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 totrade an item from both sides i.e. buy and sell and at the same price. Now, when sellers are relatively lesser as compared to thebuyers at some price level, then the buyers will increase their bids higher to encouragesellers to part with their shares. This causes the price to rise.
Further, to prevent excessively wild speculations, exchangesall over the world limit the upper and lower price in a given trading day ofmost items. Now, for Nureca, the buyers were so anxious that they keptbidding up the price and finally the price hit the upper circuit or band. It must be noted that any person holding the stock may sellat the market price even if the stock is at upper circuit.
However, no one seems to be willing to part with theirshares of Nureca. The stock had already listed with a premium of 58.7% on theBSE (formerly Bombay Stock Exchange). At the time of writing, the stock was hovering around the uppercircuit with the volume being 0.93 lakh shares in BSE and 2.05 lakh shares inNSE.
Moneycontrol was advised by Astha Jain, Senior ResearchAnalyst at Hem Securities, "We advise investors to book partial profit onthe listing day, if the stock will be available on a 20 percent premium. Werecommend wait before making new buying on listing day and hold remaining stockfor the long term as the home health market in India and neighbouring countriesis expected to grow at a CAGR 11.0 percent by 2025, therefore the company'sbusiness will expected to have advantage from such growth."
Prashanth Tapse, AVP Research at Mehta Equities advisedinvestors to book profits since valuations make him think twice about holdingthis stock. However, he went on to say, "Only high-risk long-terminvestors may hold Nureca post-listing, while if you are a retail investorlooking for a decent return on investment (ROI) better to book profits and lookfor better opportunities."