Nikita Papers Limited is a leading manufacturer of recycled kraft paper, leveraging cutting-edge technology to provide sustainable paper solutions. With a firm commitment to environmental preservation, the company manufactures kraft paper entirely from 100% recycled waste paper, serving customers both locally and internationally. Their mission is to innovate continuously, creating high-quality kraft paper products that support global sustainability goals.

IPO Details and Timeline

Nikita Papers is launching a Book Built Issue IPO amounting to ₹ 67.53 Crores, comprising a fresh issue of 64.94 lakh equity shares. The subscription period opens on May 27, 2025, and closes on May 29, 2025. The IPO shares are proposed to be listed on the NSE SME platform, with allotment expected around May 30, 2025, and listing tentatively scheduled for June 3, 2025.

The price band is fixed between ₹ 95 to ₹ 104 per share, with a lot size of 1,200 shares. Retail investors need to invest a minimum of ₹ 1,24,800, while High-Net-Worth Individuals (HNIs) must subscribe to a minimum of 2 lots, amounting to ₹ 2,49,600. At the upper price band, the company’s market capitalization is estimated at ₹ 256.54 Crores.

The IPO is managed by FAST TRACK FINSEC PRIVATE LIMITED as the Book Running Lead Manager, with SKYLINE FINANCIAL SERVICES PRIVATE LIMITED acting as the registrar. Rikhav Securities Limited serves as the Market Maker.

Financial Performance Snapshot

Nikita Papers demonstrates steady financial growth over recent years:

Key financial metrics for FY24 highlight a pre-issue EPS of ₹ 9.81 and post-issue EPS of ₹ 6.73. The pre-issue P/E ratio is 10.60x, which expands to 15.46x post-issue, compared to an industry P/E of approximately 22x. Return metrics indicate a ROCE of 28.71% and ROE of 21.45%, showcasing efficient capital use and profitability. The annualized EPS stands at ₹ 11.50 with a P/E of 9.03x, reflecting attractive valuation levels.

IPO Subscription and Anchor Investors

As of May 28, 2025 (second day of subscription), the IPO is subscribed 0.89 times, signaling moderate investor interest.

The company has successfully raised ₹ 19.24 Crores from Anchor Investors at the upper price band of ₹ 104 per share, allotting 18,50,400 shares in the Qualified Institutional Buyers (QIBs) category.

Grey Market Premium (GMP) and Listing Gains

The Grey Market Premium is estimated at ₹ 8, suggesting a potential listing price of ₹ 112, which indicates a possible listing gain of around 8.32%. However, investors should note that GMP is unofficial and based on unregulated market demand and supply, hence not a guaranteed indicator.

IPO Objectives

The company intends to deploy the IPO proceeds towards:

1. Capital expenditure of ₹ 50 Crores for setting up a power plant.

2. Working capital requirements of ₹ 5 Crores.

3. General corporate purposes.

4. Issue expenses.

Management and Industry Position

Under the leadership of Mr. Ashok Kumar Bansal, with over 35 years in the industry and 25 years specifically in paper manufacturing, Nikita Papers is well-positioned for sustainable growth. The company’s focus on environment-friendly recycled paper products aligns with global trends favoring sustainability and eco-conscious production.

Conclusion

Nikita Papers Limited IPO offers investors an opportunity to participate in a growing, environmentally conscious company with solid financials, a competitive valuation, and promising listing gains. While the IPO subscription pace is currently moderate, the participation of strong anchor investors and a favorable GMP suggest positive market sentiment. Risk-tolerant investors looking for exposure to the recycled paper sector may consider applying.

The Upcoming IPOs in this week and coming weeks are 3B Films, Victory Electric Vehicles International, Wagons Learning.

The Current active IPO are N R Vandana Tex Industries, Scoda Tubes, Neptune Petrochemicals, Blue Water Logistics, Astonea Labs, Nikita Papers, Prostarm Info Systems, Aegis Vopak Terminals, Schloss Bangalore.

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.