The initial public offering (IPO) of Kusumgar Limited witnessed robust investor participation on its second day of subscription, achieving an overall subscription rate of nearly five times (4.68x). Data indicates that investors placed bids for 5,36,55,385 equity shares against the 1,14,68,094 shares available across all investor categories. The three-day IPO, which commenced on Wednesday, will conclude its subscription period on July 10.
Strong Demand Across Investor Segments
The non-institutional investor (NII) segment emerged as the primary driver of demand, with its reserved shares subscribed an impressive 10.78 times. Retail individual investors (RII) also showed significant interest, with their quota attracting bids 4.50 times the allocation. The employee reservation portion was subscribed 2.07 times. On the first day of the issue, the share sale was subscribed 3.45 times.
IPO Details and Financials
Kusumgar Limited set the IPO price band at Rs 398-419 per equity share, each with a face value of Re 1. The public issue is structured entirely as an Offer for Sale (OFS), comprising 1.55 crore equity shares. This means the company will not receive any proceeds from the issue; instead, the entire amount will go to the selling shareholders.
Retail investors are required to bid for a minimum lot of 35 shares and in multiples thereafter. At the upper end of the price band, the minimum investment for retail investors stands at Rs 14,665.
- Allocation Breakdown:
- 50% for Qualified Institutional Buyers (QIBs)
- 35% for retail investors
- 15% for non-institutional investors
Additionally, shares worth Rs 3.5 crore have been reserved for eligible employees, who will receive a discount of Rs 39 per share on the final issue price.
Company Performance and Brokerage Views
Financially, Kusumgar Limited reported revenue from operations of Rs 692 crore in FY26, an increase from Rs 467.9 crore in FY24. Net profit also rose to Rs 98.2 crore from Rs 84.3 crore during the same period. However, compared to the previous financial year (FY25), FY26 saw an 11.2% decline in revenue and a 12.3% fall in net profit. This was primarily attributed to deferred defense orders and the impact of US tariffs on exports.
The IPO is being managed by Axis Capital, IIFL Capital Services, and Motilal Oswal Investment Advisors, serving as the book-running lead managers. Bigshare Services is acting as the registrar to the issue. The company's shares are proposed for listing on both the BSE and NSE, with a tentative listing date scheduled for July 15.
BP Equities assigned a “SUBSCRIBE” rating to the issue, noting, "At the upper price band of Rs 419, Kusumgar Ltd. is valued at a P/E multiple of 45.0x based on FY26 earnings. Given the company’s historical growth track record, expanding margins, scalable business model and industry growth potential, we believe the valuation is justified."
ICICI Securities also recommended a “SUBSCRIBE” rating, stating, "Kusumgar is a niche play in the engineering fabric space with large presence in Aerospace and Defence segment, which is gaining strong traction due to government impetus on make in India preference. High entry barrier and technical capabilities make Kusumgar a good play in the engineering fabric space."