Stallion India share price hits 5% upper circuit after strong listing. Should you buy, sell or hold? | Stock Market News

Stallion India Fluorochemicals share price made a strong debut on the stock market on Thursday, January 23, listing at ₹120 per share on the NSE, marking a 33.33% premium over the issue price of ₹90.

Even after a strong start, the stock continued its momentum, hitting the 5% upper circuit limit to reach ₹126. This surge followed a strong investor response to the issue, which was oversubscribed by 188 times, with significant interest coming from the NII segment. The IPO received bids worth nearly ₹26,292 crore compared to the issue size of ₹199.45 crore.

The company proposes to utilise the net proceeds from the fresh issue towards funding incremental working capital requirements, funding capital expenditure for our semiconductor & specialty gas debulking and blending facility (“Khalapur, Maharashtra”), funding capital expenditure for our refrigerant debulking and blending facility (“Mambattu, Andhra Pradesh”), and for general corporate purposes.

Should you buy Stallion India shares post strong listing?

Following the strong listing amid market volatility, analysts remain cautious about further gains and suggest booking profits.

Shivani Nyati, Head of Wealth at Swastika Investmart, noted that the company has strong market recognition and a track record of solid financial performance. She highlighted the company’s successful stock market debut, listing at ₹120 per share. Niyati suggested that those who participated in the initial public offering may consider booking partial profits while maintaining a stop loss at ₹105.

Prashanth Tapse, Senior VP of Research at Mehta Equities, stated that despite high market volatility, Stallion India received a healthy response from investors across all categories. He recommended that investors book profits based on the strong listing performance of recent IPOs.

He cautioned that short-term volatility could follow post-listing, advising non-allotted investors to wait and watch. Regarding valuation, he found the company reasonably priced at the upper price band based on annualised earnings and believes that the company has significant room for healthy business growth, driven by industry tailwinds and scalability.

About Stallion India

The company is in the business of selling refrigerant gases, industrial gases, and related products. Its primary business involves debulking, blending, and processing refrigerant and industrial gases, as well as selling pre-filled cans. It sells its products under the brand name “Stallion.”

It generates the majority of its revenue from the refrigerant segment, which accounts for over 85% of the total revenue as of the end of the September quarter (Q2FY25). The company operates in a highly competitive landscape and competes with existing players, including SRF Limited, Gujarat Fluorochemicals Limited, and Navin Fluorine International Limited.

Notably, some of these competitors are larger than the company in terms of scale, financial resources, manufacturing capabilities, research and development, and other resources. This translates into their having more extensive product portfolios, larger sales teams, intellectual property assets, and broader market appeal spanning multiple divisions.

Disclaimer: The views and recommendations given in this article are those of individual analysts. These do not represent the views of Mint. We advise investors to check with certified experts before taking any investment decisions.