Swastika Castal Limited, a renowned name in the aluminium casting industry, has successfully concluded its Initial Public Offering (IPO) with a subscription of 4.87 times on the final day, July 23, 2025. The company’s journey from a visionary start-up to a state-of-the-art manufacturing facility based in Gujarat, India, reflects its focus on precision, quality, and innovation in serving both domestic and international markets.

The Swastika Castal IPO is a Fixed Price Issue of ₹14.07 Crores, comprising a fresh issue of 21.64 lakh equity shares at a price of ₹65 per share. The IPO opened on July 21, 2025, and closed on July 23, 2025. With the allotment scheduled for July 24, 2025, the shares are expected to be listed on the BSE SME platform on or around Monday, July 28, 2025.

Company Overview:

Swastika Castal has emerged as a pioneer in the aluminium casting sector, continually setting new industry standards. Under the leadership of promoters Varun Sharda and Indra Sharda, the company has grown with a vision to provide top-tier aluminium components across various sectors.

• Varun Sharda, with 18 years of experience in aluminium casting, has been instrumental in steering the company’s growth and ensuring operational excellence.

• The company’s product line and services cater to both OEMs (Original Equipment Manufacturers) and aftermarket needs, with a strong emphasis on innovation, consistency, and international quality benchmarks.

Financial Performance:

The company has demonstrated consistent financial growth over the last three financial years, establishing itself as a financially sound player in the casting industry.

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

These numbers reflect a strong improvement in profitability and operational efficiency, especially in FY25.

Valuation Metrics:

At the IPO price of ₹65 per share, the market capitalisation of Swastika Castal stands at ₹53.06 Crores. Here are some crucial valuation indicators:

• Pre-Issue EPS (FY24): ₹4.39

• Post-Issue EPS (FY24): ₹3.32

• Pre-Issue P/E Ratio: 14.80x

• Post-Issue P/E Ratio: 20.14x

• Industry P/E Ratio: 23x

• ROCE (FY24): 32.74%

• ROE (FY24): 28.17%

• RoNW: 24.70%

Despite the valuation being moderately priced, the post-issue dilution affects the EPS and P/E ratios, pushing them higher than the industry average.

IPO Structure and Lot Size:

The IPO has been structured with a lot size of 2,000 shares, and the minimum investment required is 2 lots (4,000 shares), which equals ₹2,60,000. This high entry barrier restricts retail investor participation to High Net-Worth Individuals (HNIs) and investors with larger capital pools.

Subscription and Market Sentiment:

As per data available till 7:00 PM on July 23, 2025, the Swastika Castal IPO was subscribed 4.87 times, reflecting a moderate level of investor interest. The subscription was mainly driven by retail and NII categories, as Qualified Institutional Buyers (QIBs) showed limited engagement due to the IPO size and sector positioning.

Grey Market Premium (GMP):

As of July 19, 2025, the Grey Market Premium for Swastika Castal IPO was reported at ₹0, suggesting no premium or expected listing gain. This neutral sentiment is largely due to:

• Absence of significant anchor investment,

• Fixed pricing format,

• Limited trading sentiment in the SME IPO grey market.

Investors are advised to treat GMP as purely speculative, and not to base investment decisions solely on it.

Registrar, Book Runner, and Market Maker:

• Book Running Lead Manager: Horizon Management Private Limited

• Registrar: Accurate Securities & Registry Private Limited

• Market Maker: Horizon Financial Consultants Private Limited

These institutions are responsible for facilitating the IPO process, ensuring compliance with SEBI regulations, and providing post-listing liquidity.

Utilisation of Proceeds:

Swastika Castal plans to use the net proceeds from the IPO for the following objectives:

1. Capital Expenditure (Capex) – ₹500.00 Lakhs for Plant & Machinery and Construction of Shed & Building

2. Working Capital Requirements – ₹550.00 Lakhs

3. General Corporate Purpose – ₹159.68 Lakhs

The focus on Capex and working capital reflects the company’s intent to expand production capabilities and improve operational cash flows.

Allotment and Listing Process:

The Swastika Castal IPO allotment date is scheduled for Thursday, July 24, 2025. Investors can check their allotment status through the registrar's website:

• Go to IPO allotment status page

• Select Swastika Castal Limited IPO from the dropdown

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

• Click Submit to view allotment

Once allotted, the shares will be credited to the Demat account, and the listing on BSE SME is expected on Monday, July 28, 2025.

IPO Review and Investment Recommendation:

Swastika Castal has shown consistent financial performance, a focused business model, and strong leadership. However, the lack of grey market momentum and a fixed price IPO structure have kept listing expectations modest. Given that the GMP is at ₹0, and the post-issue P/E is above 20x, the stock might not provide significant listing gains.

Thus, investors looking for listing benefits are advised to avoid the IPO. However, those with a long-term investment horizon and a belief in the aluminium casting sector may consider this as a sectoral bet post-listing, after observing initial market trends.

Disclaimer:

The information presented is for educational and informational purposes only and should not be construed as investment advice. Investors must consult registered financial advisors before making any investment decisions. The data used herein is derived from publicly available sources and reflects the market scenario as of the publication date. Investing in securities is subject to market risks—read all related documents carefully before investing.

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