PhysicsWallah shares lose 8%
PhysicsWallah, which listed at a premium of over 33% at Rs 145 apiece on the NSE on November 18 and closed Day 1 at Rs 156.49, a 44% jump from its IPO price of Rs 109, gave up some of those gains on Wednesday. The stock fell nearly 8% to trade at Rs 142.85 apiece, erasing most of the trading days’ gains but still over 34% higher than the issue price.Shivani Nyati, Head of Wealth at Swastika Investmart, attributed the strong debut to investors’ belief in its “strong brand recall, affordable test preparation offering and fast-growing hybrid model through both online platforms and PW Pathshala centres.”
Nyati pointed to PhysicsWallah’s “loyal student base, scalable digital content engine, growing offline footprint and diversified presence in JEE, NEET, UPSC and state-level exams” but flagged competition, regulatory uncertainties and pressure on profitability as “key risks”.
On strategy, Nyati advised that strong retail demand at the IPO supported the rally, but added: “Allottees can book partial gains and hold the remaining shares for medium-term growth at SL Rs 130.”
Lenskart shares fall 4%
Lenskart, which made a weak debut on November 10, trading at a discount of almost 3% on BSE at Rs 390 and around 2% on NSE at Rs 395, had posted an 11% rise to Rs 438.85 on November 17. But the shares have cooled this week, falling over 1.5% on November 18 and another 4% on Wednesday to trade at Rs 409.10. per piece. It is now about 2% above its IPO price of Rs 402. Nyati said Lenskart’s strengths include its vertically integrated model, in-house manufacturing, aggressive store expansion and data-driven supply chain. Still, analysts are cautious about the meager margins at the company level, despite the fact that EBITDA margins at the store level are above 30%.Ambit Capital estimates the retail potential of around 5,000 outlets in India and noted: “The ability to gain market share in an unorganized market will improve productivity.” The broker said if Lenskart can improve operating leverage and stock vintage globally, a margin improvement of “450/465 in India and international operations in FY25-28E” is achievable.
Nyati said medium to long-term investors could hold the stock with a stop-loss near Rs 350, while short-term traders could consider booking out and looking for better setups.
Groww shares crash 10%
The sharpest turn came in Groww’s shares, which had risen almost 90% since listing before hitting a 10% lower circuit on Wednesday. But the deeper story unfolded behind the scenes: Traders who shorted the stock during the meteoric rise failed to deliver shares for settlement and were pushed to the National Stock Exchange’s auction window.
Investment advisor Abhijit Chokshi called it a “Rs 100 crore lesson on greed, speed and the settlement window,” warning that “GROWW shares have auctioned over 30 lakh units on NSE.” He said the spike in failed deliveries showed what happens when traders “sold stocks they didn’t own and took a bet that the stocks would fall. But they didn’t. And now the stock market is bluffing.”
Explaining the mechanics, Chokshi described the auction as “a penalty period for failed promises,” which is triggered when sellers cannot deliver the shares before T+1.
Nyati said Groww has made a steady debut and is supported by factors such as low customer acquisition costs, strong cross-selling from mutual funds to equities, a large number of monthly active users and consistent AUM growth. But she warned that increased valuations and regulatory shifts pose significant risks, suggesting investors are holding on to medium-to-long-term potential.
Prashanth Tapse of Mehta Equities echoed this view and said those who received shares should remain invested to benefit from Groww’s structural growth pipeline. He had earlier set a medium-term target of Rs 125-130, a level the stocks have already surpassed, and advised non-allocated investors to accumulate only after meaningful corrections.
Also read | Groww gives a Rs 100 crore lesson on greed. Abhijit Chokshi explains how
(Disclaimer: Recommendations, suggestions, views and opinions expressed by the experts are their own. These do not represent the views of the Economic Times)
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