ECOS Mobility extends gains after a decent listing: Should you buy, sell or hold now?

ECOS Mobility's share price made a positive debut on the bourses today. On NSE, ECOS Mobility's share price opened at ₹390 per share, 16.77 per cent higher than the issue price of ₹334. On BSE, ECOS Mobility's share price today opened at ₹391.30 apiece, up 17.16 per cent from the issue price.

Following a decent debut, the newly listed ECOS Mobility share price witnessed extended gains post-listing and touched an intraday high of ₹456, recording over a 36.5 per cent jump against the listing price. Meanwhile, its intraday low was ₹380.10.

According to experts, despite the positive start, investors should be cautious about ECOS Mobility due to the company's mixed financial performance, with declining profitability despite revenue growth. The IPO's higher valuation, based on the P/E ratio, likely tempered the listing gain. Additionally, as the IPO was a complete offer for sale, the company won't receive new funds to support growth. A stop loss of around ₹350 is advisable for those holding the stock.

Should you buy, sell, or hold post-listing?

Shivani Nyati, Head of Wealth, Swastika Investmart said:

ECOS Mobility & Hospitality made a promising stock market debut, listing at Rs. 390 per share, a 16.77 per cent gain over its issue price of Rs. 334. This positive performance was fueled by the strong investor interest in the IPO's 64.18 times subscription and a substantial grey market premium.

While the listing was encouraging, investors should remain cautious due to the company's mixed financial performance. Despite top-line growth, profitability has declined, indicating potential challenges in managing costs and maximizing returns.

The IPO's valuation appeared higher, based on the P/E ratio, which might have contributed to the relatively modest listing gain compared to the pre-listing hype. Additionally, the company's status as a complete offer for sale means it won't receive any new funds from the IPO, potentially limiting its ability to accelerate growth or address challenges.

In conclusion, ECOS Mobility & Hospitality's strong listing debut is a positive sign, but the mixed financial performance and elevated valuation warrant a cautious approach. Those who want to hold it may keep a stop loss at around 350.

About the IPO

Ecos (India) Mobility and Hospitality Ltd launched its IPO on August 28 and closed on August 30, 2024. The share price range was set between ₹318 and ₹334 per equity share, with a face value of ₹2. The company secured ₹180.36 crore from anchor investors.

The IPO, valued at ₹601.20 crore, was entirely an offer for sale, comprising 1.8 crore equity shares. Promoters Rajesh and Aditya Loomba sold up to 99 lakh and 81 lakh shares, respectively. As a result, the company will not receive any proceeds from this offer, with all profits going to the selling shareholders based on the number of shares they sold.

The IPO closed with overwhelming demand, with the issue being subscribed 64.18 times. It received bids for 80.86 crore shares as against 1.26 crore on offer. The Qualified Institutional Buyers (QIBs) category was booked 136.85 times, while the Non-Institutional Investors portion was subscribed 71.17 times. The Retail investors' quota was bid 19.66 times.

About ECOS (India) Mobility & Hospitality Limited

Founded in February 1996, ECOS (India) Mobility & Hospitality Limited specializes in providing chauffeur-driven car rental services across India. The company primarily focuses on chauffeured car rentals (CCR) and employee transportation services (ETS), catering to corporate clients, including several Fortune 500 companies operating in the country.

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before taking any investment decisions.