Neelam Linens and Garments India Limited, a pioneering company in the high-thread-count bedding sector, launched its Initial Public Offering (IPO) on November 08, 2024. As India's first company to introduce luxurious, high-thread-count bedding comparable to global standards, Neelam Linens is making strides in the Indian textile industry by meeting the demand for quality bedding that has long been a status symbol in Western countries.

The Neelam Linens IPO, a book-built issue worth ₹13 crore, consists of a fresh issue of 54.18 lakh equity shares. The subscription window for the IPO opened on November 08, 2024, and concluded on November 12, 2024, with robust investor participation leading to a final subscription of 17.32 times.

IPO Details and Pricing

The share price band for the Neelam Linens and Garments IPO is set at ₹20 to ₹24 per equity share. If fully subscribed at the upper band, the market capitalization of the company would stand at approximately ₹48.52 crore. Investors interested in participating in the IPO were required to invest in lots of 6,000 shares, making the minimum investment ₹1,44,000 for retail investors and ₹2,88,000 for high-net-worth individuals (HNIs).

The IPO's allotment date is scheduled for November 13, 2024, with the expected listing on the NSE SME platform on November 18, 2024.

Key Players in the IPO

EXPERT GLOBAL CONSULTANTS PRIVATE LIMITED serves as the Book Running Lead Manager (BRLM), while PURVA SHAREGISTRY (INDIA) PRIVATE LIMITED is the registrar for the issue. Globalworth Securities Limited has been appointed as the market maker to ensure liquidity and stability in trading for Neelam Linens’ shares on the NSE SME.

Grey Market Premium and Market Perception

The Grey Market Premium (GMP) for Neelam Linens IPO is currently ₹0, reflecting limited speculative interest in the unorganized market. While GMP often indicates investor sentiment, its lack in this case may be attributed to the company's financial performance, resulting in a cautious stance among grey market traders.

Investors should note that GMP is an unregulated metric and often fluctuates based on demand and supply in the grey market. It should not be considered a reliable predictor of post-listing performance.

IPO Subscription Status and Anchor Investors

As of 2:00 PM on the final subscription day, the Neelam Linens IPO had been subscribed 17.32 times. This strong demand indicates robust interest from both retail and institutional investors, positioning the company well for a successful listing.

Additionally, Neelam Linens raised ₹3.68 crore from anchor investors at ₹24 per share, allocating 15,36,000 equity shares to these strategic stakeholders. The anchor investor involvement provides initial capital and adds credibility to the issue.

How to Check IPO Allotment Status

The IPO allotment for Neelam Linens and Garments will be finalized on November 13, 2024. Investors can check their allotment status through the registrar’s website using the following steps:

1. Visit the IPO allotment status page on the registrar’s website.
2. Select "Neelam Linens and Garments Limited IPO" from the list.
3. Enter application details such as Application Number, PAN, or DP Client ID.
4. Submit the details to view allotment status.

This simple process allows investors to confirm their allotment and make informed decisions about their next steps.

Financial Performance and Valuation

Neelam Linens reported steady growth in revenues, with ₹10,474.42 lakh in FY2024, ₹10,541.13 lakh in FY2023, and ₹10,379.68 lakh in FY2022. EBITDA increased consistently over these years, reaching ₹781.11 lakh in FY2024. However, net profits showed slight fluctuation, with ₹246.05 lakh in FY2024, ₹237.87 lakh in FY2023, and ₹298.57 lakh in FY2022.

For this IPO, the company's pre-issue EPS is ₹0.51 and the post-issue EPS is ₹0.45, indicating high valuations with pre-issue and post-issue P/E ratios at 145.09x and 164.44x, respectively. In comparison, the industry average P/E ratio is 38.60x, suggesting that the IPO may be fully priced. The company’s ROCE and ROE for FY2024 stand at 13.69% and 5.68%, respectively, which are moderate indicators of profitability.

Objectives of the IPO

The proceeds from the IPO will primarily be utilized for:

1. ₹557.41 lakh towards capital expenditure for purchasing embroidery machines for expansion.
2. ₹400 lakh for the prepayment or repayment of certain outstanding borrowings.
3. Remaining funds for general corporate purposes to support the company’s growth and operational needs.

Investment Recommendation

Given the company's valuation metrics and the lack of significant Grey Market Premium, Neelam Linens and Garments IPO may not provide substantial listing gains. Despite the company's unique positioning as a high-thread-count bedding manufacturer, the current valuation appears high relative to industry standards, which could limit potential upside for short-term investors.

For long-term investors, the decision to invest should consider Neelam Linens’ financial stability, moderate profit margins, and expansion potential in India’s luxury bedding market. However, due to the elevated P/E ratio and moderate ROE, cautious investors may choose to wait and observe the company’s post-listing performance before committing capital.

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

The Current active IPO are  Neelam Lines and Garments and Mangal Compusolution.

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.