Nikita Papers Limited, a prominent manufacturer in the recycled kraft paper industry, has announced its initial public offering (IPO) of ₹ 67.53 Crores, entirely through a fresh issue of 64.94 lakh shares. This IPO opens for subscription from May 27 to May 29, 2025, offering investors a chance to participate in a company committed to environmental sustainability by producing kraft paper from 100% recycled waste paper. The company is known for its innovative use of cutting-edge technology, catering to both domestic and international markets.

IPO Details and Price Band

The Nikita Papers IPO is a book-built issue, priced between ₹ 95 and ₹ 104 per equity share. At the upper price band of ₹ 104, the company’s market capitalization will stand at approximately ₹ 256.54 Crores. Investors can apply in lots of 1,200 shares, with retail investors required to invest a minimum of ₹ 1,24,800, while High-Net-Worth Individuals (HNIs) must apply for a minimum of 2 lots, amounting to ₹ 2,49,600. The shares will be listed on the NSE SME platform, with the expected allotment date set for May 30, 2025, and the tentative listing date on or around June 3, 2025.

Lead Managers and Registrar

The book running lead manager for the IPO is FAST TRACK FINSEC PRIVATE LIMITED, while SKYLINE FINANCIAL SERVICES PRIVATE LIMITED serves as the registrar. Rikhav Securities Limited is appointed as the market maker, ensuring liquidity post-listing.

Grey Market Premium (GMP) Analysis

The IPO’s Grey Market Premium currently stands at around ₹ 8, reflecting an approximate 8.32% premium over the upper price band. However, it is crucial to note that GMP operates in an unregulated market and should only be used for informational purposes as actual trading prices on the stock exchange may vary.

Subscription Status and Anchor Investors

On the first day of the subscription (May 27, 2025), the IPO was subscribed 0.14 times by 10:30 AM. The company successfully raised ₹ 19.24 Crores from anchor investors, who were allocated 18,50,400 equity shares at ₹ 104 per share, under the Qualified Institutional Buyers (QIBs) category.

Financial Performance Overview

Nikita Papers has demonstrated steady financial growth over recent years:

• Revenue from operations: ₹ 27,238.28 Lakh for the period ending December 31, 2024, with prior fiscal years showing ₹ 34,678.28 Lakh (2024), ₹ 40,130.91 Lakh (2023), and ₹ 35,848.57 Lakh (2022).

• EBITDA: ₹ 4,380.46 Lakh (period ended Dec 2024), ₹ 4,840.04 Lakh (FY 2024), ₹ 3,055.80 Lakh (2023), and ₹ 2,962.20 Lakh (2022).

• Profit After Tax (PAT): ₹ 1,568.11 Lakh (period ended Dec 2024), ₹ 1,659.53 Lakh (FY 2024), ₹ 864.52 Lakh (2023), and ₹ 695.21 Lakh (2022).

The company’s leadership under Mr. Ashok Kumar Bansal, who brings over 35 years of industry expertise, adds to investor confidence.

Key Financial Ratios and Valuation

• Pre-issue EPS: ₹ 9.81

• Post-issue EPS: ₹ 6.73

• Pre-issue P/E ratio: 10.60x

• Post-issue P/E ratio: 15.46x (industry average: 22x)

• Return on Capital Employed (ROCE): 28.71% (FY24)

• Return on Equity (ROE): 21.45% (FY24)

The financial metrics indicate that the IPO is priced attractively compared to the industry benchmark, with potential for healthy returns.

Objectives of the IPO Proceeds

Nikita Papers plans to use the IPO funds primarily for:

• Capital expenditure on setting up a power plant with ₹ 50 Crores allocated.

• Meeting working capital requirements of ₹ 5 Crores.

• General corporate purposes and IPO-related expenses.

How to Check IPO Allotment Status

Investors can check their allotment status online from May 30, 2025, via the registrar’s website by entering their application number, PAN, or DP Client ID. This helps investors promptly confirm their share allotment and plan their next steps.

Final Thoughts and Recommendation

Nikita Papers IPO represents an investment opportunity in the sustainable packaging and paper industry, a sector growing due to increased environmental awareness and demand for eco-friendly products. With strong financials, experienced leadership, and attractive valuation, the IPO is recommended for risk-tolerant investors seeking potential listing gains. The current Grey Market Premium reflects positive market sentiment, but investors should consider the full financial picture and their risk appetite.

The Upcoming IPOs in this week and coming weeks are 3B Films, N R Vandana Tex Industries, Scoda Tubes,Neptune Petrochemicals, Victory Electric Vehicles International, Wagons Learning.

The Current active IPO are Blue Water Logistics, Astonea Labs, Nikita Papers, Prostarm Info Systems, Aegis Vopak Terminals, Schloss Bangalore.

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