Gem Aromatics lists at 2.5% premium; Anil Singhvi suggests short-term investors do this

Gem Aromatics IPO Listing: Gem Aromatics shares entered the listed space on Tuesday, beginning their secondary market journey at Rs 325 and Rs 333.1 apiece on BSE and NSE, respectively. While the debut on BSE was on a flat note, at no premium or discount, the listing on NSE marked a premium of 2.5 per cent over the issue price.

The Mumbai-based company’s initial public offer concluded last Thursday with a total subscription of 30.3 times.

Zee Business Managing Editor Anil Singhvi had found the IPO to be reasonably priced, suggesting risk-taking investors apply for a small listing gain.

Gem Aormatics listing misses market guru Anil Singhvi’s expectations 

The market wizard had expected Gem Aromatics shares to list in the range of Rs 345-355.

This translates to a premium of 6-9 per cent over the upper end of the issue price range. 

Singhvi had advised risk-taking investors to apply for the IPO for a small listing gain. 

What to do now? Anil Singhvi has the answer

Short-term investors can keep holding the stock with a trailing stop loss at Rs 340.

Here are other key things to know about Gem Aromatics:

EDITOR’S TAKE | Here’s how market guru Anil Singhvi views Gem Aromatics

Singhvi has identified the following key points about the company:

Positive:

• The company’s promoters are experienced and qualified 

• The company has a Diversified product portfolio 

• It commands a strong customer base in the domestic as well as foreign markets

Negative: 

• The company’s business is seasonal; this requires it to have huge amounts of working capital 

• The company has seen an increase in its short- and long-term borrowings

• In FY25, the company had a negative cashflow 

ALSO READ: Gem Aromatics IPO subscribed 30.45 times; allotment likely today, listing on August 26

Gem Aromatics IPO

The IPO — comprising fresh issuance worth Rs 175 crore and an offer for sale (OFS) worth Rs 276 crore — was open for subscription from August 19 to August 21.

According to provisional exchange data, the portions set aside for QIBs and NIIs were booked 55.3 and 45.1 times, respectively.

The portion reserved for retail investors saw a subscription of 10.3 times the equity on offer, according to the data.