Tempsens Instruments shares slide over 4% on profit booking after record listing

Synopsis

Tempsens Instruments shares fell over 4% on Monday as investors booked profits after the stock’s blockbuster debut on Friday. The shares had listed at a premium of more than 111% over the IPO price following strong demand for the Rs 650-crore issue, which was subscribed 184 times during the bidding period.

Shares of Tempsens Instruments fell more than 4% on the National Stock Exchange (NSE) during Monday’s trading session, as investors booked profits following the stock’s blockbuster market debut on Friday (August 28).

The stock opened at Rs 579, below its previous close of Rs 586.65, and fell to an intraday low of Rs 562.55. It later recovered some losses and was trading at Rs 576.25, down 1.77%, as of 10:01 am.

Despite Monday’s decline, Tempsens Instruments continued to trade about 92% above its IPO price of Rs 300.

Tempsens Instruments made a strong debut on Friday, with its shares listing at Rs 634 on the NSE — a premium of more than 111% over the issue price.

The bumper listing followed strong demand for the company’s Rs 650-crore public issue, which was subscribed 184 times during the three-day bidding period.

The IPO comprised a fresh issue of shares worth Rs 95 crore and an offer for sale of Rs 555 crore by existing shareholders. Ahead of the public issue, the company raised Rs 194.54 crore from anchor investors.

Tempsens Instruments manufactures thermal-engineering products and specialised cables. Its portfolio includes temperature sensors, non-contact temperature-measurement systems, electrical-heating solutions and specialised cables used across several industries.

The company plans to use Rs 73.13 crore in net proceeds from the fresh issue to support its expansion and strengthen its balance sheet. It intends to allocate Rs 18.13 crore towards capital expenditure for its electrical-heating and specialised-cable businesses and Rs 55 crore towards the repayment of outstanding borrowings.

Analysts have advised investors who received IPO shares to assess their positions based on their investment horizon and risk appetite: those who invested primarily for listing gains may consider booking some profits after the sharp debut, while long-term investors may continue to hold the stock.

“For investors who have received an IPO allotment, we would recommend holding on to the stock from a long-term perspective, subject to their individual risk profile. Those who have applied only for listing pop can book profit. Investors looking for a fresh entry may consider following a “Buy on Dips” strategy, rather than chasing the stock at elevated levels,” said Sunny Agrawal, Head of Fundamental Research at SBI Securities.

Investors who missed the IPO rally should avoid chasing the stock at elevated levels and may instead consider entering on declines, analysts said.

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

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