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Ruchi Soya FPO lists at strong premium. Should you sell, hold or buy?

Ruchi Soya FPO listing: Ruchi Soya share price may see some selling pressure on an immediate basis as it may see unwinding in FPO arbitrage positions, believe stock market experts. (MINT)Premium
Ruchi Soya FPO listing: Ruchi Soya share price may see some selling pressure on an immediate basis as it may see unwinding in FPO arbitrage positions, believe stock market experts. (MINT)

  • Ruchi Soya FPO listing: Ruchi Soya share price today opened at 855 on NSE whereas on BSE, it opened at 850 apiece levels, giving more than 30 per cent premium to the allottees

Ruchi Soya FPO (Follow-on Public Offering) listed today at Indian bourses delivering strong premium to the allottees. On NSE, Ruchi Soya share price today opened at 855 whereas on BSE it opened at 850 apiece levels, giving more than 30 per cent premium to the subscribers who got Ruchi Soya shares through FPO allocation process. 

According to stock market investors, those bidders who applied for arbitrage gains in Ruchi soya FPO, are advised to book profit and exit whereas those who have applied for Ruchi Soya shares keeping long-term time horizon in mind can book 50 per cent profit and hold the remaining investment for 3 month target of 1,000 per share levels keeping trailing stop loss at 740 per share levels.

Speaking on Ruchi Soya FPO listing; Ravi Singhal, Vice Chairman at GCL Securities said, "Those who got Ruchi Soya shares during allotment are advised to book 50 per cent profit and hold the rest for 3 months target of 1,000 apiece levels maintaining strict trailing stop loss at 740 per share levels." Ravi Singhal of GCL securities went on to add that raw material prices in FMCG segment is soaring and the company has good buffer stock that would give them margin benefit in near term. So, the company is expected to report strong quarterly numbers in short to medium term.

Echoing with Ravi Singhal's views; Santosh Meena, Head of Research at Swastika Investmart Ltd said, "Ruchi Soya share price may see some selling pressure on an immediate basis as it may see unwinding in FPO arbitrage positions. Therefore, investors who applied for arbitrage gain, should book profit and exit while long terms investors can remain invested because multiple positive things are going for the company like shortage of palm oil and oilseeds is expected to improve the realizations, which augur well for the profitability in the short to medium term."

In last two days, Ruchi soya share price has ascended from 750 to 885 apiece levels (its intraday high on NSE), logging near 18 per cent rise in this period.

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint.

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Asit Manohar

Chief Content Producer at Live Mint Digital Team
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