S Chand gets muted listing

S Chand and Company, the swanky new kind on the block got listed on the BSE at Rs.700 as against its IPO price of Rs.670 shares. Compared to the blockbuster listing of its predecessors, D-Mart and more recently, Shankara Building, which got listed at Rs.555 v/s IPO price of Rs.460, this is a very muted listing of S Chand.

The issue was oversubscribed some 59 times and there was a lot of fancy around the IPO, given the fact that all were well aware of the brand equity of S Chand.

Though in our IPO Analysis, we had asked investors to give it a miss. We had said, “Companies from the education sector have rarely rewarded investors. Both MT Educare and Career Point drew a lot of investor fancy for their respective issues few years ago, but their fate is out in the open. Very recent issue of CL Educate in March this year also invoked lukewarm response, besides listing at 20% discount and still quoting 13% below IPO price. Thus, education sector has rarely had a good run on the bourses. To conclude, on expensive valuations, investors can give this IPO a miss.”

CL Educate is at Rs.440, below its IPO price of Rs.502; lets see how long S Chand sustains over its IPO price.