NAPS Global India Limited, a wholesale importer and supplier of textile products, has launched its Initial Public Offering (IPO), raising ₹11.88 Crores through the issue of 13.20 Lakh shares. The company, which specializes in cotton and man-made fabrics, plays a vital role in Maharashtra's garment manufacturing supply chain, ensuring timely delivery of bulk fabric supplies to garment vendors across the region.

Subscription and Allotment Process

The NAPS Global India IPO opened for subscription on March 4, 2025, and closed on March 6, 2025. The IPO was priced at ₹90 per share, and as of the final day of the subscription period, it had been subscribed 1.19 times. This indicates a moderate interest in the public offering, reflecting the company's steady growth over the years.

The allotment of shares will be finalized on March 7, 2025. Investors can check their allotment status by visiting the registrar's website and entering their application number, PAN, or DP Client ID. Following this process, they can know whether they will receive shares in this issue.

Market Capitalization and Pricing

At an IPO price of ₹90 per share, NAPS Global India will have a market capitalization of ₹39.87 Crores. The lot size for retail investors is 1,600 shares, which means the minimum investment required for retail investors is ₹1,44,000. High-Net-Worth Individuals (HNIs) are required to invest in a minimum of 2 lots (6,000 shares), which amounts to ₹2,88,000. Given the price range, investors need to weigh the opportunity carefully before making an investment.

The Grey Market Premium (GMP) for this IPO is currently at ₹0, suggesting no immediate premium for listing gains. The GMP reflects market sentiment and the demand-supply dynamics of the stock, but it is important to note that trading in the Grey Market is unregulated, and it is not a reliable indicator of listing price.

IPO Objectives and Financials

NAPS Global India plans to utilize the proceeds from the IPO to fund working capital requirements, with ₹919.00 Lakhs allocated for this purpose. Additionally, ₹169.00 Lakhs will be used for general corporate purposes.

Looking at the company’s financials, NAPS Global India has shown consistent growth. For the fiscal year ending December 31, 2024, the company reported revenues of ₹5,283.38 Lakh, which is a significant increase from ₹4,788.30 Lakh in 2023. The company’s profit after tax (PAT) for 2024 stood at ₹153.43 Lakh, reflecting solid profitability compared to ₹145.22 Lakh in 2023.

Despite the company's growth, the pre-issue Price to Earnings (P/E) ratio stands at 12.93x, and the post-issue P/E ratio rises to 27.45x. This is notably higher than the industry average of 15x, which could indicate that the IPO is priced fully, making it less attractive for long-term investors looking for undervalued opportunities.

Market Outlook and GMP Analysis

The IPO is launched in a market that is cautiously optimistic, with the Grey Market Premium showing no listing gains. While the company's financials and growth prospects are promising, the lack of GMP suggests that the market does not expect significant short-term gains from the IPO. This makes it essential for investors to focus on the company's long-term potential and not just immediate listing gains.

In terms of profitability and growth, NAPS Global India’s EBITDA has increased from ₹54.20 Lakh in 2022 to ₹210.60 Lakh in 2024, demonstrating the company’s ability to scale. The company's Return on Capital Employed (ROCE) and Return on Equity (ROE) are also impressive at 47.47% and 59.14%, respectively, which signals efficient utilization of capital and a high return on shareholder equity.

However, investors should also be aware of the market risks associated with the textile industry, including fluctuating raw material prices and demand shifts in garment manufacturing. These factors could impact the company’s ability to maintain consistent growth in the coming years.

Key Takeaways

The NAPS Global India IPO is a significant event for the company, with promising long-term growth prospects in the textile industry. However, given the high P/E ratio and lack of Grey Market Premium, investors should approach the IPO with caution, focusing on the company’s financial performance and its role in the garment supply chain. With the allotment process set to conclude soon, prospective investors should carefully consider their risk appetite before committing to this IPO.

The Upcoming IPOs in this week and coming weeks are Super Iron Foundry.

The Current active IPO is NAPS Global.

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