Tips to save IPO listing gains tax!
In the years 2023 and 2024, many IPOs brought huge earnings for the investors. But tax also has to be paid on this! What is the tax rule on booking listing gains from IPO? How can tax liability on listing gains be reduced? How will the tax be calculated on selling IPO shares?
Shares of Sapphire Foods stood tall gave decent listing gains to investors on a day when benchmark indices are reeling under pressure. It opened for trading at Rs 1,350 on the NSE implying a premium of Rs 170 or 14.41% over its issue price of Rs 1,180 per share. On the BSE the company got listed at Rs 1,311. On an intraday basis, the stock hit a high of Rs 1,380.05 and a low of Rs 1,160 per share and was trading at Rs 1,234.75 apiece in noon trades.
Hold advice
With decent listing Santosh Meena of Swastika Investmart suggested long term investors to hold the stock as the business outlook is encouraging while short-term traders can keep a stop loss of Rs 1,100 for the near term target of Rs 1,500. “On the valuations front it is coming out with 7XFY21 sales while recently listed Devyani International is trading at 14XFY21 therefore it is coming out with attractive valuations compared to its peers and it has strong brand names under its umbrella,” Meena added.
Even Akhil Rathi of Marwadi Shares and Finance likes Sapphire Food’s strategy to reduce store size for KFC and Pizza Hut along with the expansion of new stores. The company has reduced menu prices to match with competitors’ shows revenue visibility and gives the OSR a substantial market presence and has scalable new restaurant economic model for expansion.
“Sapphire Foods India has a better revenue per store compared to Devyani International. On the EBITDA front, the company is continuously showing improvement. Considering the company’s business model and trading at discount compared to its peers,” said Amarjeet Maurya of Angel One.
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