After drawing healthy investor interest during its IPO, Aastha Spintex is all set to make its stock market debut on July 6, with grey market trends pointing to a modest start rather than a bumper listing.
The Rs 170 crore public issue has been commanding a grey market premium (GMP) of around 2% ahead of its listing. If the sentiment holds, the shares could debut near Rs 139, slightly above the IPO's upper price band of Rs 136, signalling a muted listing gain for investors.
The IPO, which was open between June 29 and July 1, witnessed an overall subscription of 4.64 times, reflecting solid demand across investor categories. The NII portion emerged as the strongest, attracting 7.62 times subscription, while QIBs subscribed 3.30 times and the retail quota was booked 2.33 times. The employee segment also received 2.33 times subscription.
Unlike many recent IPOs, Aastha Spintex's issue consisted entirely of fresh equity shares, with no offer-for-sale (OFS) component. The company plans to use the proceeds to acquire Falcon Yarns, strengthen its working capital, and fund general corporate purposes. The stock will be listed on both the BSE and NSE.
Founded in Gujarat, Aastha Spintex manufactures cotton spun yarn from its integrated spinning facility in Halvad. Its products—including carded, combed and compact cotton yarn—serve customers across the weaving, knitting, hosiery and garment manufacturing industries in India and overseas.
The proposed acquisition of Falcon Yarns is expected to be a game changer. It will more than double the company's annual spinning capacity from nearly 7,700 metric tonnes (MT) to 17,457 MT, significantly enhancing its production capabilities and positioning it for future growth.
The company has delivered sharp financial improvement over the past three years. Total income rose to Rs 352.2 crore in FY25 from Rs 239.7 crore in FY23, while net profit jumped to Rs 22.9 crore from just Rs 1.1 crore during the same period. Aastha Spintex reported a return on equity (RoE) of 12.8%, with the IPO valued at around 18.8 times its FY25 earnings.
Risks remain on the radar
While the expansion plans have boosted optimism, investors will also keep an eye on key risks. The company remains exposed to volatile cotton prices, operates from a single manufacturing facility, and has customer concentration through a major reseller outside Gujarat. Over the longer term, rising adoption of synthetic fibres could also pose a challenge to demand for cotton yarn.
