Hariom Pipe Shares List at 44% Premium on D-Street. Should Investors Buy, Sell or Hold Post Listing?

Hariom Pipe Stocks: After Hariom Pipe Industries made a strong debut on Dalal Street, shares were in demand, with the stock locked in a 5 per cent upper circuit on April 13. The steel and iron pipe manufacturer listed at Rs 220 on NSE, a premium of 44 per cent over its issue price of Rs 153. On the BSE, the counter listed at a premium of 40 per cent.

As the stock trades in a “trade-for-trade” segment, there is a 5 percent circuit on either sides and intraday trading is not allowed in these stocks, only delivery of shares is permitted.

Experts, who expected a 10-16 per cent listing gains, advised booking partial profits to those who invested in the IPO for listing gains. Medium-to-long- term investors should hold the stock for better returns.

Arafat Saiyed, Senior Research Analysts at Reliance Securities said that the company is backed by strong financials and is looking to expand its capacity from the net proceeds from the stake sale.

“The stock is fairly valued at the current levels and we are more upside in the counter to Rs 300 in the near term,” he added. “Investors can hold its longer-run but the fresh entry should be made below Rs 200 only.”

Santosh Meena, Head of Research, Swastika Investmart, said the good listing can be attributed to good market sentiments and good prospects for the steel pipes industry. “The company has an integrated nature of operations, a cost-effective process, and an experienced management team. However, the cyclical nature of the industry, and commoditized nature of products make it suitable only for the aggressive investors in the long term. Those who applied for listing gains can maintain a stop loss at Rs 195.”

Astha Jain, Senior Research Analyst at Hem Securities said that investors may book partial profits and hold the remaining position for more upside. Jain sees the counter to hit the target of Rs 275-280 in the near term. “We would suggest the investors should look to buy fresh positions in the range of Rs 180-200, he added.”

The issue was overall subscribed a little less than 8 times, thanks to heavy bidding from retail investors, whose quota was subscribed 12.15 times. The HNI portion was subscribed 8.9 times, whereas QIB allocation fetched less than two times bids.

Hariom is an integrated manufacturer of mild steel (MS) pipes, scaffolding, HR strips, MS billets, and sponge iron. It uses iron ore to produce sponge iron, which is processed across various stages to manufacture final products—MS pipes and scaffolding—making the company’s manufacturing process cost-effective.

Hariom Pipe Industries had reported healthy financial performance so far, as profit in FY21 grew by 91.5 per cent to Rs 15.13 crore and revenue jumped by 58 percent to Rs 254 crore. In the six months ending September 2021, the company clocked a profit of Rs 12.87 crore on revenue of Rs 200.87 crore.

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