Crizac Stock Soars on introduction by 15 percent! To Buy, Sell or Hold? Insiders Opinion
The timing thus far long-awaited by IPO investors has finally arrived! Crizac shares hit the NSE today and made a blockbuster debut at an opening price of a whopping 162, a good 15 per cent premium to its IPO price of 141. It is electric in the air, portfolios are flashing green, but only one question resounds on the trading screens, namely, should I cash out or should I ride with the wave?
The Opening Bell of Euphoria
When markets opened in the morning, Crizac (NSE: CRIZAC) leaped right up to 162 rubbing the after-IPO money of 1 lakh invested money into 1.15 lakhs even before sleep. It must be sweet revenge to retail investors who queued at the time of the subscription rush (the IPO was oversubscribed 82 times!). Priya Mehta, a Mumbai investor, said, it is a dream start. Now I am afraid to get carried away with party when I feel I should worry about a pullback.
The Reason analysts are divided
Experts disagree on the way forward despite the fact that the listing pop triggers celebration:
The Bulls are Roaring:
According to Arvind Sethi of CapitalFirst Securities, Crizac is a player controlling a niche of precision industrial components. They have a new round of expansion where they raised 191 crores fresh capital and a fall in their debts? This may only be the initial step.” He indicates the PE ratio of 35x to be justified in case of high-growth players.
The Tentative Camp:
Financial advisor Neha Reddy cautions that in case of such a spike, profit-booking is inevitable. Its valuation is very hefty relative to its peers such as Dynacon and PrecisionTech, which trade at 25-28 time PE. There is a need to wait with new investors during the time of consolidation.
Buy, Sell or Hold?
That decision is all yours depending on risk appetite and objectives:
Listing Day Investors (Allottees):
Got shares? Part profit-taking creates gains, says Reddy. Presently, sell 30-50 percent. Keep the others should you support their growth strategy.”
Didn?’t get IPO? Want to Buy Now?
Or looking on the rise? Sethi tells people to steer clear of FOMO buying this week. Wait 1-2 weeks. When it stays above 150, then it is strong.”
Long-Term Holders:
According to Reddy, review their quarterly results. This is essential in the implementation of the expansion plans. Hold should there be an improvement in margins by Q3.”
The Emotional Reality Check
Cmon, the 15 percent jump is awesome. However, IPO fever can die out quickly. June of 2021 was when we last heard about Paras Defence (2021). It traded at 170 percent premium, and after 3 months collapsed to 40 percent. Being small market cap ( 1200 crore) ensures that Crizac will be volatile.
Red Flags to look out for Critically
High Concentration Risk: This means that 65 percent of the revenues are generated by only 5 clients.
Margin Pressure: The increase in the cost of inputs may pressure 18 percent EBITDA margins.
Execution Risk: Until 2026, new factories need to enter operation in order to justify value.
