FirstCry shares had a strong start in the stock market today, with prices opening at ₹625 on the BSE and ₹651 on the NSE. The shares quickly rose to an intraday high of over ₹707 but then fell back due to profit-booking.
Market experts say FirstCry’s shares have performed well on their first day, but they’re trading much higher than their estimated fair value of ₹550 to ₹575. They recommend that investors who were allotted shares consider selling and taking profits. The company, Brainbees Solutions Limited, which owns the FirstCry brand, is facing financial challenges, including ongoing losses, regulatory issues, and rising debt.
Akriti Mehrotra, a research analyst at StoxBox, highlighted that while FirstCry has successfully combined its online and offline platforms, it continues to struggle with negative cash flows and increasing debt. In the 2024 financial year, the company saw a 15% revenue increase but also reported significant losses and a rise in debt. The funds from the share issue are mainly for operational purposes, not debt reduction, which raises concerns about the company’s financial stability.
Arun Kejriwal, founder of Kejriwal Research and Investment Services, expects sharp selling in FirstCry shares after their strong debut. He advises those who received shares during the allotment process to sell and take profits, with the option to consider buying again when the stock price drops closer to its fair value.
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