LatentView Analytics listing: Should you invest in shares post bumper debut?

New investors should wait for some correction before lapping up LatentView Analytics shares that witnessed a bumper debut on bourses on Tuesday. Shares of the company got listed at Rs 530 on the BSE, a premium of 169 per cent against the issue price of Rs 197. The scrip was listed at Rs 512 on the NSE.

Earlier, the public offer, which was opened for subscription on November 10, was subscribed a whopping 326.49 times on the final day of subscription on November 12. The Rs 600 crore-IPO received bids for 572.18 crore shares against 1.75 crore shares on offer.
 
Going ahead, Parth Nyati, Founder, Tradingo said, “Investors who got the allotment can put a stop loss of Rs 450 and hold the stock with a long-term view, while the new investors should look for a dip to buy the stock.”
 
Latent View was incorporated on January 3, 2006. It is among the leading pure-play data analytics services companies in India, based on its expertise of the entire value chain of data analytics from data and analytics consulting to business analytics and insights, advanced predictive analytics, data engineering and digital solutions.
 
Therefore, it is the first of its kind to get listed in the Indian stock market with no apple to apple peers. So, market watchers believe that it has a first-mover advantage, which is backed by strong management and fundamentals with increasing margins.
 
“There is a risk of revenue concentration and the revenue growth has been muted in the last three years. However, the industry is expected to grow at a CAGR of 15-20 per cent for the next 3 years which will aid the company's revenue,” said Nyati.
 
The company has a strong client base from Fortune 500 but there is concentration risk because 55 per cent of its revenue comes from the top 5 clients.
 
Santosh Meena, Head of Research, Swastika Investmart said, “The overall outlook is bullish but the valuations look expensive after a strong listing. Long-term investors should hold this company into their portfolio.”
 
Binod Modi, Head Strategy, Reliance Securities said valuations appear to be stretched now and therefore a limited gain can be expected hereon in the near to medium term for LatentView Analytics.
 
“Given niche presence of LatentView in digital analytics and consulting with a proven track record of profitable growth, there was a strong appetite among investors about the IPO. Notably, the investment in digital technologies is expected to double from 2020 levels to around $2.4 trillion in 2024 (around 16.5% CAGR). This presents an immense opportunity for LatentView, which may aid it to sustain double-digit growth in subsequent years,” Modi added.

Also read: Latent View Analytics makes stellar market debut, stock lists at 169% premium to issue price

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