Pre-IPO lockin of 14 companies to expire in 2022; analysts remain positive on major players

The mandatory lock of the pre-IPO investors in these 14 mainboard companies, which were listed in November-December 2021, will expire during the rest of the calendar year 2022.

The list includes startup players and traditional businesses from financial services, industrial mining, speciality chemicals, pharmaceuticals, real estate.

The listed entities include new-age companies such as FSN E-Commerce Ventures (Nykaa),

(), (), and , , , , Tarson Products, , , , Supriya Lifesciences and HP Adhesives.

These companies cumulatively collected about Rs 44,760 crore from the primary market during the period, with Paytm (Rs 18,300 crore) being the biggest one, whereas Sigachi and HP Adhesives (Rs 130 crore each) were smallest among the lot.

ETMarkets.com

Source: Nuvama Wealth Management

In terms of listing pop, not many of the shares have rewarded investors as issues like Paytm and Shriram Properties dropped 27% and 16%, respectively, by the end of day one. However, Sigachi soared 296% and Nykaa rallied 96% on their first day.

In terms of overall returns so far, Fino Payments Bank, PB Fintech and Paytm are down 60%-70% each from their issue prices. On the other hand, Go Fashions and Sigachi Industries are trading 93% and 63%, respectively, higher in their issue prices.

Half a dozen companies – Nykaa, Fino Payments, PB Fintech, Paytm, Sigachi Industries and

– are trading more than 50% from their 52-week highs, whereas only two names – Sapphire Foods and Go Fashions – have zoomed over 50% from their 52-week lows.

Brokerage firms and market analysts have a mixed view on these stocks but majority of them have a buy rating from one brokerage or the other.

Abhilash Pagaria, Head, Alternative & Quantitative Research, Nuvama Wealth Management, said most of the stocks will continue to remain under pressure for the next few weeks.

“A lot of pre-IPO investors, who entered these names at much lower levels, will look to part some stake once lock-in opens,” he added. “We are recommending investors to buy Nykaa and Sapphire in a staggered way as we see value in them.”

Global brokerage firm Goldman Sachs maintained a ‘buy’ rating on Paytm with a target price of Rs 1,100. The September quarter numbers were better than expectations, across both topline and EBITDA.

“The global investment bank raised estimates for Paytm on the back of results. It sees consistent improvement in profitability as a key catalyst,” it added.

On Nykaa, Dolat Capital has a buy rating with a target price of Rs 1,420, whereas HDFC Securities has initiated coverage on the stock with a ‘sell’ rating and a target price of Rs 800.

Wealth Research had recommended to buy SJS Enterprises with a target price of Rs 590, whereas Emkay Global pegs Sapphire Foods at Rs 1,650 with a buy rating.
has a buy rating on both PB Fintech and Go Fashion (India) with a target price of Rs 550 and Rs 1,600, respectively, whereas the brokerage has a hold rating on Tarson Products with a target price of Rs 755.

(Disclaimer: Recommendations, suggestions, views, and opinions given by the experts are their own. These do not represent the views of Economic Times)