On November 15, ASK Automotive shares made a notable debut on the NSE and BSE, commanding an 8 percent premium over the issue price of Rs 282. Aligning seamlessly with analysts’ projections, the NSE opening stood at Rs 303.3, while the BSE commenced at Rs 304.9. Fueled by commendable financial performance and a dominant presence in the two-wheeler brake shoe and Advance Braking System (ABS) segment, analysts advocate a strategic approach towards ASK Automotive stock, leaning towards a long-term holding strategy.
During the IPO window, spanning from November 7 to November 9, the price band per share ranged from Rs 268 to Rs 282, culminating in a substantial Rs 834 crore garnered from the public issue. Noteworthy is the fact that the entire offering comprised an offer-for-sale of 2.95 crore shares, directing all proceeds exclusively to selling shareholders, with no influx of capital into the company’s coffers.
Fostering robust alliances with leading two-wheeler manufacturers in the country, ASK Automotive boasts a resilient production model grounded in technology and innovation. Financially, the company exhibits robust growth in its topline, coupled with commendable profitability, as underscored by Shivani Nyati, Head of Wealth at Swastika Investmart Ltd.
Nyati advises allottees, who sought the public offering for the listing premium, to judiciously maintain a stop-loss at Rs 290, urging patience for potential upside movements. For those harboring a medium- to long-term perspective, retaining the stock with the specified stop-loss is deemed prudent.
According to Prashanth Tapse, Research Analyst and Senior Vice President for Research at Mehta Equities, the post-listing scenario anticipates heightened demand for ASK Automotive shares. This optimism stems from the IPO’s overwhelming reception across diverse investor categories, particularly robust interest from Qualified Institutional Buyers (QIBs). Furthermore, Tapse contends that ASK Automotive can function as a strategic proxy for growth in the Indian automobile sector.
The IPO elicited a robust investor response, witnessing an oversubscription of 51.14 times and bids for 105.85 crore shares against an issue size of 2.06 crore shares. Retail investors demonstrated a 5.7 times oversubscription, while non-institutional investors (NII) exhibited a substantial 35.47 times oversubscription. QIBs significantly overshot their allotted quota, subscribing at an impressive rate of 142.41 times.
In Tapse’s perspective, ASK Automotive not only offers allotted investors a long-term growth opportunity within the automobile sector but also suggests that those who missed allotments consider ‘accumulating’ on the listing day. This strategic move positions investors for healthy long-term returns, leveraging the market’s inclination to reward players with high visibility and growth potential.
As of fiscal 2023, ASK Automotive claims the pinnacle as India’s premier manufacturer of brake shoes and advanced braking systems for two-wheelers, capturing approximately 50 percent market share in production volume for OEM and the branded independent aftermarket (IAM), when considered collectively. The company’s promoters, Kuldip Singh Rathee and Vijay Rathee, steer its trajectory.
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