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Tara Jewels makes dull debut on bourses

If Tara shares' slide continues, PC Jewellers IPO could be impacted

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, the first company to list since July, made a tepid debut on the stock exchanges on Thursday, with the stock ending at marginal discount to its issue price after opening at a premium. Brokers said investors booked profits on the listing day as they were not sure whether the premium would sustain in the coming days.

Shares of Tara Jewels, which raised almost Rs 180 crore through the initial public offerings (IPOs), closed at Rs 229.95 versus the issue price of Rs 230. However, when compared to the so-called ‘equilibrium price' of Rs 242, which is derived through a one hour pre-open call auction window, the shares fell a maximum permissible limit of 5%.

Analysts said Tara’s dull listing does not send the right signals to retail investors, who are preparing to invest in the upcoming three IPOs including Bharti Infratel and Care and PC Jewellers, which will raise a total of Rs 5,500 crore. But, they do not expect investor interest in these IPOs to be affected just because of Tara’s lackluster debut.

“This will make retail investors cautious when it comes to investing in IPOs,” said  Arun Kejriwal, director, Kejriwal Research and Investment Services. “Investors will watch the performance of this stock over the next few days before the put in an application for the forthcoming IPOs.”

Kejriwal said if Tara shares weaken further, it would be significantly negative for the upcoming PC Jeweller IPO.

Market players said that there could be downward pressure on the stock in coming days as the shares were thinly traded today as the shares got locked in lower circuit. The combined trading volume today was 910,000 shares compared to issue size of 6.8 million shares.

Independent analyst SP Tulsian said one should not read much into a single-day movement and the real value of the stock will start reflecting once the stock moves out of trade-to-trade segment.

“IPOs tend to come under selling pressure on initial days as impulsive investors look to exit the stock with some listing gains. Value investors start buying into such stocks once they come to free floor,” he said.

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