Shares of engineered fabric manufacturer Kusumgar Ltd made a strong debut on bourses on Wednesday, July 15, 2206 and got listed at a 37 per cent premium over the issue price of Rs 419. The stock opened at Rs 574 on the BSE, up 36.99 per cent from the issue price. It later surged to hit the high of Rs 620 apiece. Last seen, it was trading at Rs 611.20 with a gain of Rs 37.20 or 6.48 per cent, and the market cap of the company stood at Rs 6,399.75. In between, the scrip touched a low of Rs 567.95.
On the National Stock Exchange (NSE), Kusumgar’s shares made a debut at Rs 569, registering a jump of 35.79 per cent. In the intraday session, the stock climbed 42.67 per cent to hit a high of Rs 597.80. The stock witnessed profit booking and briefly touched a low of Rs 568.15.
“Kusumgar made a strong stock market debut, listing at Rs 569 on NSE, a premium of nearly 36 per cent over its IPO price of Rs 419, supported by robust investor demand and positive sentiment towards the defence sector. While the company operates in a niche engineered fabrics business with strong entry barriers and long-term opportunities in aerospace and defence, investors should also note that its financial performance has weakened over the last three years, with declines in revenue, EPS and RoNW.ย Our view is to hold the stock with a strict stop-loss at Rs 520. IPO allottees can consider booking partial profits after the strong listing and hold the remaining shares with this stop-loss, while fresh investors should avoid chasing the stock at current levels and wait for better entry opportunities after consolidation and improved earnings visibility,” said Shivani Nyati, Head of Wealth at Swastika Investmart Ltd.
Received whopping 128.85 times subscription
Earlier, the initial public offering received a whopping 128.85 times subscription on the closing day of bidding on Friday, driven by strong response from Qualified Institutional Buyers (QIBs). According to data available on the National Stock Exchange, the Rs 650-crore IPO attracted bids for 1,47,76,17,435 shares against 1,14,68,094 shares on offer.
The portion reserved for QIBs was subscribed a massive 284.10 times. The category for non-institutional investors was booked 165.46 times, and the retail investors subscribed their quota 26.47 times.
Founded in 1990, Kusumgar Ltd manufactures woven, coated and laminated synthetic fabrics, known as engineered fabrics.
Kusumgar IPO was fully subscribed on the first day of bidding on Thursday. The IPO is entirely an offer-for-sale (OFS). Since the issue is an OFS, the Mumbai-based firm will not receive any proceeds and the funds will go entirely to the selling shareholders.
The firm has garnered Rs 193.9 crore from anchor investors.
What does the company do?
Founded in 1990, Kusumgar Ltd manufactures woven, coated and laminated synthetic fabrics, known as engineered fabrics. The company primarily produces aerospace and defence fabrics, industrial and automotive fabrics, and outdoor and lifestyle fabrics.
Axis Capital, IIFL Capital Services, and Motilal Oswal Investment Advisors are the book-running lead managers to the IPO.
ALSO READ |ย 3M India shares to trade ex-date for Rs 506 dividend soon, check record date and other details
(This article is for informational purposes only and should not be construed as investment, financial, or other advice.)