STREET SIGNS
Hotels stocks on investors’ radar
With Covid-19 related restrictions easing in almost all states, savvy investors have begun accumulating hotel stocks. Increase in occupancy rate and surge in air travel are being seen as key positive triggers. Shares of Indian Hotel have rallied nearly 30 per cent in the past one month, while EIH has gained 20 per cent, Lemon Tree Hotels has been an underperformer with just 6 per cent gain. “Next few months are expected to be good for the hotel sector. Also, Oyo’s IPO filing could act as a positive trigger for the sector. High-risk investors can look to buy hotel shares even at current levels,” said an analyst.
Aditya Birla MF GMP at 10%
Shares of Aditya Birla Sun Life Asset Management Company are changing hands at a premium of 7-10 per cent in the grey market ahead of its IPO. The IPO opens on Wednesday. The price band for the issue is ~695-712 per share. At the upper band, the issue size would be ~2,768. The Aditya Birla group firm is eyeing valuations of ~20,500 crore in the IPO. “While the pricing is at a discount to larger peer HDFC AMC, it is still fairly priced, given the other dynamics. As a result, the stock may not see a huge listing day pop. However, given the brand and growth potential, investors with a long-term investment horizon should subscribe,” said an analyst.
HNIS overboard on Paras Defence?
High net-worth individuals (HNIS) have bid aggressively in the initial public offering (IPO) of Paras Defence and Space Technologies. Last week, the IPO garnered 318 times subscription — making it the most-subscribed IPO ever. The HNI portion of the issue was subscribed 974 times with bids of nearly ~25,000 crore. The cost of acquisition of one share for HNI works out over ~250 per share. Paras Defence’s IPO price is ~175 per share. Its stock has to gain as much as 2.4 times on listing day for HNIS to break even. The grey market premium suggests that the stock could go up 2.5 times on listing. However, any change in market sentiment ahead of listing could change the equation.