Neelam Linens and Garments India Limited introduces a luxury bedding revolution with high thread count linens, an offering that is often seen as a status symbol in Western countries. As India’s first company to introduce high-thread-count bedding, Neelam Linens aims to elevate Indian standards, offering products that match the best available globally.

The Neelam Linens and Garments IPO is a Book Built Issue amounting to ₹13.00 Crores, consisting entirely of a fresh issue of 54.18 Lakh shares. The subscription period for the IPO began on November 8, 2024, and closed on November 12, 2024. The allotment is expected to be finalized on November 13, 2024, with shares to be listed on the NSE SME on November 18, 2024.

Share Price and Investment Details:

The price band for the Neelam Linens IPO is set between ₹20 and ₹24 per share. At the upper price of ₹24, the company’s market capitalization at the time of listing will be ₹48.52 Crores. The lot size for the IPO is 6,000 shares, meaning that retail investors must invest a minimum of ₹1,44,000. High-Net-Worth Individuals (HNIs) need to subscribe to 2 lots (12,000 shares), amounting to ₹2,88,000.

EXPERT GLOBAL CONSULTANTS PRIVATE LIMITED is the book-running lead manager, and PURVA SHAREGISTRY (INDIA) PRIVATE LIMITED is the registrar for the IPO. The market maker for the issue is Globalworth Securities Limited.

IPO Subscription and Allotment Status:

As of November 12, 2024, the Neelam Linens and Garments IPO was subscribed 92 times, indicating strong demand on the final day of subscription. However, the Grey Market Premium (GMP) is reported to be ₹0, suggesting no significant expectations for listing gains.

The allotment date for the IPO is November 13, 2024, and investors can check the allotment status on the registrar’s website using their application number, PAN, or DP Client ID.

Objectives of the IPO:

The proceeds from the Neelam Linens IPO will be used for the following purposes:

1. ₹557.41 Lakhs for capital expenditure to purchase embroidery machines for expansion.
2. ₹400.00 Lakhs for the prepayment or repayment of certain outstanding borrowings.
3. General corporate purposes.

Financial Performance:

For the fiscal years 2024, 2023, and 2022, Neelam Linens reported:

• Revenue from operations: ₹10,474.42 Lakhs (FY24), ₹10,541.13 Lakhs (FY23), ₹10,379.68 Lakhs (FY22).
• EBITDA: ₹781.11 Lakhs (FY24), ₹652.51 Lakhs (FY23), ₹593.62 Lakhs (FY22).
• Profit after Tax (PAT): ₹246.05 Lakhs (FY24), ₹237.87 Lakhs (FY23), ₹298.57 Lakhs (FY22).

The pre-issue EPS is ₹0.51, and the post-issue EPS is ₹0.45. The pre-issue P/E ratio stands at 145.09x, while the post-issue P/E ratio is 164.44x, compared to the industry average P/E of 38.60x. The ROCE for FY24 is 13.69%, and the RoE stands at 5.68%, signaling that the IPO is fully priced.

IPO Review:

While Neelam Linens and Garments introduces a promising concept of luxury bedding with high thread count, the financials and valuation suggest that the IPO is fully priced. With a pre-issue P/E ratio of 145.09x and a post-issue P/E ratio of 164.44x, it stands higher than the industry average, which raises concerns regarding overvaluation. Furthermore, the Grey Market Premium (GMP) indicates no immediate listing gains.

Given these metrics, we recommend investors to avoid the Neelam Linens and Garments IPO for short-term listing gains. However, for those with a long-term investment horizon, the company’s unique positioning in the luxury bedding sector may offer opportunities in the future, depending on market conditions and the company's performance post-listing.

The Upcoming IPOs in this week and coming weeks are Rosmerta Digital, NTPC Green, Avanse Financial and Nisus Finance.

The Current active IPO are  Mangal Compusolution, Black Buck, and Onyx Biotec.

For more insights into financial trends , visit our Top News Headlines. You can also explore investment opportunities in the market and apply for upcoming IPOs through our Best IPO to Apply Now section.