Kalana Ispat IPO: SME Public Issue Subscribed 3x On Day 2, GMP Hints Premium Listing; Check Key Dates

Kalana Ispat, a manufacturer of MS and Alloy Steel Billets, has opened its Small and Medium Enterprise (SME) Initial Public Offering (IPO) for subscription, generating considerable buzz in the market. The IPO, which opened on September 19, 2024, and will close on September 23, 2024, aims to raise Rs 32.59 crore. Investors are watching this offering as the company looks to expand its manufacturing capabilities and incorporate sustainable energy solutions into its operations. Kalana Ispat plans to list its shares on the NSE SME platform at an issue price of Rs 66 per share.

IPO Subscription Status

Kalana Ispat's IPO has witnessed healthy demand, particularly from retail investors. As of 3:21 pm on Day 2 (Friday, September 20), the IPO had been subscribed 3.17 times. The offering received bids for 1.48 crore equity shares against the 46.90 lakh shares on offer. Retail investors led the charge, with their segment being subscribed 5.62 times. Non-institutional buyers have shown moderate interest, subscribing to 73% of their allocated portion.

Details of the Kalana Ispat IPO

The Kalana Ispat IPO is comprised solely of a fresh issue of 49.38 lakh shares, with no offer-for-sale (OFS) component. The absence of an OFS indicates that the existing promoters and shareholders are not diluting their stakes, which is often seen as a positive signal by investors.

Use of Proceeds

Kalana Ispat plans to use the proceeds from the IPO to fund several key projects aimed at expanding its operations and integrating sustainable energy solutions.

The main objectives for deploying the funds include capital expenditure for a 4 MW DC and 3.5 MW AC ground-mounted solar power plant featuring a TPSAT structure and, the establishment of a new rolling mill at Survey No. 4/1, Taluka Sanand, Mouje Kala village, Ahmedabad. Another objective is general corporate purposes.

Investment Details

For retail investors, the minimum lot size for the Kalana Ispat IPO is 2,000 shares, representing an investment of Rs 1,32,000 at the issue price of ₹66 per share. For high-net-worth individuals (HNIs), the minimum application is for two lots, or 4,000 shares, requiring an investment of Rs 2,64,000.

Key dates to watch for the IPO include:

September 24, 2024: The basis of the allotment of shares will be finalized.
September 25, 2024: Refunds will be initiated for investors who were not allotted shares, and shares will be credited to the Demat accounts of successful applicants.
September 26, 2024: Kalana Ispat shares will be listed on the NSE SME platform, providing liquidity to investors and marking the company's debut in the public market.

Company Overview

Founded in October 2012, Kalana Ispat Limited has built a reputation as a reliable manufacturer of MS and Alloy Steel Billets. The company's operations are divided into two main segments: product sales and service sales. With a production capacity of 38,000 metric tonnes (MT) annually, Kalana Ispat is certified by international quality management standards, including ISO 2830:2012.

Despite a challenging year that saw an 11% decline in revenue, Kalana Ispat delivered a 373% increase in profit after tax (PAT) between the fiscal years ending March 31, 2023, and March 31, 2024.

Kalana Ispat IPO GMP

The grey market premium (GMP) for Kalana Ispat's IPO stood at Rs 11 per share as of September 19, 2024, indicating an expected listing price of Rs 77 per share, which represents a 16.66% premium over the issue price of Rs 66. The rise in GMP from Rs 10 in the previous session suggests that investor sentiment around the IPO remains bullish.

Lead Managers and Market Makers

The book-running lead manager for the Kalana Ispat IPO is Jawa Capital Services Private Limited, while Skyline Financial Services Private Ltd serves as the registrar. Additionally, After Trade Broking is the market maker for the IPO.