Happy Forgings, Credo Brands & RBZ Jewellers: What should investors do after dull listings?

Happy Forgings Ltd, Credo Brands Marketing Ltd (Mufti Menswear) and RBZ Jewellers Ltd made a dull debut at Dalal Street on Wednesday but saw some follow up buying as the session progressed. The listing was lesser-than-expected but follow-up buying gave allottees some hope. Here's what analysts suggest investors to with these counters:

Happy Forgings
Shares of Happy Forgings were listed at bourses at a premium of 18 per cent around Rs 1,000 and the stock saw some additional buying, which took the stock close to R 1,050 and overall gains over the issue price of Rs 850 to 23.5 per cent during the day. However, the stock remained in the range of Rs 1,000-1,050.

Parth Shah, Research Analyst, StoxBox believes that the positive listing narrowed primarily due to the holiday mood going on. However, the company’s consistent performance and growth which can be seen in the revenue and EBITDA growth over the past three years, makes the company fundamentally strong.

"With the global forging and Indian crankshaft markets expected to grow at a CAGR of 5.2 per cent and 8.3 per cent, respectively, we believe that the company’s increasing focus on producing market-accretive value-added products provides an opportunistic environment for the company," he added while suggesting investors to book profit at current levels.

Happy Forgings, the esteemed manufacturer of complex machinery components, made a debut on the stock market that landed slightly below pre-listing expectations. Nevertheless, the company secured commendable listing gains, said Shivani Nyati, Head of Wealth, Swastika Investmart.

"The lower-than-expected listing raises concerns, but the decent gain and strong fundamentals offer a counterpoint. Given the uncertainty surrounding the listing, a cautious approach is recommended. Existing investors in the IPO may consider holding their shares with a stop loss at 900. However, investors who were looking for listing gains may exit their positions," she said.

Also Read: Happy Forgings shares list at 18% premium on Dalal Street over issue price

Credo Brands Marketing
The parent company of Mufti Menswear Credo Brands Marketing was listed on a flat note, just a premium of 1 per cent over the issue price of Rs 280. However, after an initial fall of 6 per cent to Rs 262.05 on BSE, the stock rebounded 23.23 per cent to Rs 322.95, taking the listing gains to 15.33 per cent over the given issue price.

Credo Brands made a lukewarm debut on the stock markets. This lackluster performance falls short of pre-listing expectations. Despite the disappointing listing, Credo Brands still possesses its core strengths, including a strong brand, a wide distribution network, and consistent financial performance, said Nyati from Swastika.

"However, the flat debut highlights the potential risks associated with the highly competitive market, seasonality, and current market sentiment. Given the uncertain outlook, a cautious approach is warranted, and investors may consider exiting their holdings, but long-term investors with high-risk capacity may hold their position by keeping stop loss," she said.

"Credo Brands listed flat on the bourses today. We believe the lacklustre listing was primarily due to the holiday mood in the market. However, Credo’s distinctive blend of strengths that include a strong brand equity spanning a diverse product range which safeguards it against business model risks is a positive for the company," said Dhruv Mudaraddi, Research Analyst, StoxBox

The brand's unwavering presence as a trendsetter in men's fashion and strong in-house design competencies establish formidable entry barriers. Financially, Mufti has reported an impressive CAGR of around 42 per cent between FY21 and FY23, he said, advising investors to book profits and subsequently consider investing in the company after evaluating its latest earnings.

Also Read: Credo Brands shares disappoint on D-St debut, list at 1% premium

RBZ Jewellers
The Ahmedabad-based RBZ Jewellers made its debut at par, at the issue price of Rs 100. However, the stock was locked in the upper circuit limit of 5 per cent at Rs 104.99 as the stock was listed in 'T' category or trade-to-trade segment. There were not many expectations over the counter in the grey market as well.

RBZ Jewellers listed flat on the bourses. A unique business model proposition and complete control over the entire value chain led to positive listing. The company also has a track record of sustained consolidated revenue from operations, growing at a CAGR of 49.7 per cent during FY21-23, said Prathamesh Masdekar, Research Analyst at StoxBox.

"The company’s diverse jewellery collections comprising different manufacturing techniques and varieties, a strong brand presence in the Indian jewellery industry, and a broad reach and presence across India have helped it to grow its business successfully. We remain optimistic on the issue and recommend investors who have received allotment to book profits," he said.

RBZ Jewellers' stock market debut mirrored pre-listing whispers, landing flat listing with zero listing gain over its issue price. This lackluster listing, in line with the subdued grey market trend, reflects cautious investor sentiment toward the company despite its apparent strengths, said Swastika's Nyati.

"While RBZ Jewellers possesses strong fundamentals and a fair valuation on the surface, the significant risks cannot be overlooked. The flat listing serves as a stark reminder of the potential pitfalls associated with gold price volatility, client concentration, informal artisan arrangements, and intense competition. Thus, investors are suggested to exit their positions," he said.

Also Read: RBZ Jewellers fails to woo at debut; stock lists at par with issue price of Rs 100

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