Paras Raksha Shares made a grand debut on the stock exchanges last week after receiving huge investor interest for their initial public offering (IPO), which was subscribed 304.26 times. The stock, which hit the 5% upper circuit today, has risen more than 26% in the past five days.
Stock as of October 1. listed on ₹469 per share on NSE, around 170% premium over its IPO issue price ₹175. Paras Defense shares are currently trading around ₹606 each on BSE.
“After the Stellar listing, the company saw huge demand, and the share price of Paras Defense is locked in the upper circuit with a massive return of 29%. Given the strong order book, diversified product portfolio and strong customer relationship, the company is poised to perform exceptionally well in the years to come. The company operates in a niche segment which has high entry barriers,” said Santosh Meena, Head of Research, Swastika Investmart Ltd.
Paras Defense is engaged in the design, development, manufacturing and testing of a wide range of Defense and Space Engineering products and solutions. The proceeds of the fresh issue are said to be used to meet capital expenditure requirements, meet growing working capital requirements and for repayment or prepayment of loans taken by the company.
Meena said the fundamentals of the company are strong where one should continue investing for the long term. He further suggested that new investors should wait for the fall and then build their positions accordingly ₹500 levels.
The business of Paras Defense is heavily dependent on projects and programs that are undertaken by the central government and affiliated entities, such as defense public sector undertakings and government organizations involved in space research. Its IPO included a new issue till ₹140.6 crore and offer for sale (OFS) of 17,24,490 equity shares. The price limit for the initial share sale was fixed ₹165-175 per.
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