Neelam Linens and Garments India Limited has entered the Indian stock market with a unique IPO focused on expanding India’s first high-thread count bedding production, aiming to meet global luxury bedding standards. Known for its luxurious, high-thread count bedding, Neelam Linens brings a product quality long associated with Western countries as a hallmark of status and comfort. This Book Built Issue raises ₹13 Crores, with shares offered entirely as a Fresh Issue totaling 54.18 Lakh Shares. The IPO opens on November 8, 2024, and closes on November 12, 2024, with allotments finalized by November 13, 2024, and listing on the NSE SME anticipated around November 18, 2024.

The IPO’s price band is set between ₹20 and ₹24 per share, giving Neelam Linens a market cap of ₹48.52 Crores if priced at the upper band. Investors can subscribe with a lot size of 6,000 shares, with a minimum investment of ₹1,44,000 for retail buyers and ₹2,88,000 for High-Net-Worth Individuals (HNIs). This significant investment level reflects Neelam Linens’ growth ambitions, positioning itself as India’s pioneer in premium bedding, backed by leading promoters Kantilal Jethva and Bhavin Jethwa.

Objectives of Neelam Linens and Garments Limited IPO
Funds raised will be directed towards the following:

1. Embroidery Machine Purchase: ₹557.41 Lakhs will be allocated to acquire advanced embroidery machines to bolster Neelam Linens’ production capacity.
2. Debt Repayment: ₹400.00 Lakhs will go towards prepaying or repaying outstanding borrowings, enhancing the company’s financial position.
3. General Corporate Purposes: Remaining funds will support general corporate expenses, further aiding Neelam Linens’ growth trajectory.

With Expert Global Consultants Private Limited as the book-running lead manager and Purva Sharegistry (India) Private Limited as the registrar, Globalworth Securities Limited will act as the market maker for this IPO.

Neelam Linens and Garments IPO Financial Overview

Neelam Linens’ recent revenue performance shows steady numbers, with revenues for FY2024, FY2023, and FY2022 at ₹10,474.42 Lakhs, ₹10,541.13 Lakhs, and ₹10,379.68 Lakhs, respectively. EBITDA was ₹781.11 Lakhs for FY2024, showing improvement over previous fiscal years, with Profit after Tax (PAT) at ₹246.05 Lakhs in FY2024, ₹237.87 Lakhs in FY2023, and ₹298.57 Lakhs in FY2022.

Investment Metrics and Market Pricing

For this IPO, Neelam Linens issues shares with a pre-issue EPS of ₹0.51 and a post-issue EPS of ₹0.45, resulting in a pre-issue P/E ratio of 145.09x and a post-issue P/E ratio of 164.44x. Against an industry P/E of 38.60x, Neelam Linens’ IPO appears fully priced. Return on Equity (RoE) is moderate at 5.68% for FY2024, reflecting room for growth as the company expands.

Neelam Linens IPO Grey Market Premium (GMP)

Currently, the Grey Market Premium for Neelam Linens stands at ₹0, indicating limited speculative trading or expected gains ahead of the official listing. Given its unique positioning and modest financial growth, investor interest may primarily be for long-term value rather than immediate returns. This IPO’s GMP serves mainly for educational purposes, with real pricing likely to be determined upon official listing.

Live Subscription Status and Anchor Investor Engagement

On November 11, 2024, the IPO’s live subscription reached 4.26 times, signaling positive interest as of its second day. Anchor investors have also shown support, with Neelam Linens raising ₹3.68 Crores through these investors at a share price of ₹24. 15,36,000 equity shares were allocated to anchor investors, reflecting institutional confidence in Neelam Linens’ potential.

To check allotment status for Neelam Linens IPO on November 13, 2024, follow these steps:

• Go to the registrar’s IPO allotment status page.
• Choose “Neelam Linens and Garments Limited IPO” from the dropdown.
• Enter your application number, PAN, or DP Client ID, then submit.

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This IPO provides investors an opportunity to participate in a luxury segment previously untapped within the Indian market, allowing Neelam Linens to capitalize on growing demand for high-quality bedding. While growth prospects are promising, financial metrics suggest a cautious approach for those seeking immediate returns. As with any IPO, assessing personal financial goals and market timing will be essential for making an informed decision.