Kusumgar IPO Delivers Strong Debut, Lists At 37% Premium Following 129x Subscription

Kusumgar shares made a strong stock market debut on Wednesday, listing at nearly a 37% premium over their initial public offering (IPO) price after the issue attracted overwhelming investor interest and was subscribed 128.85 times during its three-day bidding period. The listing was broadly in line with grey market expectations, reflecting sustained demand for the issue.

On the NSE, Kusumgar shares debuted at ₹569 apiece, a premium of 35.80% over the issue price of ₹419. On the BSE, the stock opened at ₹574, up 36.99% from the IPO price, valuing the Mumbai-based company at approximately ₹6,026.5 crore.

At around 11:30 AM, the stock was trading at ₹614.55 on the NSE.

Listing In Line With Grey Market Expectations

Ahead of its market debut, Kusumgar IPO was commanding a grey market premium (GMP) that indicated a listing gain of around 38%. The actual listing was broadly in line with those expectations.

The IPO had a price band of ₹398-419 per share and was open for subscription from July 8 to July 10.

With a lot size of 35 shares, investors who were allotted one lot made a listing gain of ₹19,915, as the value of one lot increased from ₹14,665 at the issue price to ₹19,915 at the NSE listing price.

Issue Attracted Strong Subscription

The public issue received an overwhelming response from investors across categories and was subscribed 128.85 times, with bids received for 147.76 crore shares against 1.14 crore shares on offer, according to NSE data.

Qualified Institutional Buyers (QIBs) led the demand by subscribing their reserved quota 284.10 times. The Non-Institutional Investor (NII) portion was subscribed 165.46 times, while the Retail Individual Investor (RII) category was subscribed 26.47 times.

Before opening for public subscription, the company had raised ₹193.95 crore from anchor investors. The anchor book included marquee global and domestic institutions such as BlackRock Global Funds, Goldman Sachs, Nippon India Mutual Fund, SBI Mutual Fund, WhiteOak Capital Mutual Fund, ICICI Prudential Mutual Fund, Mirae Asset Mutual Fund, Motilal Oswal Mutual Fund, Bandhan Mutual Fund, Tata Mutual Fund, Axis Mutual Fund, Axis Max Life Insurance and Kotak Mahindra Life Insurance.

The ₹650-crore IPO consisted entirely of an offer for sale (OFS) by promoters Siddharth Yogesh Kusumgar HUF, Siddharth Yogesh Kusumgar and Sapna Siddharth Kusumgar.

Since the issue did not include a fresh issue of shares, the company will not receive any proceeds from the IPO. The entire proceeds will go to the selling shareholders.

Kusumgar manufactures specialised engineered textile products catering to sectors including defence, aerospace and industrial applications, operating in a niche segment with relatively high entry barriers.

Market Experts On The Debut

Shivani Nyati, Head of Wealth at Swastika Investmart, said the company's strong listing reflected robust investor demand and positive sentiment towards the defence-related manufacturing space.

However, she cautioned that Kusumgar's financial performance has weakened over the past three years, with declines in revenue, earnings per share (EPS) and return on net worth (RoNW). She also noted that FY25 earnings were supported by a one-time CFF parachute order, while the IPO was entirely an OFS, meaning the company did not raise fresh capital for future expansion.

Nyati advised IPO allottees to book partial profits following the strong listing while holding the remaining shares with a stop-loss of ₹520. She recommended that fresh investors avoid chasing the stock at current levels and instead wait for consolidation and better earnings visibility before considering fresh investments