Manoj Vaibhav Gems N Jewellers, commonly known as Vaibhav Jewellers, made a lukewarm stock market debut on October 3, with its share price matching its IPO price of Rs 215. While some analysts recommend holding the stock for the medium to long term, Shivani Nyati, Head of Wealth at Swastika Investmart, suggests exiting positions due to the high IPO price and the competitive nature of the jewelry market.
The company’s initial public offering, which opened on September 22 and closed on September 26, received a subscription of 2.25 times. High-net-worth individuals showed strong interest, subscribing 5.18 times their allotted quota. However, the response from qualified institutional buyers and retail investors was muted, with subscription rates of 1.06 times and 1.66 times their respective portions. As of 2 pm, the stock had risen by 2.63 percent to Rs 220.65 on the NSE.
The key question now is whether to buy, sell, or hold the stock. Let’s see what the experts are saying.
Exit Positions: Swastika Investmart
Shivani Nyati noted that the IPO of Manoj Vaibhav Gems and Jewels had received a subdued response, possibly due to factors like the high IPO price, the company’s relatively small size, and the competitive jewelry market. She advised investors who were allotted shares in the IPO to consider exiting their positions.
Hold for the Long Term: Hem Securities
Hem Securities recommends holding the stock for the long term, citing the company’s status as a key regional brand with a hyperlocal retail strategy. The company has an early mover advantage in Andhra Pradesh and is gradually expanding into Tier II and Tier III cities, according to Astha Jain, Senior Research Analyst at Hem Securities.
Hold for Medium to Long Term: StoxBox
Dhruv Mudaraddi, Research Analyst at StoxBox, highlighted the company’s steady revenue growth and robust profit growth, which has more than tripled in two years. Manoj Vaibhav Gems N Jewellers also boasts a 23 percent return on equity in FY23, making it attractive compared to its listed peers. With plans to open eight new stores targeting Tier 2 and Tier 3 markets, the company is well-positioned, especially as rural markets contributed 50-52 percent of the total jewelry market in FY23. StoxBox remains positive on the company and recommends investors who received allocations to hold the stock from a medium to long-term perspective.
In summary, opinions on Vaibhav Jewellers’ stock vary, with some advising an exit due to concerns about its IPO pricing and competition, while others see long-term potential in the company’s regional brand and expansion plans.
