Capitalmind
Capitalmind
Actionable insights on equities, fixed-income, macros and personal finance Start 14-Days Free Trial
Actionable investing insights Get Free Trial
Stocks

Just Dial Lists, Scores Big at 622+, 17% Higher

imageJustDial, the new IPO in town, has scored a big listing today with the current price at Rs. 622, a 17% increase from the issue price of Rs. 530. The gains are even larger for retail investors who got the shares at Rs. 483, a Rs. 47 discount – they score 29% in about 15 days.

In my JustDial IPO review, I had mentioned that while the issue is overpriced from a valuation perspective, the fact that there are few companies in this space and the “safety net” offered to retail investors by the promoters clinches it (for me). I had applied for the IPO but received only 25 shares (one lot) – it seems there were so many applicants that they have had to allot the shares through a lottery.

The IPO was oversubscribed nearly 12 times, with retail investors bidding for 3.3 times their quota, and institutions asking for more than 10x theirs.

While it may seem that the gains are enormous, the low allocation makes it nothing to write home about. 25 shares at Rs. 622 means a gain of just Rs. 3,475, which isn’t quite that attractive. (Buys my son a Lego toy, though!)

At this price, the P/E approaches 70. Honestly, I don’t see JustDial as this bleeding edge technology play which deserves the valuation.

Disclosure: Long for now. Given this wasn’t a technical trade I’m not really sure if one should play this with a trailing stop loss. Over the course of the day I will decide to sell or stay.