The Saraswati Saree Depot Limited initial public offering (IPO) has made a notable debut in the Indian primary market, opening for subscription on Monday, 12 August 2024. As the bidding commenced, the IPO saw a promising start, with the public issue being subscribed 0.45 times by 10:48 AM on the first day. This early momentum includes a 1.03 times subscription in the retail portion, while the Non-Institutional Investors (NII) segment saw a subscription of 0.62 times. The subscription window will remain open until Wednesday, 14 August 2024, giving investors ample opportunity to participate.

The company has set an IPO price band between ₹152 to ₹160 per equity share, which reflects its strategic pricing aimed at attracting a broad base of investors. With a grey market premium (GMP) of ₹34 on the opening day, there is significant positive sentiment around the IPO, suggesting potential for gains upon listing. The GMP indicates that shares of Saraswati Saree Depot are trading at a premium in the unofficial market, which often serves as an early indicator of the IPO’s market performance.

Saraswati Saree Depot, a well-established player in the women's apparel industry, is proposing to raise ₹160.01 crore through this IPO. Of this, ₹104 crore is aimed at funding fresh share issues, while the remaining ₹56.01 crore is reserved for an Offer for Sale (OFS) by existing shareholders. The fresh capital is expected to be utilized for working capital requirements, expansion plans, and other general corporate purposes, positioning the company for sustained growth.

Detailed IPO Information:

Saraswati Saree Depot IPO GMP: The shares are currently available at a ₹34 premium in the grey market, indicating robust demand and potential for listing gains.

Saraswati Saree Depot IPO Price Band: The company has set a price band of ₹152 to ₹160 per equity share, offering a value proposition that balances market interest with growth potential.

IPO Subscription Dates: The IPO is open for bidding from 12 to 14 August 2024. Investors can place their bids within this three-day window.

IPO Size: The total issue size is ₹160.01 crore, with ₹104 crore through fresh share issues and ₹56.01 crore via an Offer for Sale (OFS).

IPO Lot Size: Investors can bid in lots, with each lot comprising 90 shares. This lot size is designed to make the IPO accessible to retail investors.

IPO Allotment Date: The share allocation is expected to be finalized by Friday, 16 August 2024.

IPO Registrar: Bigshare Services Private Limited has been appointed as the official registrar for the IPO, responsible for managing the share allocation process.

IPO Listing Date: Following the 'T+3' listing rule, the IPO is expected to list on the stock exchanges on Tuesday, 20 August 2024.

IPO Lead Manager: Unistone Capital Private Limited is serving as the lead manager for this IPO, guiding the company through the public offering process.

IPO Review and Analyst Recommendations:

The Saraswati Saree Depot IPO has garnered positive reviews from market analysts. Akriti Mehrotra, Research Analyst at StoxBox, has given the IPO a 'subscribe' rating, citing the company’s strong position in the B2B saree wholesale market. Saraswati Saree Depot's focus on sarees, coupled with its successful diversification into other apparel segments such as kurtis, dress materials, and men's suits, has driven significant revenue and profitability growth. The company’s strategic initiatives in inventory management, expansion into men's ethnic wear, and an emerging e-commerce platform are expected to further fuel growth.

The IPO is attractively priced with a P/E ratio of 17.9x based on FY24 earnings, making it an appealing option for investors with a medium to long-term investment horizon. The company’s consistent financial performance, with total sales growing from INR 4,094 million in FY21 to over INR 6,000 million in FY24, underscores its strong market presence and growth trajectory.

Ventura Securities has also assigned a 'subscribe' rating, highlighting the company's impressive growth in Profit After Tax (PAT), which increased from **INR 34.51 million in FY14 to INR 126.12 million in FY21, reflecting a CAGR of 20.34%. This strong financial foundation, combined with the capital raised through the IPO, positions Saraswati Saree Depot for further expansion and market dominance.

Overall, the Saraswati Saree Depot IPO presents a compelling investment opportunity in the women's apparel sector, with strong financials, strategic growth initiatives, and positive market sentiment as key factors driving investor interest. Investors are encouraged to consider subscribing to the IPO, particularly those looking for a medium to long-term investment in a well-established and growing company.

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