On Monday, Morgan Stanley sold more than 7.58 lakh shares of Ajax Engineering, valued at approximately Rs 45 crore, during the company’s stock market debut. The shares were offloaded through a block deal, with each share priced at Rs 588.74. The transaction was executed by the Morgan Stanley IFSC Fund, marking a significant move in the early stages of Ajax Engineering’s presence in the market.
Ajax Engineering made its stock market debut today, listing at a discount of 8.4% on the exchanges. On the National Stock Exchange (NSE), the stock opened at Rs 576, while on the Bombay Stock Exchange (BSE), it debuted at Rs 593, reflecting a 5.7% discount compared to the issue price of Rs 629.
Despite the initial decline, Ajax Engineering’s shares showed positive momentum by the end of the trading day. On the NSE, the stock closed at Rs 593.40, marking a 3% increase from its listing price. On the BSE, the stock finished at Rs 595.60, gaining 0.44% over its debut price.
Prashanth Tapse, Senior Vice President of Research at Mehta Equities, commented on Ajax Engineering’s stock listing, noting that the debut fell short of market expectations, which had anticipated a flat listing given the current market volatility. He pointed out that despite the weaker opening, there is still optimism surrounding the company due to its strong position in the SLCM (Supply Chain Management) sector and its virtual monopoly in this field. Additionally, Tapse highlighted the growing demand for automated concrete solutions, driven by the increasing infrastructure development in India. He believes that Ajax Engineering is well-positioned to benefit from the expanding construction and infrastructure sectors in the country. Considering the company’s long-term prospects, Tapse advised investors to hold onto their shares for the long run.
In light of the current market conditions, some experts suggest that investors looking to accumulate shares during a dip should take a cautious approach and wait for more favorable prices. Given the ongoing market scenario, it may be wise to observe further movements before making any decisions.
The initial public offering (IPO) of Ajax Engineering, which closed last week, received a strong response from investors, with overall subscription levels reaching six times the offered shares. Institutional investors showed significant interest, with their subscription rate at an impressive 13 times, while non-institutional investors followed closely with a subscription rate of six times.
Since Ajax Engineering’s initial public offering (IPO) was entirely an offer for sale (OFS), the company itself will not receive any of the proceeds from the sale of shares. The IPO was priced with a price-to-earnings (P/E) ratio of 32.1x, based on the company’s projected earnings for FY24 at the upper end of the price band. According to analysts, this valuation is considered relatively lower compared to the P/E ratios of other companies in the same industry, suggesting that Ajax Engineering’s pricing is more modest in comparison.