DAM Capital, Mamata Machinery tank 11% after listing gains of up to 147%

Shares DAM Capital Advisors slipped 11% to Rs 371.30 and Mamata Machinery locked in 5% lower circuit of Rs 598.50 on the BSE in intra-day trade.

Shares of recently listed companies DAM Capital Advisors and Mamata Machinery have tanked by up to 11 per cent on the BSE in Monday’s intra-day trade after making strong market debut last week.

 

Shares of DAM Capital slipped 11 per cent to Rs 371.30 in intra-day trade today. With today’s decline, the market price of stock broking & allied services company has plunged 19 per cent from its high of Rs 456.90 hit on listing day i.e. Friday, December 27.

 

DAM Capital had made a bumper debut on the bourses, with its shares listing at Rs 392.90, a 39 per cent premium against the issue price of Rs 283. Post listing, the stock has moved higher to Rs 456.90, 61 per cent higher over its issue price.

 

 

DAM Capital is a leading investment bank in India, offering a comprehensive range of financial services. These include investment banking solutions such as equity capital markets (ECM), mergers and acquisitions (M&A), private equity (PE), and structured finance advisory. The company also provides institutional equities services, including broking and research.

 

A significant portion of DAM Capital's revenue is closely tied to the performance of the Indian equity capital markets. Key factors such as trading volumes, interest rates, liquidity, the regulatory environment, and the overall efficiency and transparency of the markets play a crucial role in sustaining the company's growth. For example, fluctuations in market activity can directly affect the value of clients' portfolios and their trading and investment behaviours, which, in turn, influence the brokerage fees and commissions earned by the company.

 

DAM Capital is one of the leading merchant banks in India, with business operations also spanning institutional equities. The majority of its revenue comes from Merchant Banking, primarily through advisory fees, which accounted for 54.1 per cent of the company’s total revenue for the six months ending September 30, 2024. Additionally, 39.5 per cent of its revenue comes from broking activities. In FY24, DAM Capital held a 12.1 per cent market share based on the number of initial public offering (IPOs) and qualified institutional placements (QIPs) it managed as a lead manager.

 

The Indian capital market has experienced strong growth in FY24 compared to FY23, with the number of issues rising from 234 in FY23 to 316 in FY24. This has also positively reflected in the company’s top and bottom line. Looking ahead, the favorable outlook for capital markets, increased investor participation, and India’s status as one of the fastest-growing economies are expected to benefit the company in long run. However, the high valuation being demanded raises concerns, Choice Equity Broking said in IPO note.

 

Meanwhile, shares of Mamata Machinery were locked in lower circuit of 5 per cent at Rs 598.50 on the BSE at 02:34 pm; with no buyers seen on the counter. A combined 1.3 million equity shares changed hands and there are pending sell orders for 1.2 million shares on the NSE and BSE. 

 

The company's shares had made a stellar debut on D-Street on Friday, December 27, 2024. Mamata Machinery shares listed at Rs 600, a 147 per cent premium over the issue price of Rs 243. Post listing, it has zoomed 167 per cent against its issue price. 

 

Following the listing, Shivani Nyati, Head of Wealth at Swastika Investmart, said the company's strong global presence, including a manufacturing unit in the US, and its consistent growth in revenue and profit underscore its robust fundamentals.  "Those who took part in the IPO may book part-profit and choose to hold onto their shares while keeping a careful eye on the company's performance and the state of the market, as well as maintaining a stop-loss at Rs 550," Nyati added.

 

Mamata Machinery manufactures and exports machines for plastic bag making, packaging, and extrusion equipment. The company is primarily sell its packaging machinery to direct consumer brands catering to the FMCG, Food, & Beverage Industry and bag and pouch making machines to convertors and service providers. Its machineries are also utilised in non-packaging applications, such as e-commerce bags and garment packaging bags.

 

The Indian packaging machinery sector is undergoing significant growth, driven by increased demand from diverse industries and advancements in technology. Packaging machinery is the backbone of modern packaging, ensuring efficiency, productivity, and the delivery of high- quality packaging solutions. With the rapid growth of industries in India, the demand for innovative and reliable packaging solutions has surged.

 

Mamata Machinery is specialises in the manufacturing and export of plastic bag and pouch making machines, packaging machines, and extrusion equipment. Offering comprehensive manufacturing solutions for the packaging industry, company’s produced products are used across various sectors, including the packaging of food and FMCG items.

 

The company has shown consistent performance over the years, with growing number of machines sold both in India and internationally, leading to a steady improvement in margins. Looking ahead, Choice Equity Broking believe Mamata Machinery has strong long-term growth potential by expanding its presence in regions such as Europe, Africa, and the Middle East, which will further increase its customer base.