Shares of Park Medi World are rising more than 6% after a discounted listing. Should you buy now?

The stock rebounded strongly on Wednesday, rising as much as 6.5% to hit an intraday high of Rs 165.75 on the BSE, compared to the listing price of Rs 155.50 on the BSE.The stock recorded a muted trading on the stock exchanges, opening at Rs 155.60 on the BSE and Rs 158.80 on the NSE, both below the issue price of Rs 162.

The listing discount of up to 4% marked a cautious start for the hospital and healthcare-focused company, despite broader market support.At the IPO, the shares were priced at the higher end of the price range, valuing the company at nearly Rs 7,000 crore.

However, the weak debut failed to deter a recovery, with the stock surpassing its issue price. The recovery in the counter signals renewed interest among investors, possibly driven by the company’s long-term prospects.

What should investors do now?

Commenting on the post-listing performance, Shivani Nyati, Head of Wealth at Swastika Investmart, said: “Park Medi World had a subdued debut, indicating cautious investor sentiment. However, the company’s presence in the Tier-2 and Tier-3 healthcare markets, focus on affordable medical services and planned deleveraging make it a promising player in healthcare.”

Read more: Park Medi World stock list with 4% discount on IPO price on exchanges

Proceeds from the IPO will be used to repay debt, which is expected to make the company net cash positive and generate annual interest savings of Rs 15 crore. Additional funds will be spent on medical equipment investments and general corporate purposes.

While acknowledging the weak start, Nyati believes long-term performance will depend on the company’s ability to improve operational efficiencies, increase return ratios and expand hospital occupancy.

She advised investors and traders to hold the stock from a medium to long term perspective while maintaining a stop-loss below Rs 145.

The IPO received a total of 8.52 subscriptions, with non-institutional investors leading the way. The NII share was subscribed almost sixteen times, while qualified institutional buyers bid for more than twelve times the number of shares on offer. Retail participation was relatively muted at 3.32 times, reflecting a selective approach to smaller investors amid a busy IPO calendar.

Also read: Akzo Nobel shares plunge 15% as Imperial Chemical likely to lose 48.8 lakh shares in a block deal

(Disclaimer: Recommendations, suggestions, views and opinions of experts are their own. These do not represent the views of The Economic Times.)