Signature Global shares erase most listing gains; time to book profit?

Shares of Signature Global (India) wiped out a major chunk of gains after a strong debut at Dalal Street on Wednesday. The stock, which delivered a double-digit listing pop, edged up slightly during its maiden trading session, before turning range-bound in the second half.

Shares of Signature Global (India) were listed at the bourses at Rs 445, with a premium of 16 per cent, compared to its issue price of Rs 385 per share on the BSE. The Delhi-NCR based real estate firm debuted at a premium of 15 per cent at Rs 444 on National Stock Exchange (NSE).

However, the stock edged up marginally, roughly about 2 per cent to Rs 453.80 as the session progressed, extending the overall gains to 18 per cent above the given issue price. However, the stock was hovering around Rs 450-levels as of 1.35 pm on Wednesday. Analysts suggest investors to book profits in the company and look for better investment options.

Signature Global IPO listed on the BSE and NSE at a premium of about 15-16 per cent over its issue price. The listing was in line with expectations, given the good response that the IPO received, said Shivani Nyati, Head of Wealth at Swastika Investmart.

"Signature Global is a leading real estate developer in Delhi-NCR, but it has a history of losses and faces concentration risk and stiff competition from other developers. After this listing, investors should consider booking profit; however, those who want to hold it should maintain a stop loss at 400," she added.
 

Signature Global raised Rs 730 crore from its initial stake sale. The company sold its shares in the range of Rs 366-385 apiece and investors could make a bid for a minimum of 38 equity shares. The issue could be bid between September 20-22. The issue of Signature Global was overall subscribed 12.50 times.

Signature Global depends significantly on its residential development business, particularly in the affordable housing category and its inability to complete ongoing and forthcoming projects by the expected completion dates and other labour problems could adversely affect the business, said Shreyansh Shah, Research Analyst, StoxBox.

Though the company has a good market share in its focused regions, its continued losses in the last three financial years raise red flags, he said. "We, therefore, reiterate our cautious stance on the issue and recommend investors who have received allotment to sell their shares and consider other avenues for investment."
 

Signature Global is among the largest real estate players in the Delhi-NCR region, catering cities like Ghaziabad, Gurugram and Karnal, mostly in affordable and lower mid-segment housing. It has sold 27,965 residential and commercial units. The company earlier intended to raise Rs 1,000 crore via IPO.

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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