Happy Forgings lists at 18% premium; RBZ Jewellers, Credo Brands make flat debut

The Indian equity market continues to see surge in new listings, with three more companies making debut on the stock exchanges today. Happy Forgings, RBZ Jewellers, and Credo Brands Marketing are new entrants to the bourses, a day after Jewellery retailer Motisons Jewellers, Mumbai-based realtor Suraj Estate Developers, and micro lender Muthoot Microfin debuted on Dalal Street.

While Happy Forgings made a strong debut, RBZ Jewellers and Credo Brands started on a muted note. Shares of Happy Forgings were listed at ₹1,000 on the NSE, a premium of 17.64% over the issue price of ₹850 apiece. On the other hand, shares of Credo Brands, the parent company of Mufti Menswear, debuted at ₹282.35, up 0.84% on the NSE, against the issue price of ₹280 apiece. RBZ Jewellers also made a subdued start as its shares were listed flat at ₹100, at par with the IPO issue price on the NSE.

Post listing, Happy Forgings shares gained as much as 22% to ₹1,037.70 on the NSE; RBZ Jewellers rose 5% to ₹105; and Credo Brands shares climbed 6.7% to ₹298.85 apiece. The sentiment was lifted by positive broader market, with BSE Sensex and NSE Nifty gaining up to 0.6% in the first two hours of trade so far.

Shivani Nyati, Head of Wealth, Swastika Investmart, says that the listing of Happy Forgings, the esteemed manufacturer of complex machinery components, is slightly below pre-listing expectations. “Happy Forgings presents a mixed bag for investors. The lower-than-expected listing raises concerns, but the decent gain and strong fundamentals offer a counterpoint. A careful evaluation of both sides is crucial before making any investment decisions.”

“Given the uncertainty surrounding the listing, a cautious approach is recommended. Existing investors in the IPO may consider holding their shares with a stop loss at ₹900. However, investors who were looking for listing gains may exit their positions,” Nyati says.

Happy Forgings raised ₹1,008 crore at a price band of ₹808 to ₹850 per equity share, which received strong response from investors. The issue was subscribed 82.04 times, with the portion for qualified institutional bidders (QIBs) booking 220.48 times. The quote for non-institutional investors (NII) and retail investors were subscribed 62.17 times and 15.09 times, respectively. The company had reserved half of the issue for QIB, 15% for non-institutional investors, and 35% for retail investors. The company intends to use the capital raised from the issue of fresh equities to buy machinery, plant, and equipment; pay off all or a portion of some outstanding loans, and meet general corporate purposes.

On listing of Credo Brands, Nyati states that the lackluster performance falls short of pre-listing expectations. “Despite the disappointing listing, Credo Brands still possesses its core strengths, including a strong brand, a wide distribution network, and consistent financial performance. However, the flat debut highlights the potential risks associated with the highly competitive market, seasonality, and current market sentiment.”

She suggested that investors may consider exiting their holdings, but long-term investors with high-risk capacity may hold their position by keeping stop loss.

Mumbai-based Credo Brands Marketing, which owns Mufti brand, garnered ₹550 crore at the upper end of the price band of ₹266-280 per share. The issue was overall subscribed 51.85 times as the portion for qualified institutional bidders (QIBs) and non-institutional investors' were booked 104.95 times and 55.52 times, respectively. The quota reserved for retail investors received 19.94 times bids.

For RBZ Jewellers, Nyati suggested that investors may exit their positions. The lackluster listing, in line with the subdued grey market trend, reflects cautious investor sentiment toward the company despite its apparent strengths. “While RBZ Jewellers possesses strong fundamentals and a fair valuation on the surface, the significant risks cannot be overlooked. The flat listing serves as a stark reminder of the potential pitfalls associated with gold price volatility, client concentration, informal artisan arrangements, and intense competition,” she says.

The ₹100 crore IPO of jewelers, which opened for subscription between December 19-21, were offered at a price band at ₹95 to ₹100 per equity share. The issue was booked 6.86 times, led by retail investors as the quota reserved for them witnessed a robust subscription rate of 24.74 times. The portion for NIIs was subscribed 9.27 times and the QIB segment was booked 13.43 times.

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