Western Carriers (India) Ltd is set to make its debut on the stock exchanges. The company’s initial public offering (IPO) has garnered significant attention, with a subscription rate of approximately 30.57 times, indicating strong investor interest. This article delves into the current share price performance, expectations for the trading day, and crucial price levels to watch.
Main Points
Current Market Context
Western Carriers’ shares are expected to list at a slight premium based on the grey market premium (GMP). As of today, the GMP for Western Carriers stands at ₹21, down from ₹52 just a few days ago. This decline in the GMP suggests a more cautious sentiment among investors leading up to the listing. Despite this, analysts predict that the shares could open around ₹172, which is the upper end of the IPO price band set between ₹163 and ₹172 per share.
Performance Overview
The company’s IPO was well-received, with bids exceeding 63.78 crore shares against an offer of just 2.08 crore shares. This overwhelming response was particularly driven by non-institutional investors, who subscribed their portion nearly 44.71 times. Retail investors also showed robust interest, with a subscription rate of about 25.95 times.
Key Financial Metrics:
- Market Capitalization: Approximately ₹1,754 crore.
- P/E Ratio: 21.8.
- Return on Equity (ROE): 22.4%.
- Profit After Tax (PAT) for FY24: ₹803.47 million.
- Revenue Growth: From ₹16,330.63 million in FY23 to an expected ₹16,857.69 million in FY24.
Trading Expectations
Investors are keenly watching how Western Carriers will perform on its first trading day. The stock is anticipated to open at a premium due to high demand during the IPO phase. However, the recent drop in GMP could indicate some volatility in early trading sessions.
Important Levels to Monitor:
- Support Level: Traders should watch for support around ₹163, which is the lower end of the IPO price band.
- Resistance Level: A key resistance level may be established around ₹180 if the stock opens strongly and gains momentum in early trading.
Market Sentiment and Future Outlook
The logistics sector in India is poised for growth, projected to expand at a compound annual growth rate (CAGR) of 11%, reaching ₹30 trillion by fiscal year 2027. This growth is fueled by increasing domestic demand and government initiatives aimed at boosting manufacturing and logistics capabilities across the country.
Western Carriers has positioned itself well within this expanding market by enhancing its operational capacity and reducing debt reliance. The company plans to utilize funds from its IPO primarily for repaying existing borrowings and investing in new commercial vehicles and containers.
