Studds Accessories shares slip 2% below IPO price. What should investors do?

Shares of Studds Accessories Ltd, one of India’s leading helmet and two-wheeler accessories makers, slipped 2% below its issue price of Rs 585 per share. The counter made a muted stock market debut on Thursday, listing at a 3% discount earlier in the day.

The weak listing-day performance was largely in line with the broader market mood, as overall sentiment on Dalal Street remained subdued. Indian equities extended their losing streak for a third straight session on Friday, with both the Sensex and Nifty slipping further amid persistent foreign outflows, a cautious global backdrop, and short-covering pressure that continued to weigh on investor confidence.

Studds’ Rs 455.50-crore IPO was subscribed an impressive 73.3 times overall, signalling robust interest from both institutional and retail investors. QIBs drove the frenzy with 160x subscription, followed by NIIs at 77x, and retail investors at 22x. The issue drew bids for nearly 40 crore shares against 54.5 lakh shares on offer.

What should investors do?

According to SBI Securities, Studds Accessories holds a leadership position in India’s two-wheeler helmet industry, backed by a fully integrated manufacturing setup that covers the entire value chain—from design to finished products. As of FY24, the company commanded a 27.3% market share by volume and 25.5% by value in the domestic market.

Looking ahead, SBI Securities expects demand tailwinds from an anticipated recovery in the domestic two-wheeler segment, aided by GST rationalisation, rising safety awareness, and stricter regulatory norms. “At the upper price band of Rs 585, Studds is valued at a P/E of 33.1x (FY25 earnings) — a reasonable valuation for a category leader with consistent performance and brand equity,” SBI report added.

“The company benefits from advanced manufacturing infrastructure and strong design and development capabilities, supported by highly integrated operations that cover the entire production value chain. Studds also has a well-established pan-India presence and a steadily expanding international footprint, driven by its extensive sales and distribution network. Its commitment to stringent quality standards is reflected in multiple major global and domestic accreditations, reinforcing its reputation for reliability and excellence,” Anand Rathi said while giving a ‘Subscribe’ rating to the IPO previously.

“At a valuation of P/E multiple of 33.1x (FY25 EPS of Rs 17.7) and an EV/Sales multiple of 3.8x, SAL appears fairly priced. Its dominant market position, strong brand recall, and growing presence across domestic and international markets, coupled with favourable industry tailwinds and consistent financial performance, position it well for sustainable growth,” Choice Equity Broking said.

At about 10:50 am, Studds stock price was trading at Rs 573.55 per share, down 2% from its issue price.

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