Stallion India Stock Hits Upper Circuit Post Solid Debut: Should You Buy, Sell or Hold?

Shares of Stallion India Fluorochemicals made a stellar debut on Dalal Street on Thursday, January 23. The company’s shares listed at Rs 120 on both the exchanges, BSE and NSE, reflecting a premium of 33% over the IPO issue price of Rs 90.

However, the listing was below grey market premium (GMP) estimates as the shares were trading in the unlisted markets ahead of the debut at a premium of around 40%.

The shares were locked in the 5% upper circuit in January 23 trade, shortly after listing over 33% premium on the National Stock Exchange (NSE). The stock was up 5% to hit the upper price band limit of the day at Rs 126 per share on the NSE.

Stallion India’s initial public offering (IPO) opened for subscription on January 16 to raise Rs 199.45 crore from the capital markets on a price band of Rs 85-90 per share. Despite high market volatility, the issue received a solid response from investors with a whopping 188.38 times subscription across all categories.

The quota reserved for the NII category was subscribed 422 times, while the QIB portion was booked 172 times. The retail investors' quota was subscribed 96 times.

Stallion India Fluorochemicals - Should you buy, sell or hold?

Prashanth Tapse, Senior VP (Research) at Mehta Equities, recommended that investors consider booking profits above their expectations on the listing day. He also advised non-allotted investors to adopt a "wait and watch" approach, as short-term volatility could be anticipated post-listing.

“On valuation, at the upper price band, the company was fairly and reasonably priced based on annualized earnings. Therefore, we believe the company has significant potential for healthy business growth, driven by industry tailwinds and scalability,” he added.

Prathamesh Masdekar, Research Analyst at Stoxbox, recommends that investors who have been allotted shares consider holding their positions for the medium to long term. Stallion India Fluorochemicals has carved a niche in the refrigerant and industrial gases segment with high-quality, cost-effective products.

The company's focus on quality control, supply chain excellence, and expansion into new domestic markets positions it well for growth. By prioritizing high-margin products and expanding its customer base, Stallion aims to improve earnings and increase cash flow, he added.

Shivani Nyati, Head of Wealth at Swastika Investmart said that the company has strong market recognition and a track record of solid financial performance.

“Those who participated in the initial public offering (IPO) may consider booking partial profits and holding with a stop-loss of Rs 105,” she added.

The company aims to utilise the net proceeds from the fresh issue towards funding incremental working capital requirements, funding capital expenditure for semiconductor & specialty gas debulking and blending facility in Khalapur, Maharashtra, funding capital requirements for refrigerant debulking and blending facility in Mambattu, Andhra Pradesh and for general corporate purposes.

About the company

Incorporated in 2002, Mumbai-based Stallion, India Fluorochemicals is engaged in the business of selling refrigerants, industrial gases and related products. Its primary business includes debulking, blending and processing refrigerant and industrial gases and selling of pre-filled cans and small cylinders/containers.

In FY24, the company’s revenue from operations rose marginally to Rs 233 crore, while profit after tax (PAT) also jumped 51% year-on-year to Rs 148 crore. It generates the majority of its revenue from the refrigerant segment, which accounts for over 85% of the total revenue as of the end of Q2FY25.

The company operates in a highly competitive landscape and competes with existing players, including SRF Limited, Gujarat Fluorochemicals Limited, and Navin Fluorine International Limited.

(Disclaimer: The views and recommendations expressed in this article are those of the individual analysts. We advise investors to consult with certified financial advisors before making any investment decisions.)