The Hindu Business Line : New listings: IT stocks still attract interest

Kolkata, Aug. 31 The market is playing favourites again, this time spawning a debate in the shape of realty-vs-IT in the universe of newly listed stocks.

While high-profile realty counters such as HDIL, IVR Prime Urban Developers and Puravankara Projects, all very recent IPO candidates, seem to have gone down in some measure in investors’ perception, the fortunes of a number of new listings from the IT space are on the upswing.

Market circles point towards stocks like Everonn Systems, which has gained considerable ground in recent times. The picture, they add, presents a contrast to what is depicted by the likes of HDIL, that is, stocks that are currently trading not far ahead of their issue prices.

New growth

A number of good performers among realty outfits notwithstanding, a section of investors is said to be warming more to IT companies these days, feel sources.

The reference is to the growth logged by some of these players such as Everonn Systems, which had an issue price of Rs 140 and is now trading at about Rs 632 (Friday’s close on NSE);Allied Digital, which issued shares at Rs 190 and has now moved to Rs 295 or so; and Zylog Systems, which issued at Rs 350 and currently trades at about Rs 428.

On the other hand, names such as IVR Prime and Puravankara Projects in the realty sector at the moment appear to be a little off-colour in comparison. The former, which fixed the issue price at Rs 550 (the price band was Rs 510-600), ended the day at Rs 374.60. The latter, which finally settled for a Rs 400-450 price band, closed at Rs 377.05.

Investor perception

The market sees the trend as a fallout of investors’ sentiments, especially as a function of the manner in which certain stocks are being viewed against others by the investing community.

“The key issue relates to valuations and the way investors perceive these at various points of time,” noted Mr Hitungshu Debnath, Director, Wealth Management Group, Motilal Oswal Securities, without referring to any specific instance. The market will ultimately recognise the merits of factors like earnings growth, he added.

If recent trends are any indication, the call of the market will continue to draw more service sector companies in the coming days, sources maintained. The reference is to the wide range of service providers that have lately raised capital – among these are technology, financial services, retail and healthcare. Many of the stocks have delivered handsome returns since listing.

Probable fund-raisers

While these sectors may well throw up other IPOs, the list of probable fund-raisers is expected to include companies operating in segments like hospitality, BPO and media.

Securities broking too will see a host of new arrivals, courtesy players such as Religare, Edelweiss and Anand Rathi, which have declared their intention on this front.

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