66% listing gains in Nureca IPO – what to do now?

Near the market opening, the stock was locked in upper circuit

Nureca IPO Listing-Gains

On February 25, 2021 the recent IPO (Initial Public Offering) of Nureca was locked in upper circuit.

Explanation: To trade there were must be people willing to trade an item from both sides i.e. buy and sell and at the same price. Now, when sellers are relatively lesser as compared to the buyers at some price level, then the buyers will increase their bids higher to encourage sellers to part with their shares. This causes the price to rise.

Further, to prevent excessively wild speculations, exchanges all over the world limit the upper and lower price in a given trading day of most items. Now, for Nureca, the buyers were so anxious that they kept bidding up the price and finally the price hit the upper circuit or band. It must be noted that any person holding the stock may sell at the market price even if the stock is at upper circuit.

However, no one seems to be willing to part with their shares of Nureca. The stock had already listed with a premium of 58.7% on the BSE (formerly Bombay Stock Exchange). At the time of writing, the stock was hovering around the upper circuit with the volume being 0.93 lakh shares in BSE and 2.05 lakh shares in NSE.

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Moneycontrol was advised by Astha Jain, Senior Research Analyst at Hem Securities, "We advise investors to book partial profit on the listing day, if the stock will be available on a 20 percent premium. We recommend wait before making new buying on listing day and hold remaining stock for the long term as the home health market in India and neighbouring countries is expected to grow at a CAGR 11.0 percent by 2025, therefore the company's business will expected to have advantage from such growth."

Prashanth Tapse, AVP Research at Mehta Equities advised investors to book profits since valuations make him think twice about holding this stock. However, he went on to say, "Only high-risk long-term investors may hold Nureca post-listing, while if you are a retail investor looking for a decent return on investment (ROI) better to book profits and look for better opportunities." 


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