BLS Polymers shares make blockbuster debut at 65% premium on NSE — should you buy, sell or hold?

Read Also: Former U-19 cricketer, failed IAS aspirant built Rs 100-crore café brand: Story of 'Yummy Bee' founder Sandeep Jangala On the NSE, the listing gain was Rs 9,800 per lot, while on the BSE, the gain per lot was Rs 9,410. The listing performance also exceeded grey market expectations. BLS Polymers shares were commanding a grey market premium (GMP) of around 46 percent ahead of the listing on November 3, according to Investorgain.

The actual listing premium was significantly higher than the unofficial market indication. However, the grey market premium is an unofficial indicator of investor sentiment and does not guarantee listing gains. It can fluctuate depending on market conditions and demand ahead of a company's stock market debut. The strong listing comes after the company's IPO received an overwhelming response from investors, with the issue subscribed 241.22 times, according to NSE data.

Investors placed bids for 287.05 crore shares against 1.19 crore shares on offer. The non-institutional investor (NII) category led the subscription, with its reserved portion subscribed 559.20 times. The qualified institutional buyer (QIB) category was subscribed 200.25 times, while the retail investor portion received bids for 128.36 times the shares reserved for it. The IPO opened for subscription on October 27 and closed on October 29.

BLS Polymers had fixed the price band at Rs 142-150 per share, valuing the company at approximately Rs 930.5 crore at the upper end of the price band. The public issue comprised an entirely fresh issue of 1.7 crore equity shares. The company plans to utilise the proceeds to expand its existing manufacturing facility in Goa and meet its working capital requirements. Of the total proceeds, Rs 77.56 crore has been earmarked for the expansion of its existing manufacturing facility in Goa, while Rs 89.5 crore will be utilised towards working capital requirements.

The remaining proceeds will be used for general corporate purposes. The IPO allotment was finalised on October 30, while refunds and credit of shares to investors' demat accounts were scheduled for November 2. Should you buy, sell or hold? Commenting on the company's listing prospects and investment outlook, Narendra Solanki, Head of Fundamental Research – Investment Services at Anand Rathi Shares and Stock Brokers, said BLS Polymers is positioned to benefit from rising investments in infrastructure sectors.

"Investors may continue to hold the stock from a long-term perspective or partially book profits," he said. Mahesh M. Ojha, Vice President Research & Business Development at Kantilal Chhaganlal Securities Pvt. Ltd. said, "Allotted investors may consider booking partial profits on listing and holding the remaining shares for the medium to long term, considering the company's presence in specialised polymer compounds and infrastructure-related opportunities.

Fresh investors are advised to wait for post-listing price stabilisation before taking an investment decision" Another analyst, Sarvam Goel, Founder of Pocketful said, "Allottees can book partial profits on listing day and track execution of the expansion before adding." Based in New Delhi, BLS Polymers manufactures custom-formulated polymer compounds in different grades for industrial applications.

Its products are used as raw materials for the sheathing, jacketing and insulation of wires and cables deployed across the power, telecommunications and railway sectors. The company's polymer compounds are also used to coat underground oil, gas and water pipelines, helping protect them against corrosion and external environmental factors. BLS Polymers currently operates a manufacturing facility in Goa equipped with 11 dedicated production machines. The proposed expansion is aimed at increasing the production capacity of selected products.