Northern Arc, Western Carriers and Arkade Developers Lose Up to 13% After Listing; Here’s What Investors Can Do

Shares of Northern Arc Capital Ltd, Western Carriers (India) Ltd and Arkade Developers Ltd fell in the first trading session on Tuesday after their listing. After a decent initial showing, Northern Arc’s stock fell 12.21 per cent from its day’s high of Rs 351 to hit a low of Rs 308.15. Despite the mentioned decline, it was still up 17.17 per cent from its initial public offering (IPO) price of Rs 263.

Some analysts have suggested that investors may consider taking profits. “Northern Arc, which offers retail loans to underserved households and businesses, made a strong debut at Rs 351 per share, a substantial 33% premium to its issue price of Rs 263. The company has been growing its earnings, negative cash flow and high debt-to-equity ratio are areas of concern. Investors may consider taking some of their profits here, and those who want to hold it for the long term can keep a stop loss on the issue price,” said Shivani Nyati, head of wealth management at Swastika Investmart.

Prathamesh P Masdekar, research analyst at StoxBox, also recommended taking profits. “Investors who have been allotted shares are advised to take profits and exit their positions for now. We will reassess our recommendation if the company’s financials show signs of improvement going forward,” Masdekar said.

In case of Western Carriers, the stock hit a high of Rs 177 after listing at a 1% discount at Rs 170 against its issue price of Rs 172. The last time it was checked, it was down 8.14% from the day’s high mentioned to a low of Rs 162.60.

Analysts believe that market participants can hold their positions. “Western Carriers has had a modest start. The company has shown slow but steady financial growth with a positive trajectory. The company faces a long payout cycle and is exposed to several operational risks. Despite a good subscription of 31 times, the absence of listing premium indicates a cautious approach by investors. Investors who participated in the IPO can consider holding their shares while closely monitoring the company’s performance and market conditions. Short term traders can hold their shares with the stop loss of Rs 155-160 and others can hold them for the long term,” said Shivani Nyati of Swastika Investmart.

“The company is well positioned for sustained growth. Despite the initial discounted listing, we remain bullish on Western Carriers and recommend investors to hold the stock with a medium to long term perspective,” said Akriti Mehrotra, Research Analyst at Stoxbox.

On the other hand, Arkade Developers also had a strong debut like Northern Arc, listing at a premium of 37.42 per cent at Rs 175.90 over its issue price of Rs 128. The stock later hit a new high of Rs 190. Later, it fell 12.97 per cent from the day’s high to hit a low of Rs 165.35.

According to an analyst, investors may consider taking some of their profits out of this deal. “Overall, Arkade Developers Limited has made a strong debut to the listing, reflecting investors’ confidence in the company’s growth potential and financial stability. Investors may consider booking some of their profits here, and those who want to hold it for the long term may keep a stop loss on the issue price,” said Nyati of Swastika.

“Those who have been allotted shares are advised to take profits and exit their positions for now. We will reassess our recommendation if the company’s financials show signs of improvement going forward,” said Sagar Shetty, Research Analyst at StoxBox.