NAPS Global India Limited, a prominent wholesale importer and supplier of textile products, is set to launch its Initial Public Offering (IPO) with a fixed price issue of ₹ 11.88 Crores. The offering will consist of 13.20 lakh fresh issue shares, with the share price fixed at ₹90 per equity share. The IPO subscription period will open on March 4, 2025, and close on March 6, 2025, with allotments expected to be finalized by March 7, 2025. The shares will be listed on the BSE SME on or around March 11, 2025.

Company Overview and Role in the Textile Industry

NAPS Global India, incorporated in March 2014, plays a crucial role in Maharashtra's garment manufacturing supply chain, specializing in the import of cotton, man-made fabrics, and other textile products from China and Hong Kong. Catering primarily to garment manufacturers, NAPS ensures the timely supply of bulk textile products to vendors across the region, which are used in various segments such as garments, upholstery, and industrial fabrics.

IPO Details and Subscription Information

The NAPS Global India IPO offers investors a chance to acquire shares at ₹90 each. The total issue size is ₹11.88 crores, and investors can purchase in lots of 1,600 shares. Retail investors must invest a minimum of ₹1,44,000, while High-Net-Worth Individuals (HNIs) are required to invest a minimum of ₹2,88,000 (2 lots).

Company's Financials and Performance

The company has shown steady growth in revenues and profits over recent fiscal years, with revenue increasing from ₹1,348.42 lakh in FY2022 to ₹5,283.38 lakh in FY2024. The Profit After Tax (PAT) for FY2024 stands at ₹153.43 lakh, reflecting healthy financial performance. The EBITDA has also been rising steadily, signaling operational efficiency.

However, the pre-issue Price-to-Earnings (P/E) ratio of 12.93x and post-issue P/E ratio of 27.45x against the industry average of 15x indicates that the IPO is fully priced. Return on Equity (ROE) for FY24 is 59.14%, and Return on Capital Employed (ROCE) stands at 47.47%, suggesting robust profitability.

Grey Market Premium and Listing Expectations

The Grey Market Premium (GMP) for the NAPS Global India IPO is currently at ₹0, reflecting minimal trading activity in the unofficial market. Given the company’s financial metrics and IPO valuation, experts suggest that NAPS Global India IPO may not generate immediate listing gains. Investors should consider long-term growth potential rather than short-term gains when evaluating this IPO.

IPO Objectives and Use of Proceeds

NAPS Global India plans to utilize the net proceeds of the IPO primarily for working capital requirements (₹919 lakh) and general corporate purposes (₹169 lakh). These funds will support the company’s operations and expansion, positioning it for further growth in the competitive textile import sector.

Conclusion and IPO Recommendation

While NAPS Global India has demonstrated solid growth in recent years, the fully priced IPO and lack of Grey Market Premium may make it less appealing for short-term investors seeking listing gains. For long-term investors, the steady financial performance and critical role in India’s garment supply chain may present opportunities. However, given the valuation concerns and lack of immediate gains expected at listing, we recommend caution for those seeking quick profits, advising investors to weigh the financial stability and growth prospects before proceeding with an investment in the NAPS Global India IPO.

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