Tribhovandas Bhimji Zaveri (TBZ) came out with its IPO in April 2012 at the price of Rs. 126 per share. The IPO met with lukewarm response from the investors and drifted aimlessly for quite some time. The stock was completely out of favour and slumped to an all-time low of Rs. 88 on 16th August 2012.
That was the turning point for TBZ and there was has been no looking back since then. It has been on a steady upward march and has been regularly breaching the upper circuit levels. It touched its all-time high of Rs. 276.05 on Friday, 23rd November 2012.
What seems to have captured the market’s attention is the news that Tribhovandas Bhimji Zaveri will invest about Rs 1,200 crore in the next three years for opening 43 showrooms across the country. At present, TBZ has 18 showrooms across 11 cities, including metros as well as Tier-1 and Tier-2 cities. The news of the expansion came at an opportune time – at the beginning of the Dussera & Diwali festivals.
This news appears to have led to the buying frenzy in the TBZ stock.
Interestingly, the other jewellry stocks such as Gitanjali Gems Ltd, Goenka Diamond and Jewels Ltd, Thangamayil Jewellery Ltd & Titan Industries joined the party.
However, now the million dollar question is whether if you were lucky enough to get into TBZ at lower levels, you should hold on or bail out by encashing your gains.
S. P. Tulsian is very clear that speculative interests are driving the stock and so investors should get off. He said “One can call jewellery stocks as speculative element … I will throw caution on … Tribhovandas Bhimji Zaveri (TBZ) .. in fact I am not at all convinced with the valuations, in fact we have seen the fate of TBZ when it got listed, there were no buyers but maybe after couple of months when the stock had seen the under ownership since then the stock is moving up. We have been talking that the retail investors get attracted at the very high level and I do not see the fundamentals to justify these valuations both for Goenka Diamond as well as for TBZ“.
Sudarshan Sukhani also added the same word of caution when he categorically said “Tribhovandas Bhimji Zaveri (TBZ) is something that you need to avoid completely. It is a stock that did not list well and then it is running away at some point of time. We have seen hundreds of these stories; they have literally dismayed and disappointed investors in the final reckoning. We do not know when that final reckoning comes but my advise is stay away, if you have some momentum trades, take your profits and go. This is not an investment idea by any chance“.
Common sense also dictates that when a stock balloons the way that TBZ has done, there has to be heavy correction and consolidation before the upmove resumes.
So, I began selling my TBZ stock at about Rs. 200+ and cleaned out my inventory at about Rs. 255. Now, I am waiting for the big crash to come to vindicate my selling out!