Mumbai-based Kusumgar, a prominent manufacturer of woven, coated, and laminated synthetic fabrics, commonly known as engineered fabrics, launched its Initial Public Offering (IPO) for subscription today, July 8. The public issue aims to raise Rs 650 crore and will remain open for bidding until Friday, July 10.
Kusumgar IPO Details
The company is offering its shares within a price band of Rs 398 to Rs 419 per equity share. Investors can apply for a minimum of 35 equity shares and in multiples thereafter. The entire IPO is structured as an offer-for-sale (OFS) of up to 1,55,13,126 equity shares, meaning Kusumgar will not receive any direct proceeds from the issue.
Ahead of the public offering, Kusumgar successfully raised Rs 193.95 crore from anchor investors, allocating 46,28,877 equity shares at the upper price band of Rs 419 apiece. Notable anchor investors included Blackrock, Goldman Sachs, ISIF Equity Fund, India Acorn Fund, SBI Mutual Fund, Bandhan Mutual Fund, Axis Mutual Fund, ICICI Mutual Fund, Whiteoak Capital, and Mirae Asset Mutual Fund.
Company Profile and Financials
Established in 1990, Kusumgar has developed over 1,000 unique fabric types, solidifying its position in the synthetic functional and performance fabric sector. Its products cater to diverse industries such as aerospace and defense, industrial and automotive, and outdoor and lifestyle segments.
For the financial year ended March 31, 2026, Kusumgar reported a net profit of Rs 98.20 crore on a revenue of Rs 711.78 crore. The company's total market capitalization currently stands at Rs 4,400 crore.
Investor Allocation and Listing Prospects
The IPO allocation reserves 50 percent of shares for Qualified Institutional Bidders (QIBs), 15 percent for Non-Institutional Investors (NIIs), and 35 percent for retail investors.
Market observers note a strong grey market premium (GMP) for Kusumgar shares, reportedly in the range of Rs 168-170 per share. This suggests a potential listing gain of approximately 40 percent for investors. The shares are scheduled to debut on both the BSE and NSE on July 16.
Brokerage Recommendations
- SBI Securities: Recommended 'Subscribe' for a long-term horizon, citing the company's technical expertise, specialized capabilities, and potential benefits from Free Trade Agreements (FTAs). They acknowledge the P/E multiple of 44.8 times (FY26) is higher than peers but justified by growth and industry-leading margins.
- Swastika Investmart: Issued a 'Neutral' rating, advising consideration primarily for potential listing gains. They highlighted a niche business with high entry barriers and defense sector tailwinds but noted a weakening financial performance in FY26, suggesting FY25 was a peak due to a one-off order.
- Marwadi Financial Services: Assigned a 'Subscribe with Caution' rating, recognizing high entry barriers and reasonable valuation but raising concerns about negative operating cash flows in FY25.
- SMIFS: Recommended 'Subscribe' for long-term, emphasizing superior EBITDA and PAT margins, RoE, and RoCE compared to peers, supported by a high-margin product mix.
- BP Equities: Recommended 'Subscribe' for medium to long-term, believing the valuation (45x FY26 earnings) is justified by historical growth, expanding margins, and a scalable business model.
- Ventura Securities: Advised 'Subscribe', noting Kusumgar's niche in engineered and technical fabrics and integrated capabilities. They cautioned investors to monitor working capital and cash flow despite strong margins.
- Kunvarji Financial Services: Recommended 'Subscribe for long-term', citing the company's specialization in high-performance fabrics for critical applications and strong competitive advantages due to technical capabilities and certifications.
Axis Capital, Motilal Oswal, and IIFL Capital are the book-running lead managers for the Kusumgar IPO, with Bigshare Services acting as the registrar.