Gem Aromatics shares surge another 5% after modest listing on NSE, BSE. What should investors do?

The shares of Gem Aromatics surged 4.7% to their day’s high of Rs 349 on the BSE after listing with a modest 2.5% premium at Rs 333.10 over the issue price of Rs 325.

From the IPO price, the company’s shares gained 7.4% in intraday trade on the BSE on Tuesday.

In the grey market, Gem Aromatics shares were trading at a 9% premium before their debut, indicating expectations of a mildly positive listing.

Gem Aromatics IPO

Vikram Solar’s Rs 451.25 crore IPO, which was open from August 19 to 21, included a fresh issue of Rs 175 crore and an offer for sale amounting to Rs 276.25 crore. The allotment was finalized on August 22.

The IPO attracted significant investor interest, receiving an overall subscription of 30.45 times. Demand was led by Qualified Institutional Buyers (QIBs), who subscribed 53.76 times, followed by Non-Institutional Investors (NIIs) at 45.96 times. The retail segment saw a subscription of 10.49 times.

Funds raised through the IPO will primarily go towards repaying borrowings of Rs 140 crore and meeting general corporate requirements.

About Gem Aromatics

Established in 1997, Gem Aromatics manufactures specialty ingredients such as essential oils, aroma chemicals, and value-added derivatives.

Its offerings cater to industries such as oral care, pharmaceuticals, nutraceuticals, wellness, and personal care, serving customers across 18 countries.

What should investors do?

“For short-term investors, it is best to book profits after listing if the stock shows further strength, as sentiment-driven premiums are already factored into the price. Medium-term investors should wait and monitor quarterly results and margin performance to assess whether demand remains strong,” said brokerage firm Master Capital Services.

Meanwhile, the brokerage suggested that long-term investors hold part of their shares due to the company’s unique position in specialty ingredients.

However, the execution of expansion plans and visibility of earnings will be crucial.

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(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of the Economic Times)