VMS TMT shares hit 5% lower circuit after modest listing gains. What should investors do?

The shares of newly listed company VST TMT hit their 5% lower circuit of Rs 99.75 on the BSE in intraday trade today, after listing at a 6% premium over its IPO price of Rs 105.

On the NSE, VST TMT shares listed at Rs 104.90, marking a 5.96% premium compared to the IPO price of Rs 99.

With this decline, what should an investor do?

VST TMT is in the steel/metal sector, manufacturing Thermo Mechanically Treated (TMT) bars used for construction. Its operations are heavily concentrated in Gujarat, with over 98% of revenue coming from the state in recent years.

“The business is in a cyclical, capital-intensive sector with significant leverage and concentrated geography,” notes Shivani Nyati, Head of Wealth at Swastika Investmart. She added, “The listing provides moderate upside but also exposes investors to downside risk. Investors may consider booking partial profits early and holding the remainder with a stop-loss of Rs 90.”

Further, brokerage firm Master Capital Services said that the listing of VST TMT at a modest 6% premium over the IPO price indicates a good, not exuberant, listing—especially compared to ultra-high subscription figures of over 102 times.

“The issue, formed entirely as a fresh issue and intended to fund debt reduction and general corporate purposes, is a positive sign as it strengthens the balance sheet and enhances financial flexibility. In the post-listing phase, the company should focus on steady revenue growth and profitability through proper use of IPO funds,” the brokerage noted.

Emphasizing debt reduction initiatives will also be crucial in mobilizing investor confidence, as a leaner, stronger balance sheet increases return ratios.

Additionally, Master Capital noted that expanding the distribution network beyond Gujarat and strengthening dominance in the ultra-competitive TMT bar segment can serve as a long-term growth driver.

“Investors may remain in an await-and-watch mode, with stock performance likely depending on how quickly VST TMT achieves operational efficiency and increases market dominance,” Master Capital Services advised.

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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)