 "Bajaj Housing, Waaree Energies, Mobikwik among 18 IPOs trading at new lows")
Bajaj Housing Finance, Waaree Energies, One Mobikwik Systems, DAM Capital Advisors, P N Gadgil Jewellers, Transrail Lighting and Unimech Aerospace & Manufacturing were among 18 recently listed stocks that were trading their respective lows since listing amid a sharp correction in equities.
ACME Solar Holdings, Carraro India, Inventurus Knowledge Solutions, Indo Farm Equipment, Krystal Integrated Services, Northern Arc Capital, Stanley Lifestyles, Suraksha Diagnostic and Unicommerce Esolutions were the others from the BSE IPO index to hit respective new lows on Friday. These stocks were down up to 5 per cent on the BSE.
At 01:15 PM; the BSE IPO index was down 1.4 per cent, as compared to 0.04 per cent rise in the BSE Sensex. Thus far in the month of January 2025, the IPO index has tanked 11 per cent, as against 2.6 per cent decline in the benchmark index. The BSE IPO index had hit a record high of 17,281 on September 24, 2024, and quotes around 14,650 levels.
Among individual stocks, DAM Capital Advisors hit a new low of Rs 278, down 2 per cent in intra-day trade, thus falling below its issue price of Rs 283 per share. The market price of this stock broking & allied services company has declined 39 per cent from its post listing high of Rs 456.90, touched on debut day i.e. December 27, 2024.
The company is schedule to announce the December quarter (Q3FY25) results today i.e., January 24.
DAM Capital is one of the leading merchant banks in India providing a wide range of financial solutions particularly in the areas of merchant banking (equity capital markets, mergers & acquisitions, private equity, structure financial advisory) and institutional equities (broking and research). The company has demonstrated a consistent improvement in market share, growing from 8.2 per cent in FY21 to 12.1 per cent in FY24 in terms of initial public offering (IPO) and qualified institutional placement (QIP) issuances.
The merchant banking and equity business is highly sensitive to economic downturns, interest rate hikes, and geopolitical tensions, which could reduce transaction volumes and investor confidence. Slow growth in major economies (e.g., the US, China, Eurozone) can affect export-driven businesses, impacting demand for advisory services, KRChoksey Shares and Securities said in the IPO note.
Shares of Waaree Energies hit a new low of Rs 2,266, down 3 per cent, declining 15 per cent in three days. The stock of solar equipment company has corrected 39 per cent from its post listing high of Rs 3,740.75 touched on November 6, 2024. However, currently, the stock still trades 51 per cent higher over its issue price of Rs 1,503. The company made its market debut on October 8, 2024.
Waaree Energies specialises in the manufacturing of solar modules and providing end-to-end solutions for solar power generation. The company offers a wide range of solar solutions, including photovoltaic (PV) modules, solar power plants, and energy storage systems, catering to residential, commercial, and industrial sectors.
Analysts at Kotak Securities reckon that Indian solar companies are well-positioned for strong growth in domestic and US markets, aided by trade and non-trade barriers. Over the medium term, integrated Indian manufacturers and companies with local US manufacturing presence would continue to enjoy a competitive advantage over peers, resulting in superior profitability.
Shares of Bajaj Housing Finance were down 1 per cent at Rs 109, plunging 42 per cent from its post listing high of Rs 188.45 touched on September 18, 2024. The company made its stock market debut on September 16, 2024. At present levels, Bajaj Housing Finance trades over 56 per cent higher when compared to its issue price of Rs 70 per share.
In the prime housing space, Bajaj Housing Finance is currently the second largest, the fastest growing and a high-pedigree housing finance company (HFC) in India.
Going forward, the overall housing segment is expected to grow at a compound annual growth rate (CAGR) of 13.0-15.0 per cent from FY24 to FY27E. Indian governement has been pursuing various social welfare schemes and initiatives to enhance the flow of credit to the housing sector and increase home ownership in India.
However, the company’s portfolio is significantly exposed to real estate and any significant downturn or any adverse developments in the real estate sector may lead to an increase in impairment losses and adversely affect the business, results of operations, cash flows and financial condition.
For the developer financing, loans are given based on the amount of inventory in a project which is provided as security by the developer. If any of the projects, which form part of the collateral for developer financing, are delayed for any reason, it may affect Bajaj Housing Finance’s ability to enforce its security, thereby effectively diminishing the value of such security.
If Bajaj Housing Finance is unable to control the level of Gross Non-Performing Assets/Stage 3 Assets in its portfolio effectively or if it is unable to maintain adequate provisioning coverage or if there is any change in regulatorily-mandated provisioning requirements, its financial condition and results of operations could be adversely affected, highlighted various brokerages in the IPO note.