Gandhar Oil shares double investor wealth in maiden session; time to book profit?

Shares of Gandhar Oil Refinery saw a solid buying interest even after a robust Dalal Street debut, which extended its gains turning it into a multibagger on listing. The stock more than doubled investors' wealth during its maiden trading session and attracted investors across all the categories.

Shares of Gandhar Oil Refinery Ltd were listed at Rs Rs 298, a premium of 76 per cent, over its issue price Rs 169 on the National Stock Exchange (NSE). The lube maker was listed at a premium of 75 per cent at Rs 295.40 against the same issue price on BSE.

Following the listing, shares of Gandhar Oil Refinery extended its gains and surged another 17 per cent to Rs 344.60 on its maiden trading session, taking the overall gains to 104 per cent over its issue price. However, the stock hovered in the tight range of Rs 295-305 for most of the session.

Market participants remain divided on the stock as some consider to hold the counter for a long-term considering its strong market share, niche business and long-relations with clients. However, a few experts suggest book profits considering better than expected listing gains.

Narendra Solanki, Head - Fundamental Research, Anand Rathi Shares and Stock Brokers suggested investors to 'hold' the issue as a long term view as per their risk appetite. "Gandhar Oil Refinery India Ltd Limited is leading market share of the Indian white oils market with significant overseas sales, focused on the consumer and healthcare end-industries," he said.

Prathamesh Masdekar, Research Analyst at StoxBox remains optimistic on the issue and recommends investors who have received allotment to hold shares from a long-term perspective. "It is well positioned compared to speciality oil players due to its large exposure to the high-growth white oil market, focus on the high-margin consumer and healthcare end-user segments," he said.

Gandhar Oil Refinery (India) sold its primary offering in the fixed price range of Rs 160-169 apiece with a lot size of 88 equity shares. The issue was open for bidding between November 22 and November 24 to raise about Rs 501 crore, which included a fresh share sale of Rs 302 crore and an offer-for-sale (OFS) of up to 1,78,69,822 equity shares.

The issue was overall subscribed a strong 64.07 times during the bidding process. The portion for qualified institutional bidders was subscribed a whopping 129 times, while the portion reserved for non-institutional investors saw 62.33 times bidding. The allocation reserved for retail investors booked 28.95 times during the three-day bidding process.

Gandhar Oil Refinery India made  a strong stock market debut as the issue was subscribed 64.05 times, which is significantly higher than the expected, said Shivani Nyati, Head of Wealth at Swastika Investmart. Overall, the listing of Gandhar Oil Refinery India Limited was a success, she said.

"The company's strong fundamentals, robust demand for the IPO, and strong listing price suggest that the company is well-positioned for growth in the future. However investors may consider to book profit in it once," Nyati added.

Gandhar Oil is a manufacturer of white oils that caters to the consumer and healthcare end-industries. The company offers an extensive range of over 350 products that primarily fall under three categories - personal care, healthcare and performance oils (PHPO), lubricants, and process and insulating oils (PIO) - under the brand name 'Divyol'.

As expected, a solid listing gains above our expectation for a leading manufacturer of white oils, Gandhar Oil mainly on the back of reasonable IPO valuation when compared to its peers which were trading high, said Rajan Shinde, Research Analyst at Mehta Equities

"Post listing, we believe the valuation gap has narrowed to Gandhar peers and hence expecting limited upside from the current levels, hence we had recommended allotted investors to book listing day profits which is over and above our expectations.," he added.
 

Disclaimer: Business Today provides stock market news for informational purposes only and should not be construed as investment advice. Readers are encouraged to consult with a qualified financial advisor before making any investment decisions.

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