Platinum Industries has a promising start. Should I hold onto my profits or sell them

Platinum Industries made a remarkable entry into the stock market on Tuesday, March 5, as its shares debuted with a substantial premium of 35 percent over the IPO price.

The stock commenced trading at Rs 225 on the National Stock Exchange (NSE), comfortably surpassing the issue price of Rs 171.

As per the latest updates, the share prices of Platinum Industries currently stand at Rs 227 (reflecting a 32.43 percent increase) on the Bombay Stock Exchange (BSE) and Rs 226.45 (showing a 32.75 percent increase) on the NSE.

The IPO, which successfully raised Rs 235.32 crore, garnered significant interest from investors throughout its subscription period from February 27 to 29.

In terms of the decision to sell or hold the stock, while the listing at a premium of 35 percent is perceived as a favorable indication, it fell slightly short of certain pre-listing expectations that had anticipated a higher gain. Nonetheless, industry experts view the 33 percent premium as a reflection of investor confidence in the robust fundamentals of Platinum Industries.

Shivani Nyati, Head of Wealth at Swastika Investment Ltd, advised that investors seeking short-term gains might contemplate exiting their holdings. Conversely, those with a long-term perspective should consider holding onto their shares, with a recommended stop loss set at Rs 210.

Platinum Industries witnessed an impressive subscription rate of 99.03 times, with qualified institutional buyers oversubscribing by 151 times, non-institutional investors by 141.83 times, and retail investors by 50.99 times.

As a leading manufacturer of specialty chemicals, Platinum Industries offered a fresh issue of 1.37 crore shares within a price band of Rs 162-171 per share. The company specializes in the production of PVC stabilizers, CPVC additives, and lubricants.

The proceeds from the IPO are intended primarily for expanding the company's manufacturing facilities. Approximately Rs 67.72 crore will be allocated towards establishing a manufacturing unit for PVC stabilizers for its subsidiary, Platinum Stabilizers Egypt LLC. Additionally, Rs 71.26 crore will be directed towards setting up a manufacturing facility in Palghar, Maharashtra, while Rs 30 crore will be utilized to meet working capital requirements.

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