Western Carriers shares list at 1% discount. Should you hold or sell?

Western Carriers market listing: The company's stock opened at Rs 170 on the BSE, which is 1.16% below its issue price of Rs 172. On the NSE, the shares listed at Rs 171, down by Rs 1, or 0.6%.

In Short

• Western Carriers list at a discount on Dalal Street
• IPO was oversubscribed nearly 31 times
• Investors advised to hold shares, monitor performance

Western Carriers had a quiet debut on Dalal Street on Tuesday, with its shares listing at a slight discount.

The company's stock opened at Rs 170 on the BSE, which is 1.16% below its issue price of Rs 172. On the NSE, the shares listed at Rs 171, down by Rs 1, or 0.6%.

Despite the lower-than-expected listing, the company's initial public offering (IPO) attracted significant interest from investors. The IPO was oversubscribed nearly 31 times, with strong demand coming mainly from non-institutional investors.

The company plans to use the money raised from the IPO to repay debt and finance capital expenditures. This includes the purchase of commercial vehicles, containers, and reach stackers. Any remaining funds will go towards general corporate purposes.

Should you hold or sell?

Shivani Nyati, Head of Wealth at Swastika Investmart Ltd, commented on the company's market entry, and said that Western Carriers had a somewhat subdued listing, with the stock starting at Rs 171 per share, very close to its issue price.

"Western Carriers (India) Limited is a multi-modal, rail-focused, 4PL asset-light logistics company. Although the company has shown slow but steady financial growth, it faces challenges such as long payment cycles and operational risks," Nyati said.

She pointed out that the absence of a listing premium indicates that investors are cautious about the stock.

"Those who invested in the IPO may want to hold onto their shares, while keeping a close eye on the company’s performance and market trends. Short-term traders might consider holding with a stop-loss around Rs 155-160, while others may prefer to hold for the long term," Nyati added.

Western Carriers runs an extensive logistics network across India, with more than 50 branch offices and four zonal offices spread across 23 states.

The company also manages 16 warehouses in 12 states and operates at over 55 major public rake handling points. This allows them to provide seamless first-mile and last-mile connectivity to their clients, which come from various sectors like metals, FMCG, pharmaceuticals, chemicals, and oil & gas.

As of March 31, 2024, the company boasted a strong client base of 1,647, which includes prominent names like Tata Steel, Hindalco Industries, Hindustan Unilever Ltd (HUL), and DHL.

In terms of financial performance, Western Carriers saw its consolidated revenue from operations rise by 4% in FY24 to Rs 1,686 crore. Profit after tax increased by 12%, reaching Rs 80.3 crore in the same period.

(Disclaimer: The views, opinions, recommendations, and suggestions expressed by experts/brokerages in this article are their own and do not reflect the views of the India Today Group. It is advisable to consult a qualified broker or financial advisor before making any actual investment or trading choices.)