Kusumgar Limited's Rs 650 crore IPO saw a 32% subscription on its first day, driven largely by non-institutional and retail interest. The issue, which concludes on July 10, is an offer for sale by existing shareholders. Investors are evaluating the firm's recent financial performance, which showed a year-on-year dip in profit due to delayed defense orders and new export tariffs.
The initial public offering (IPO) of technical textile manufacturer Kusumgar Limited opened for subscription on July 8, recording a 32% subscription rate by 10:30 AM. The company aims to raise Rs 650 crore through this offering, which will remain open for retail and institutional bids until July 10. According to National Stock Exchange data, the issue received bids for over 36 lakh shares out of the 1.14 crore shares on offer.
Investor Category Breakdown
Demand was varied across different investor groups on the opening day. Non-institutional investors, which include high-net-worth individuals and corporate bodies, showed the highest interest, subscribing 64% of their reserved portion. Retail investors, who form a key part of the public issue, subscribed to 36% of their allotted quota. Additionally, the employee reservation category saw a 18% uptake. The company has also secured Rs 193.9 crore from anchor investors, a group that includes major global names like BlackRock and Goldman Sachs alongside various domestic mutual funds, signaling institutional confidence.
Financial Context and Business Risks
The IPO is structured entirely as an Offer for Sale (OFS), meaning the existing shareholders are selling a portion of their stake. Consequently, none of the Rs 650 crore proceeds will be utilized by the company for internal business expansion or debt reduction. From a financial perspective, the company has shown a multi-year growth trend, with revenue increasing from Rs 467.9 crore in FY24 to Rs 692 crore in FY26. During the same period, net profit grew from Rs 84.3 crore to Rs 98.2 crore.
However, potential investors should note the recent performance trends highlighted in the company’s filings. While the two-year figures show growth, the year-on-year performance for FY26 indicated a decline in both revenue and profit. The company attributed this pressure to specific challenges, including deferred defense-related orders and the impact of new US tariffs on its export business. These factors have led to a temporary cooling in financial performance, which investors may wish to monitor alongside the company's ability to clear its order book in the coming quarters.
Market Sentiment and Listing
The price band for the shares is set between Rs 398 and Rs 419. While unofficial grey market activity has indicated a premium of approximately 40% over the upper price band, market analysts generally advise investors to treat these unofficial figures as highly volatile and not a definitive indicator of listing performance. The shares are scheduled to debut on the BSE and NSE on July 15. The final outcome of the IPO will depend on the subscription levels from Qualified Institutional Buyers (QIBs) over the next two days, as their participation typically influences the final pricing and sentiment on the listing date.