CAMS, the largest initial public offering of fiscal year 21, also had a respectable 23 percent listing rate, leaving investors wondering if more money can be made from stocks.
Analysts said that short-term investors in the two rookies can exit completely or at least exit partially. At the same time, they said that CAMS still has a lot to offer long-term investors.
Chemcon Specialty Chemicals traded at a 115 percent premium at Rs 731. It was later traded 83 percent above the issue price at Rs 623. CAMS traded 18 percent higher at Rs 1,456 after trading at a 23 percent premium.
“Short-term investors are advised to withdraw from Chemcon and CAMS as they are currently trading online or at a premium against their peers,” said Rajnath Yadav, research analyst at Choice Broking.
Astha Jain Hem Securities advises investors to remove three-quarters of Chemcon’s listings and 50% in the case of CAMS from the table.
Jain estimates CAMS profit for fiscal year 21 at Rs 189 crore, with EPS of Rs 39. With those numbers, the stock is currently at Rs 1,456 with a P / E multiple of 38 times for the fiscal year. 21. Our estimates for fiscal year 21 give us a valuation of Rs 1,550 at 40 P / E for CAMS. For Chemcon, our estimate of post-issuance EPS for fiscal year 21 is Rs 17. At that time, we have a fair value of Rs 650. Both stocks are trading below these intraday levels and therefore have upside potential. But a profit reserve is essential, ”he said.
Chemcon has included similar companies such as Aarti Industries, Vinati Organics, Atul, Paushak, Neogen Chemicals, Fine Organics Industries, and Sudarshan Chemicals.
The company is the only manufacturer of HMDS (hexamethyldisilazane) in India and the third largest manufacturer in the world. Furthermore, it was the only zinc bromide manufacturer and the largest calcium bromide manufacturer in India as of 2019 volume.
CAMS, on the other hand, is the largest mutual fund registrar and transfer agent in India today, with an aggregate market share of 70 percent based on average assets under mutual fund management (AAUM). The company’s clients included four of the five largest fund houses and also nine of the 15 largest AAUM-based mutual funds during July 2020. CAMS does not have a pair listed in India. It can only be compared with the unlisted Sundaram BNP Paribas and more closely with Karvy.
Angel Broking’s Jaikishan Parmar, who had previously recommended a buy on CAMS IPO, said that at the intraday level of Rs 1,420, the stock is trading at 40 times fiscal 2020 earnings.
“I wouldn’t call it underrated. If an investor has a five-year long-term vision, this is a stock to stick with. CAMS is an industry leader with a 70% market share. It manages four of the top five MFs in terms of assets. These are the fund houses that have high market shares and are growing the fastest. As MF’s penetration in India is still well below global standards and the fact that the company has minimum working capital requirements to continue its activity, the shares look attractive: he said.
Parmar said potential new investors can buy the shares at current levels, if they have the ability to hold for the next five years.
Happiest Minds stock traded at Rs 348 on Thursday, holding almost all of its trading gains two weeks after debut.
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