The stock is still trading at a premium of 66% over the issue price.
Citing bumper listings and very little room for investors to make fresh buys at current levels, Dhruv Mudaraddi, research analyst at Stoxbox has advised investors to book profits and invest later in the company after evaluating its quarterly performance in the near term.
Echoing similar sentiments Shivani Nyati, Head of Wealth at Swastika Investmart, also recommended profit-taking. “The issue came at a P/E of 43x, which was fully priced. Thus, considering such a premium on listing, allottees who applied for the public offering for listing premium are advised to book profits,” Nyati said.
In the long run, analysts still believe the stock does give value in holding, but buying on dips or after further scrutiny of the company in the coming quarters would be prudent.
“Investors with a long-term view may hold it by keeping a stop loss at Rs 1,260. A fresh buy will not be recommended at such a high level,” Nyati added.
The stock was listed at Rs 1,400, higher than most estimates that predicted listing gains in the range of 60-65%. DOMS Industries designs, develops, manufactures, and sells a wide range of ‘stationery and art’ products, primarily under its flagship brand ‘DOMS’, in the domestic market as well as in over 40 countries internationally. It has emerged as the second largest player in India’s branded stationery and art products market, with a market share of around 12% by value in FY23.
The other strengths of the company include market leadership, a strong brand presence, established international partnerships, and a foothold in the export market.
The company proposes to use the net proceeds for part funding of the cost of establishing a new manufacturing facility and general corporate purposes.
The company’s revenue from operations fell 41% year-on-year to Rs 403 crore in the financial year 2023. It had clocked a loss of Rs 6 crore in the same period as against a profit a year ago.
JM Financial, BNP Paribas, ICICI Securities and IIFL Securities acted as the bankers for the issue.
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