Pranav Constructions shares hit 20% lower circuit post strong market debut; here’s a stop-loss for IPO…

Fresh updates from the financial markets indicate that Pranav Constructions shares hit the 20 percent softer circuit limit on Tuesday after a firm market debut earlier in the day, amid earnings booking at elevated marks.

Shares of the firm quoted at Rs 132 per share on the NSE, hitting the lowest permissible trading limit of the day.

Market watchers attributed the sharp slide to high volatility after sharp early upside.

"Pranav Constructions made a firm debut at 33 percent premium to its offering price, but the sharp correction from the highs indicates earnings booking and high volatility," stated Shivani Nyati, Head of Wealth at Swastika Investmart Ltd.

Shares of real estate developer Pranav Constructions listed at a firm premium of 33 percent against the offering price of Rs 124.

The stock started trading at Rs 162 on the BSE, registering a jump of 30.64 percent from the offering price. At the NSE, the stock listed at Rs 165, a premium of 33 percent.

The firm's market valuation stood at Rs 1,493.38 crore at the time of stock-exchange debut on the BSE. It declined to Rs 1,459.59 crore after the stock hit the softer circuit, a decline of Rs 33.79 crore.

"The firm’s firm presence in Mumbai’s Western Suburbs, healthy expansion and reasonable IPO valuation stay positives, but after the sharp stock-exchange debut upside, market participants should avoid chasing the stock at elevated marks. Existing market participants can hold with a stop loss of Rs 130-132, while fresh market participants can wait for the stock to stabilise before taking a position," Nyati further noted.

Pranav Constructions' Rs 351-crore IPO was subscribed 121 times on the final day of bidding on Wednesday last week.

The firm's IPO was open for subscription from September 7-9 with a price range of Rs 118-124 per equity share.

Pranav Constructions had boosted Rs 84.24 crore from anchor market participants.

The firm is a real estate developer focused on the Municipal Corporation of Greater Mumbai redevelopment segment in Mumbai's western suburbs.