Kalana Ispat IPO: Strong Demand, Latest GMP, and Subscription Status

Kalana Ispat’s SME IPO, which opened for subscription on September 19, will close on September 23. The company aims to raise ₹32.59 crore by offering shares at a price of ₹66 each, and plans to list on the NSE SME platform. The IPO has received strong demand, with the issue being subscribed 15.91 times as of 10:40 AM on the third day of bidding. A total of 7.5 crore equity shares have been bid for, against 46.90 lakh shares on offer. On Day 1, the IPO saw a 0.79 times subscription.

The retail investor segment saw a subscription of 24.13 times, while the non-institutional investor (NII) category was subscribed 7.68 times. In the grey market, Kalana Ispat’s shares currently command a premium of ₹20 per share, suggesting an anticipated listing price of ₹86, which represents a 30.30% premium over the issue price. However, this is a decrease from the ₹35 grey market premium seen on September 20.

The IPO consists entirely of a fresh issue of 49.38 lakh shares, with no offer-for-sale component. The company plans to use the funds raised for capital expenditure, particularly for setting up a 4 MW DC and 3.5 MW AC ground-mounted solar power plant with a TPSAT structure. Additionally, part of the proceeds will be used to establish a rolling mill in Mouje Kala village, Ahmedabad, including the construction of an industrial shed and the acquisition of equipment and machinery. The remaining funds will be allocated for general corporate purposes.

Retail investors are required to apply for a minimum of 2,000 shares, amounting to an investment of ₹1,32,000. High net-worth individuals (HNIs) need to apply for at least two lots, or 4,000 shares, for a minimum investment of ₹2,64,000.

The allotment of shares is expected to be finalized by September 24, 2024. Refunds for unsuccessful applicants and the crediting of shares to successful allottees’ Demat accounts are scheduled for September 25, with the shares set to list on the NSE SME platform on September 26, 2024.

Jawa Capital Services Private Limited is the book-running lead manager for the IPO, while Skyline Financial Services Private Ltd is the registrar. After Trade Broking is the market maker for this IPO.

Established in October 2012, Kalana Ispat Limited specializes in the manufacturing of M.S. and Alloy Steel Billets in various grades. The company operates two main business segments: product sales and service sales. Its manufacturing facility is certified under international standards like ISO 2830:2012 and has an annual production capacity of 38,000 MT.

Although Kalana Ispat’s revenue declined by 11%, the company recorded a massive 373% rise in profit after tax (PAT) between March 31, 2023, and March 31, 2024. However, industry experts have expressed caution. Dilip Davda from Chittorgarh.com highlighted concerns about the sustainability of the company’s profit surge, particularly as it comes ahead of the IPO. He noted that the company’s future is tied to its solar power plant project, and the IPO appears aggressively priced based on its FY24 earnings. Davda recommended that informed investors may consider this IPO for long-term investments.

Disclaimer: The information provided in this article is based on updates and reports gathered from various internet sources. Every effort has been made to ensure accuracy and reliability. We encourage readers to verify the details independently.