Swastika Castal Limited, a pioneer in the aluminium casting industry, has successfully completed its Initial Public Offering (IPO) with a final subscription of 4.87 times. The fixed price issue of ₹14.07 crores was open for subscription from July 21 to July 23, 2025, and is now preparing for its listing on BSE SME, scheduled for July 28, 2025.

The IPO comprised a fresh issue of 21.64 lakh shares at a fixed price of ₹65 per share. The total market capitalisation at the IPO price stands at ₹53.06 crores. The lot size for the IPO was 2,000 shares, and individual investors had to apply for at least 2 lots, translating to ₹2,60,000.

Company Profile

Swastika Castal is a Gujarat-based manufacturer known for its high-quality aluminium casting solutions. From humble beginnings, the company has evolved into a state-of-the-art facility that caters to both Indian and global markets.

The company specialises in precision aluminium casting, delivering products with high dimensional accuracy and surface finish. Its operations support a range of industries including automotive, industrial equipment, electrical components, and more.

The promoters, Varun Sharda and Indra Sharda, bring a combined experience of over 18 years in aluminium manufacturing. Their leadership has helped the company achieve significant scale and maintain a strong customer base in both OEM and aftermarket segments.

IPO Objectives

The proceeds of the Swastika Castal IPO will be used for the following purposes:

• ₹500 lakhs for capital expenditure, including the purchase of plant & machinery and construction of new shed and building

• ₹550 lakhs towards working capital requirements, enabling the company to meet increased demand

• ₹159.68 lakhs for general corporate purposes, allowing financial flexibility

This investment is expected to expand operational capabilities and support the company's growth strategy over the next few years.

Financial Performance

Swastika Castal has shown steady financial growth, with year-on-year improvements in revenue, EBITDA, and net profit:

• Revenue from operations:

  • FY25: ₹3,031.28 lakh

  • FY24: ₹2,335.46 lakh

  • FY23: ₹2,441.34 lakh

• EBITDA:

  • FY25: ₹520.62 lakh

  • FY24: ₹256.51 lakh

  • FY23: ₹240.64 lakh

• Profit After Tax (PAT):

  • FY25: ₹263.49 lakh

  • FY24: ₹64.98 lakh

  • FY23: ₹58.47 lakh

The company’s Return on Capital Employed (ROCE) for FY24 stands at 32.74%, Return on Equity (ROE) at 28.17%, and Return on Net Worth (RoNW) at 24.70% — robust indicators of financial health and capital efficiency.

Valuation Metrics

Swastika Castal’s pre-issue EPS stands at ₹4.39, while post-issue EPS is ₹3.32. The pre-issue P/E ratio is 14.80x, and post-issue P/E is 20.14x. The industry average P/E is around 23x, suggesting that the IPO is fairly priced but not undervalued.

Given the GMP (Grey Market Premium) of ₹0, it’s clear that investor enthusiasm in the unofficial market has been lukewarm.

IPO Subscription & Allotment

The IPO received moderate interest with an overall subscription of 4.87 times:

• Retail Investors showed decent interest

• Non-institutional Investors (NIIs) and HNI participation remained stable but not aggressive

The IPO allotment is expected to be finalised on July 24, 2025. Applicants can check their allotment status online by visiting the registrar's website and entering their PAN, application number, or DP Client ID.

The registrar for the issue is Accurate Securities & Registry Private Limited, while Horizon Management Private Limited is the book running lead manager. Horizon Financial Consultants Private Limited acts as the Market Maker for this IPO.

Grey Market Premium and Listing Expectations

As of now, the Grey Market Premium (GMP) for Swastika Castal IPO is ₹0, indicating that no significant listing gain is expected. GMP is an unofficial indicator of market sentiment and is subject to change, but in this case, it has remained flat since announcement.

Many analysts have advised caution, especially for those looking for short-term gains. While the company has strong financials, the lack of GMP movement and moderate subscription levels suggest a muted debut on the stock exchange.

Analyst Recommendations

Given the stable fundamentals, fair valuations, and solid industry track record, long-term investors may consider monitoring the stock post-listing for better entry opportunities.

However, for investors targeting listing gains, the recommendation is to avoid the IPO for short-term returns, as the zero GMP and relatively low oversubscription don’t support a strong opening price.

Conclusion

Swastika Castal Limited has successfully completed its IPO process, with moderate subscription and a strong business foundation in the aluminium casting segment. While listing gains are unlikely, the company’s operational performance, growth plans, and efficient capital structure make it a worthwhile candidate for long-term investors who are looking to diversify into manufacturing and industrials.

As with all SME investments, risk appetite, investment horizon, and company tracking remain critical. Investors should wait for the listing on July 28, 2025, and then evaluate based on market reaction, trading volume, and quarterly performance updates.

Would you like a similar deep-dive report post listing with real-time market performance and expert sentiment?

Disclaimer: This review is for informational purposes only. It should not be construed as investment advice. Investors must consult their financial advisors before investing. Past performance is not indicative of future results. Investment in securities is subject to market risks.

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