Kataria Industries, listed on the NSE SME platform, has delivered remarkable returns to its investors as it has become a multibagger stock just three months after its market debut.
The stock, which was listed at a significant 90 per cent premium in July 2024, has soared 116 per cent to reach ₹207.20 (previous close) from its IPO price of ₹96. In addition, from its listing price of ₹182, the stock has appreciated by approximately 14 per cent.
Shortly after its listing, Kataria achieved a record high of ₹247 in August 2024. However, it has since experienced a decline of around 16 per cent from that peak. Notably, the stock also reached its 52-week low of ₹167.65 during the same month.
Kataria Industries' SME IPO, valued at ₹54.58 crore, opened for public subscription from July 16 to 19, 2024, and made its debut on the NSE SME platform on July 24, 2024. The price band for the issue was set between ₹91 and ₹96 per share.
The IPO received an overwhelming response, with subscriptions reaching 393.87 times the offered size within the three-day bidding window. Investors placed bids for 148.86 crore shares, compared to 37.79 lakh shares that were on offer. The retail investor category was subscribed 274.61 times, while the non-institutional investors (NII) segment was subscribed 970.17 times. Institutional interest was also solid, with the qualified institutional buyer (QIB) category subscribed 171.04 times.
The minimum lot size for an application was 1200 shares. The minimum amount of investment required by retail investors was ₹1,15,200, while high-net-worth individuals (HNIs) needed to apply for at least two lots, amounting to ₹2,30,400 for 2,400 shares.
The company planned to use the money raised from the issue towards several key objectives, including capital expenditure for the purchase of plant and machinery, repayment of existing debt, and addressing general corporate purposes.
Interactive Financial Services Ltd was the book-running lead manager of the Kataria Industries IPO, while Bigshare Services Pvt Ltd was the registrar to the issue. The market maker for Kataria Industries IPO was MnM Stock Broking.
Established in 2004, Kataria Industries Limited specialises in the production and supply of low relaxation pre-stressed concrete (LRPC) strands, steel wires, post-tensioning anchorage systems, HDPE single-wall corrugated sheathing ducts, couplers, and aluminium conductors. Their diverse product lineup serves sectors such as infrastructure, roads, bridges, metros, railways, high-rise buildings, atomic reactors, LNG tanks, and power transmission and distribution lines.
Between March 31, 2023, and March 31, 2024, the company saw a revenue growth of 2.26% and a notable 28.83% rise in profit after tax (PAT).
Kataria Industries is set to acquire the Wire Division of Ratlam Wires Private Limited through a slump sale agreement. The Wire Division operates in the steel wire industry, similar to Kataria’s business but focuses on different segments like automobile, railway, and infrastructure. This acquisition will increase Kataria's steel wire production capacity by 30,000 MT annually.
Historically, Kataria has catered to the infrastructure sector, supplying LRPC strands and steel wire products for high-rise buildings, metro projects, and bridges. With the acquisition, Kataria will broaden its presence by entering the automobile and railway sectors, significantly expanding its market reach. This strategic move allows Kataria to diversify its product portfolio to include spring steel wires, PC wires, and both galvanized and ungalvanized wires. This diversification will strengthen Kataria's competitive position across various sectors such as power, infrastructure, and railways.
The total acquisition cost is set at ₹306 million, compared to the Net Asset Value of ₹302.70 million, based on unaudited financials from October 21, 2024. The payment will be made in stages, with an initial ₹80 million paid at the signing of the agreement, an additional ₹80 million within 15 days, and the balance due within 30 days.
