Kusumgar Limited's Rs 650-crore IPO closed with 14 times subscription, driven by strong interest from non-institutional and retail investors. While the company faces short-term headwinds from delayed defense orders and US tariffs, its expansion into engineered fabrics remains a key focus. The shares are expected to list on the BSE and NSE on July 15.
The initial public offering of Kusumgar Limited closed today with strong participation from various investor categories. The Rs 650-crore issue saw bids for 16.56 crore shares against an offer of 1.14 crore shares. Non-institutional investors led the demand by subscribing 42 times their quota, while retail investors bid for approximately 10 times the shares reserved for them. Qualified institutional buyers subscribed 2.19 times their portion, and the employee segment was subscribed nearly 4 times.
Financial Performance and Business Context
Investors looking at this IPO should note that the issue is an offer for sale, meaning the company will not receive any new money from this process. All proceeds will go to the selling promoters. Financially, the company has shown growth over the last two years, with revenue moving from Rs 467.9 crore in FY24 to Rs 692 crore in FY26. Net profit also increased from Rs 84.3 crore to Rs 98.2 crore during the same period.
However, a closer look at the latest performance shows some pressure. The company experienced a year-on-year decline in both revenue and profit for FY26. According to the company's disclosures, this was largely due to the deferment of certain defense orders and the impact of US tariffs on its export business. These factors highlight the risks associated with the company’s dependence on specific export markets and order-based government defense contracts.
Sector Positioning and Future Outlook
Kusumgar operates in the engineered fabrics space, supplying products for aerospace, defense, automotive, and industrial sectors. The company benefits from a diversified product portfolio and integrated manufacturing capabilities. The industry is projected to see long-term growth, with the domestic engineered fabrics market expected to reach Rs 21.1 billion by FY31 and the global market estimated to touch $112.2 billion by 2030.
Investors should monitor how the company manages the volatility in its order book and navigates international trade policies. The reliance on defense contracts often means that revenue can be inconsistent depending on when projects are commissioned and delivered. Furthermore, the company’s ability to offset tariff-related costs through its product mix or by expanding into new geographic regions will be important for maintaining its profit margins in the coming quarters.
With the bidding process now complete, the basis of allotment is expected to be finalized on July 13. Investors who have applied for the shares should look for credit to their demat accounts or refunds to their bank accounts on July 14. Trading for the company's equity shares is scheduled to begin on the BSE and NSE on July 15.