Soars 5% After Flat Listing: Buy, Hold, or Sell?
Scoda Tubes Share Price Hits 5% Upper Circuit After Flat Listing
Scoda Tubes’ share price surged 5% to ₹146.95 apiece on the BSE, hitting the upper circuit limit, after a flat debut in the Indian stock market on June 4. The stock opened at ₹140 per share, in line with its issue price.
What Contributed to the Sudden Surge?
The stock initially declined to an intraday low of ₹136 apiece but gained momentum, jumping 4.96% from its listing price to reach the upper circuit. This volatility raised questions about the stock’s future performance.
Analysts’ Recommendations: Buy, Hold, or Sell?
Arun Kejriwal, Founder of Kejriwal Research and Investment Services, described the listing as ‘unusual.’ Despite strong oversubscription, the shares listed flat and then fell before hitting the upper circuit, indicating poor screen management.
Short-Term Profit Booking Advised
- Kejriwal suggests investors consider exiting and booking profits in the short term, as IPO proceeds are earmarked for capital expenditure, which will take at least 12 months to show results.
- He cautions that relying heavily on grey market premiums (GMPs) can be misleading.
Medium to Long-Term Approach Recommended
Mahesh M Ojha, AVP – Research and Business Development at Hensex Securities Pvt Ltd, advises a more patient approach. ‘Investors allotted shares during the IPO may consider holding Scoda Tubes for the medium to long term.’
Valuation and Future Outlook
Scoda Tubes is currently valued at a price-to-earnings (P/E) ratio of 30.43x and a price-to-book (P/B) ratio of 8.76x based on FY24 financials, broadly in line with industry peers.
Conclusion and Future Developments
As Scoda Tubes’ share price remains locked in its 5% upper price band, investors must weigh their options carefully. With the company’s capital expenditure plans and industry-appropriate valuations, the stock’s future performance will be closely watched.
