The Rs 170 crore initial public offering (IPO) of Aastha Spintex entered its second day of bidding on Tuesday with the Grey Market Premium (GMP) hovering around 4%, indicating a modest listing premium if prevailing market sentiment remains intact. Based on the current GMP, the shares are estimated to list at around Rs 141, compared with the upper price band of Rs 136.
The IPO witnessed a steady response on the opening day, with the issue subscribed 88% overall. Investors bid for 1.19 crore shares against the 1.36 crore shares on offer. The Retail Individual Investors (RII) segment was subscribed 41%, with bids received against the 54.40 lakh shares reserved for the category.
The Rs 170 crore public issue is a fresh issue of equity shares, with no offer-for-sale (OFS) component. The IPO is priced in the range of Rs 125-136 per share and will remain open for subscription until July 1. The company's shares are proposed to be listed on the BSE and NSE.
The company intends to use the IPO proceeds to acquire Falcon Yarns, meet its working capital requirements, and fund general corporate purposes.
Aastha Spintex IPO GMP Today
The Grey Market Premium (GMP) for Aastha Spintex IPO is hovering around 4%, indicating the potential for modest listing gains if current market sentiment remains favourable. Based on the prevailing GMP, the shares are estimated to list at around Rs 141, compared with the IPO's upper price band of Rs 136.
Disclaimer: GMP (Grey Market Premium) is an unofficial market indicator based on trading in the grey market. It is not an official price and should not be considered a guarantee of the stock's listing performance.
Aastha Spintex IPO Subscription Status
The Aastha Spintex IPO received a healthy response on the first day of bidding, with the issue subscribed 88% overall. Investors placed bids for 1.19 crore shares against the 1.36 crore shares on offer.
Retail Individual Investors (RIIs): The retail portion was subscribed 42%, with bids received for 22.51 lakh shares against the 54.40 lakh shares reserved for the segment.
Non-Institutional Investors (NIIs): The NII category witnessed the strongest demand, getting subscribed 1.38 times. Investors bid for 74.97 lakh shares against the 54.40 lakh shares allocated to the segment.
Qualified Institutional Buyers (QIBs): The QIB portion was subscribed 80%, with bids for 21.69 lakh shares against the 27.20 lakh shares earmarked for institutional investors.
Gujarat-based Aastha Spintex is engaged in the manufacturing of cotton spun yarn and operates an integrated spinning facility in Halvad. The company's product portfolio includes carded, combed and compact cotton yarn, catering to the weaving, knitting, hosiery and garment manufacturing industries across domestic as well as international markets.
On the financial front, Aastha Spintex has delivered robust growth over the past three financial years. Its total income increased to Rs 352.2 crore in FY25 from Rs 239.7 crore in FY23, while net profit surged to Rs 22.9 crore from Rs 1.1 crore during the same period. The company reported a return on equity (RoE) of 12.8%, with the IPO priced at a P/E multiple of around 18.8x FY25 earnings.
A key growth driver is the proposed acquisition of Falcon Yarns, which is expected to expand the company's annual spinning capacity from nearly 7,700 metric tonnes (MT) to 17,457 MT, strengthening its production capabilities and supporting future revenue growth.
Despite its growth prospects, the company faces certain risks, including volatility in cotton prices, reliance on a single manufacturing facility, and customer concentration through a major reseller outside Gujarat. In the long run, increasing demand for synthetic fibres could also impact the cotton yarn business.
Swastika Investmart has recommended a "Subscribe" rating for investors with a medium- to long-term investment horizon. According to the brokerage, the proposed acquisition of Falcon Yarns is likely to more than double the company's spinning capacity, creating a strong platform for future growth.
The brokerage also highlighted Aastha Spintex's improving profitability and its focus on renewable energy. Nearly 80% of the company's energy requirements are met through solar and wind power, a move expected to lower production costs and improve operational efficiency. At a valuation of around 18.8x FY25 earnings, Swastika Investmart believes the IPO is reasonably priced considering the company's growth potential.
