Nikita Papers Limited, a prominent name in the manufacture of recycled kraft paper, is set to launch its Initial Public Offering (IPO) from May 27, 2025 to May 29, 2025. The company stands out in the paper industry by producing high-quality kraft paper using 100% recycled waste paper, aiming to promote sustainability through innovation and environmentally conscious manufacturing processes. Their focus on cutting-edge technology allows them to serve both local and international markets, making them a leader in this niche segment.

IPO Overview

The Nikita Papers IPO is a Book Built Issue with a total size of ₹67.53 Crores, fully comprising a fresh issue of 64.94 lakh shares. The IPO is priced in the band of ₹95 to ₹104 per equity share. Upon listing at the upper price band, the company’s market capitalization will reach approximately ₹256.54 Crores.

The IPO will be listed on the NSE SME platform, targeting investors interested in the small and medium enterprises segment. The lot size for retail investors is set at 1,200 shares, meaning a minimum investment of ₹1,24,800. High Net Worth Individuals (HNIs) must apply for a minimum of 2 lots (2,400 shares), requiring an investment of ₹2,49,600 or more.

Key Dates

• Subscription Period: May 27 to May 29, 2025

• Allotment Date: Expected on or about May 30, 2025 (Friday)

• Tentative Listing Date: On or about June 3, 2025 (Tuesday)

Stakeholders Involved

• Book Running Lead Manager: Fast Track Finsec Private Limited

• Registrar to the Issue: Skyline Financial Services Private Limited

• Market Maker: Rikhav Securities Limited

Grey Market Premium (GMP) Status

The Grey Market Premium for Nikita Papers IPO is ₹0, indicating no expected premium or discount in unofficial trading before the official listing. This reflects the market’s neutral stance based on the company’s financial health and IPO pricing. Investors should note that GMP figures are unofficial and should not guide investment decisions but serve informational purposes only.

Anchor Investors Subscription

The company raised approximately ₹19.24 Crores from Anchor Investors at ₹104 per share prior to the IPO opening. Around 18,50,400 shares were allotted to these qualified institutional buyers (QIBs), ensuring a strong institutional backing for the issue. Anchor investor allocations come from the QIB portion and help instill confidence among retail and other investors.

Financial Performance Highlights

Nikita Papers has demonstrated steady financial growth over the past few years:

• Revenue from Operations: ₹35,848.57 Lakh (FY22), ₹40,130.91 Lakh (FY23), ₹34,678.28 Lakh (FY24), and ₹27,238.28 Lakh (for the nine months ending Dec 31, 2024)

• EBITDA: ₹2,962.20 Lakh (FY22), ₹3,055.80 Lakh (FY23), ₹4,840.04 Lakh (FY24), ₹4,380.46 Lakh (nine months ending Dec 2024)

• Profit After Tax: ₹695.21 Lakh (FY22), ₹864.52 Lakh (FY23), ₹1,659.53 Lakh (FY24), ₹1,568.11 Lakh (nine months ending Dec 2024)

These figures reflect strong operational efficiency and profitability, supported by a return on capital employed (ROCE) of 28.71% and return on equity (ROE) of 21.45% in FY24.

Valuation Metrics

• 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 P/E average: Approximately 22x

• Annualized EPS: ₹11.50 with a P/E ratio of 9.03x based on the latest financial data

These metrics suggest that Nikita Papers is priced reasonably in comparison to the industry average, with room for growth but not offering an immediate significant listing gain.

Use of IPO Proceeds

The funds raised through the IPO will be utilized for:

1. Setting up a power plant with a capital expenditure of ₹50 Crores, aiding in energy efficiency and cost reduction.

2. Fulfilling the company’s working capital requirements with an allocation of ₹5 Crores.

3. Meeting general corporate purposes and covering issue expenses.

Management and Leadership

The company is led by Mr. Ashok Kumar Bansal, a seasoned professional with over 35 years of experience, including 25 years specifically in the paper industry. His leadership is a significant positive for investors looking for strong governance and industry expertise.

IPO Review and Recommendation

Nikita Papers IPO offers a chance to invest in a sustainable paper manufacturing business that embraces environmental consciousness and innovation. The company’s steady financial performance, reasonable valuation, and clear growth plans are encouraging. However, the Grey Market Premium stands at zero, indicating no expected listing gains.

Investors looking for quick listing profits may want to avoid this IPO. Those interested in the paper industry and sustainability-driven companies might consider this IPO for long-term value, provided they are comfortable with the SME segment risks.

How to Check IPO Allotment Status:

• Visit the registrar's IPO allotment page after May 30, 2025.

• Select "Nikita Papers Limited IPO" from the dropdown menu.

• Enter your application number, PAN, or DP Client ID.

• Submit the details to view your allotment status instantly.

The Upcoming IPOs in this week and coming weeks are 3B Films, N R Vandana Tex Industries, Scoda Tubes,Neptune Petrochemicals, Astonea Labs, Nikita Papers, Prostarm Info Systems, Victory Electric Vehicles International, Blue Water Logistics, Wagons Learning..

The Current active IPO are Aegis Vopak Terminals, Schloss Bangalore, Unified Data - Tech Solutions.

Start your Stock Market Journey and Apply in IPO by Opening Free Demat Account in Choice Broking FinX.

Join our Trading with CA Abhay Telegram Channel for regular Stock Market Trading and Investment Calls by CA Abhay Varn - SEBI Registered Research Analyst.