VMS TMT share price hits 5% lower circuit after decent listing. Should you buy, sell or hold?

VMS TMT share price gave up listing gains and hit a 5% lower circuit on Wednesday after making a decent stock market debut. VMS TMT IPO listing date was today and the stock was listed on BSE and NSE.

VMS TMT shares were listed at ₹104.90 apiece on NSE, a premium of 5.96% over its issue price of ₹99. Meanwhile, on BSE, the stock was listed at ₹105, a premium of 6.06% to its issue price

However, VMS TMT shares succumbed to selling pressure after debut and hit 5% lower circuit. The stock was locked at ₹99.75 apiece on the BSE, down 5% from listing price, and up 0.76% from its issue price.

VMS TMT IPO listing was below Street estimates, as the trends seen in the grey market premium (GMP) and analysts signalled a higher listing premium. VMS TMT IPO GMP today ahead of listing was ₹11 per share, or 11.11% over the IPO price.

VMS TMT IPO received a strong subscription of 102.26 times in total. The company manufactures Thermo Mechanically Treated (TMT) bars. Most analysts suggest investors to hold VMS TMT shares after listing and wait for further upside.

Should you buy, sell or hold VMS TMT shares after listing?

“VMS TMT’s operations are heavily concentrated in Gujarat. In recent years, over 98% of its revenue came from Gujarat. The business is in a cyclical, capital-intensive sector with significant leverage and concentrated geography. VMS TMT IPO listing provides moderate upside but also exposure to downside risk. Investors may consider booking partial profits early and hold the remaining VMS TMT shares with a stop-loss of ₹90,” said Shivani Nyati, Head of Wealth at Swastika Investmart Ltd.

Master Capital Services noted that VMS TMT IPO listing at a modest 6% premium over the issue price indicates a good and not exuberant listing, especially vis-a-vis ultra high subscription figures of over 102 times.

“In the post-listing phase, the approach of the company should continue as one of demonstration of steady growth of revenue as well as profitability through proper use of IPO funds. Stressing debt reduction initiatives will also become crucial in mobilizing investor confidence as a lean and improved balance sheet increases return ratios. Other than that, expansion of the distribution network beyond Gujarat and strengthening of dominance positions at the ultra-competitive TMT bar segment can become a long-term growth driver,” said Master Capital Services.

It recommends investors to wait-and-watch with the stock performance likely being a function of how quickly the VMS TMT achieves operational efficiency and increases marketplace dominance.

Jickson Sajee, Research Analyst INVasset PMS said that the VMS TMT share listing was measured but constructive.

“A modest listing premium despite a ferocious book underscores realistic expectations and a market rewarding balance-sheet repair over blue-sky projections. Near-term price discovery should hinge on throughput, margin execution and receivable discipline rather than sentiment alone,” said Sajee.

At 1:35 PM, VMS TMT share price was still locked at ₹99.75 apiece on the BSE, down 5% from listing price, and up 0.76% from its issue price.

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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 making any investment decisions.