Cyient DLM shares: Should you profit after a strong listing pop or hold the stock?

Shares of Cyient DLM, which made a solid debut at Dalal Street on Monday, extended their gains during the maiden trading session before profit booking dragged the stock lower, almost close to its listing price during.

Shares of Cyient DLM were listed at Rs 403 on the National Stock Exchange (NSE) with a premium of 52 per cent against its issue price of Rs 265 apiece, while stock made its debut at a premium of 51 per cent at Rs 401 on the BSE. The stock delivered a handsome listing gain to the investors.

However, just after the strong listing, shares of Cyient DLM saw some buying interest as the stock rose about another 6 per cent to Rs 424.40 taking the overall gains exactly at 60 per cent over the given issue price. Though, it corrected around 4 per cent to Rs 408.80 on the back of profit booking but hovered around Rs 408-409 at 11.40 am.

The limited or range-bound trade in the counter after listing has led to confusion among the investors who boggled if they should book the profits and take money off the table or is more upside left in the stock. Also, those who did not get the allotment wondered if there was still room for entry in the counter.

Watch: Cyient DLM shares surge 54% to Rs 409 on NSE after bumper listing; should you book profits, hold or buy? Check share price target, stop loss, and more

Majority of the analysts continue to remain positive on the stock and suggest investors to hold the counter for longer-run citing its sound growth prospects. Also, a few of them suggest that fresh entry could be made on corrections, while short term investors may book partial profits they suggest.

Cyient DLM made an outstanding entry in the secondary market at a listing price of Rs 403, a premium of 52 per cent, which is on the expected lines, said Anubhuti Mishra, Equity Research Analyst at Swastika Investmart.

"Cyient DLM is a fundamentally strong company, has a strong track record of growth, and is well-positioned to benefit from the growing demand for digital manufacturing solutions. We will not recommend a fresh 'buy' at this level. However, existing investors can hold the shares for the long term with a stop loss at 362.7, as the company has good growth prospects," she adds.

The IPO debuted with an upside of 50 per cent on the listing day. We believe investors shall book at least 50 per cent of the profit at current levels, rest investment can be kept on hold for more than 18-24 months, said Mahesh M Ojha, AVP Research at Hensex Securities.

He said that strong numbers of subscription and strong promoter background lead to the strong listing pop for the counter. . The company sees great potential for growth as it can benefit from the growing digital businesses. Cyient DLM is a subsidiary of the software service company Cyient.

The IPO of electronic manufacturing services (EMS) company received a strong response from the investors and was overall subscribed 71.35 times. The issue was open for subscription between June 27-30 in the price range of Rs 250-265 per share. Cyient DLM remained stable in the grey market and was commanding a premium of Rs 125 per share.

The quota reserved for qualified institutional bidders (QIBs) was subscribed 95.87 times, while the portion for non-institutional bidders (NIIs) was booked 47.75 times. The allocation of retail investors was subscribed 52.17 times, while the portion for employees was booked only 2.60 times.

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Incorporated in 1993, Cyient DLM provides Electronic Manufacturing Services (EMS) as build to print (B2P) and build to specification (B2S) services including product design, and flexible manufacturing services tailored to meet their specific requirements.

From what we can see, the stock has delivered fantastic returns since its launch, said Vaibhav Kaushik, Research Analyst, GCL Broking. "Long-term investors can hold this stock with a stop loss at Rs 377. On the other side, new purchases can be made at Rs 390-levels with the same stop loss at Rs 377," he said.


(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Business Today)

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