Shree Karni Fancom lists at 57% premium at Rs 44 per share

Shree Karni Fancom Limited produces customised knitted and woven fabrics for industries such as luggage, medical arch support, chairs, shoes, and apparel, debuted on the Indian stock market today.

The company’s stock opened at Rs 260 per share on the NSE, reflecting a substantial 14.54% premium over the final issue price of Rs 227 per share. The market capitalisation on the NSE stands at Rs 193 crore.

IPO Proceeds

The Company intends to allocate the Net Proceeds from the Issue to several key objectives. These include funding the capital expenditure for establishing a dyeing unit in Navsari District, Surat, Gujarat, as well as financing the acquisition of new machinery slated for installation at a new unit for bag manufacturing in Palsana, Surat, Gujarat. This expansion aims to diversify the product portfolio. Additionally, funds will be allocated to meet the working capital requirements of the company, along with provisions for general corporate purposes.

Business Overview

Incorporated in March 2018, Shree Karni Fancom Limited produces customized knitted and woven fabrics for industries such as luggage, medical arch support, chairs, shoes, and apparel. The company specializes in woven fabrics, knitted fabrics, coated fabrics, and 100% polyester, and sources yarn, resin, acrylic, and coating chemicals to produce specialized technical textiles. The manufacturing unit has modern, highly automated machines that produce specialised technical textiles.

Subscription details

On March 11, 2024, the final day of the IPO window, the IPO witnessed an impressive response, with a subscription rate of 296.43 times. The public issue received remarkable interest, with the retail category being subscribed 330.45 times, while the QIB and NII category reached a subscription rate of 112.94 and 461.58 times respectively.

The IPO price band was between Rs 220 to Rs 227 per share, with a face value of Rs 10 per share and a lot size of 600 shares. The total size of the company’s IPO was Rs 42.49 crore, and the final share issue price was fixed at Rs 227 each.

Conclusion

The crucial question that arises in everyone’s mind is whether to hold onto the shares or book profits. Investors who applied for listing gains only have already earned 14.54% on the listing day itself and can choose to book the profit it has generated. On the other hand, investors with a higher risk appetite may opt to hold the shares for the medium to long term, which could prove to be beneficial.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.