Campus Activewear Limited, a sports and athletic wear firm, made an outstanding debut on the stock exchanges on May 9, listing at a premium of 23.28 percent to its issue price of Rs 292 per share.
Even as equity benchmarks traded in the negative, the stock started at Rs 360 on the National Stock Exchange (NSE) and Rs 355 on the Bombay Stock Exchange (BSE).
Given the robust reaction to the initial public offering and the company’s strong position in the economy and mid-segment of sports apparel with good management, the stock was predicted to gain roughly 25% upon its initial public offering.
Campus Activewear Limited is India’s leading sports and athleisure footwear brand, with integrated production facilities, high brand awareness, and a well-established distribution network.
What should investors do with the stock now?
Brokers advise clients to subscribe to the issue for both listing profits and long-term investment.
Santosh Meena, Head of Research at Swastika Investmart Ltd, remarked, “The company’s strong listing amid such a tumultuous market underlines the intrinsic strength of the company’s business and fundamentals.”
The firm has a large growth runway and solid long-term potential. “Those who applied for listing gains should keep a stop loss of Rs 300 in place, but we suggest this company to both existing and new investors for the long run,” Meena added.
The IPO brought around Rs 1,400 crore for the firm. The firm did not receive any money from the offering because it was an offer for sale, with the monies going to the selling shareholders.
During the April 26-28 period, the issue was subscribed 51.75 times, with investors of all types participating.
Non-institutional investors submitted bids for 22.25 times their allocated amount, while qualified institutional investors lapped up 152 times their permitted quota.
Retail investors were enrolled 7.68 times, while workers were subscribed 2.11 times.
Experts advised investors to exercise caution due to market mood and volatility.
“Investors should book a partial profit in Campus if it trades at a 20% premium to the issue price and keep the rest for the long term,” Astha Jain, Senior Research Analyst at Hem Securities, said.
She believes the firm, with its great brand awareness and inventive branding and marketing approach, is a good place to put money.
“Considering current market circumstances and sentiments, traders should not shy away from taking gains on the listing day,” Harshad D Gadekar, Research Analyst, GEPL Capital, said.
However, he advised investors to keep the shares as an investment because the firm has a great brand recognition and excellent fundamentals.
Market volatility has been strong in the recent month, with India VIX, a measure of projected change over the next 30 days, hitting the 20% barrier once more.
As the Reserve Bank of India begins policy tightening, the Sensex and Nifty50 have corrected more than 9% in the month, wiping out Rs 18 lakh crore in investor value.
Even as market confidence continues to be weighed down by the Russia-Ukraine conflict, signals from the Federal Reserve are not encouraging.
“Investors should book profits on the listing day, and those who are going to purchase on the listing day should stay away for now and revisit once markets have stabilised,” said Prashanth Tapse, Research Analyst & VP Research, Mehta Equities.
Tapse is optimistic about the company’s long-term prospects, stating that “the business is attractive” and that “market turbulence will provide a greater chance to add the same at lower prices.”
At 11 am, the stock was trading at Rs 368.85, up Rs 76.85, or 26.3 percent, from the issue price.