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Economic Times

Shanti Gold International shares rise 5% on trading debut. What should investors do?

Shanti Gold International listed at a 14-15% premium on Friday, slightly below grey market expectations. Shares rose up to 5% intraday, offering modest IPO gains. Analysts highlighted strong fundamentals and growth, but cautioned about stretched valuations and sector risks. Experts suggest long-term investors adopt a staggered approach post-listing, while traders may have already realised most of the short-term upside. Tired of too many ads? Remove Ads Listing pop underwhelms grey market buzz Tired of too many ads? Remove Ads What should investors do? Tired of too many ads? Remove Ads Shares of Shanti Gold International advanced as much as 5% on their stock market debut on Friday, delivering modest gains to IPO investors but falling short of pre-listing expectations, prompting market participants to weigh whether the rally has further room to Mumbai-based 22kt CZ casting gold jewellery maker opened at Rs 229.10 on BSE, a 15% premium to its issue price of Rs 199, and at Rs 227.55 on NSE, reflecting a debut-day pop of 14.35%. The stock climbed as high as Rs 238.40 on BSE and Rs 238.36 on NSE, translating to an intraday gain of around 4.8% on the NSE and 4.1% on the the listing was in positive territory, it trailed the grey market's expectations of a 17% premium. In the unofficial grey market ahead of its listing, Shanti Gold shares were commanding a grey market premium of around Rs 34 per share, higher than the actual premium seen on the first day of Rs 360.1 crore IPO, which ran from July 25 to 29, was entirely a fresh issue, with no offer-for-sale component, priced in a fixed band of Rs 189-199 per share. Ahead of the main offer, Shanti Gold raised Rs 108.03 crore from 15 anchor investors, including Societe Generale, Wealthwave Capital Fund, and Swyom India Alpha company plans to deploy Rs 46.3 crore from the proceeds to set up a new manufacturing facility in Jaipur, Rs 200 crore towards working capital, Rs 17 crore for debt repayment, and the remainder for general corporate Gold currently operates with an annual installed capacity of 2,700 kg and has seen strong financial traction. Its FY25 revenue rose 55.5% year-on-year to Rs 1,106.41 crore, while profit after tax more than doubled to Rs 56 crore from Rs 27 crore in on the listing, Sourav Choudhary, Managing Director at Raghunath Capital, said the debut was 'broadly in line with market expectations, with a 14-15% premium over its issue price, reflecting the strength of its fundamentals, yet tempered by near-term valuation constraints.'The company's rapid revenue growth and margin improvement over FY24-25 are 'encouraging signs of execution strength in an otherwise fragmented and price-sensitive jewellery industry,' he highlighted Shanti Gold's fully integrated manufacturing model and CAD-driven design capabilities as key factors that give it a strategic edge in the B2B export market. However, he also flagged several risks, including the firm's dependence on a single production facility in Mumbai, gold price volatility, and a 'stretched IPO valuation at ~25.7x FY25 earnings.''As institutional investors, our positioning would be calibrated: we'd prefer accumulating at or below IPO levels if broader markets correct,' Choudhary said. 'The planned Jaipur expansion and formalisation of India's gold trade could offer structural tailwinds in the coming 2–3 years.'Choudhary concluded, 'Shanti Gold is a fundamentally solid company in a cyclical sector. Long-term investors with moderate risk appetite may consider staggered exposure post-listing volatility. Tactical traders may already have seen most of the listing gains priced in.'As the post-listing dust settles, investors are expected to monitor the company's Jaipur expansion plans, gold price trends, and its ability to sustain margins in a competitive market. For now, the stock's future trajectory may hinge more on long-term execution than on immediate upside.