Shares of SBI Funds Management made its debut on the exchanges today with a premium of 6.85% to its issue price on the NSE at Rs 613.30.
However, towards the end of the trading session, the stock experienced some profit booking to hit an intraday low of Rs 598.20 apiece and later closed 0.51% lower at Rs 610.15.
On the BSE, where it had listed with a 6.27% premium at Rs 610 per share, selling in the last hour pushed it marginally lower to settle at Rs 609.90 apiece.
However, the profit booking emerged due to uncertainty in the market texture and after the allottees made some good returns on the shares, according to Kranthi Bathini, Director of Equity Strategy at WealthMills Securities.
He further pointed out that the AMC has a long-term business model and that in India, the growth of assets under management for AMCs has been substantial in the past few years indicating further strength for SBI Funds.
Bathini emphasised SBI in itself is a strong brand with a solid network, and advised traders to buy the shares of SBI Funds on dips from a long-term perspective.
Harshal Dasani, Business Head, INVAsset PMS underlined that the sell option only makes sense for those who subscribed purely for listing gains, adding that allottees should hold the stock with a multi-year view, "because the investment case was never the listing pop, it is the compounding of the largest AUM franchise in the industry at 15.3% market share with a 43% return on net worth and the SIP penetration runway."
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Fresh buyers, he said, should not rush to mop up shares and instead wait for the stock to tread back towards the issue price levels of between Rs 545 and 574.
"The next genuine entry windows are the supply events ahead, the anchor lock-in expiry after thirty days and the first quarterly disclosure as a listed company, and any drift back toward the issue-price zone would reopen the discount that made the IPO attractive in the first place," Dasani stated.
He added that the last-hour profit booking showed day-one allottees harvesting the pop into the close, and reading that fade as a franchise verdict would be a mistake.
Avinash Singh, equity analyst at Emkay Global Financial Services also initiated coverage of the SBI Funds' stock with a 'buy' rating with the 12-month consensus price target implies of Rs 750 implying an upside of 23%.
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