Kalana Ispat opened its SME IPO for subscription on September 19 and will close on September 23. The company aims to raise ₹32.59 crore through the offering and plans to list its shares on the NSE SME platform at ₹66 per share.
The IPO has been witnessing robust demand. The issue was subscribed 15.91 times till 10:40 am on Monday, the third day of the bidding. The IPO received bids for 7.5 crore equity shares against 46.90 lakh shares on offer. It ended Day 1 with 0.79 times subscription.
The retail investor segment received 24.13 times subscription, while the non-institutional investors (NII) category was booked 7.68 times.
The IPO's grey market premium (GMP) today is ₹20 per share, which indicates an expected listing price of ₹86, a premium of 30.30 per cent from its issue price of ₹66. The GMP dropped from ₹35 in the previous session, September 20.
Kalana Ispat's IPO is comprised of only a fresh issue of 49.38 lakh shares with no offer-for-sale component. The company plans to use the net proceeds for several key objectives, including capital expenditure for installing a 4 MW DC and 3.5 MW AC ground-mounted solar power plant featuring a TPSAT structure. Additionally, the funds will be used to establish a rolling mill at Survey No. 4/1, Taluka Sanand, Mouje Kala village, Ahmedabad, which will involve constructing an industrial shed and acquiring the necessary equipment, machinery, and other assets. The remaining amount will be allocated toward general corporate purposes, supporting the company's operational and strategic growth.
Retail investors must apply for a minimum lot size of 2,000 shares, amounting to an investment of ₹1,32,000. High net-worth individuals (HNIs) must apply for at least two lots, or 4,000 shares, totalling ₹2,64,000.
The allotment for the IPO is expected to be finalised on Tuesday, September 24, 2024. Meanwhile, the initiation of refunds for investors who were not allotted the shares and the credit of shares to the Demat account of the allottees will take place on Wednesday, September 25. The shares will be listed on the NSE SME platform on Thursday, September 26, 2024.
Jawa Capital Services Private Limited is the book-running lead manager of the Kalana Ispat IPO, while Skyline Financial Services Private Ltd is the registrar. After Trade Broking is the market maker for the Kalana Ispat IPO.
Incorporated in October 2012, Kalana Ispat Limited manufactures M.S. and Alloy Steel Billets in various grades. The company's operations are categorized into two main segments: product sales and service sales. Its manufacturing facility is certified by international quality management systems, such as ISO 2830:2012, and has an annual production capacity of 38,000 MT.
Despite an 11 per cent revenue decline, Kalana Ispat saw a significant 373 per cent increase in profit after tax (PAT) between the financial years ending March 31, 2023, and March 31, 2024.
"The company is engaged in manufacturing/trading and providing related services in metal products. It marked minuscule earnings from FY21 to FY23 and posted bumper profits for FY24 i.e. pre-IPO year, that raise eyebrows and concern over its sustainability. Its future prospects hinges on solar power plant installation. Based on FY24 super earnings, the issue appears aggressively priced. Well-informed investors may park funds for long term," Dilip Davda of Chittorgarh.com, said, assigning a 'may apply' rating to the issue.
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