Kalana Ispat SME IPO Launches Today: Check Subscription, GMP and Other Details

Kalana Ispat opened its SME public offering on September 19 and will close on September 23. The company aims to raise ₹32.59 crore as part of the offer and plans to list its shares on the NSE SME platform ₹66 per share.

Kalana Ispat IPO Subscription Status

The IPO saw weak demand. The issue was subscribed 0.05 times till 12:15 pm on Thursday, the first day of bidding. The IPO received bids for 2.44 lakh equity shares against 46.90 lakh shares on offer.

The retail investor segment saw 0.09 times oversubscription, while the non-institutional investor (NII) category saw 0.01 times oversubscription.

About IPO

The Kalana Ispat IPO comprises only a fresh issue of 49.38 lakh shares without an offer for sale component. The company plans to utilise the net proceeds for several key objectives, including capital expenditure for installation of a 4 MW DC and 3.5 MW AC ground-mount solar power plant with TPSAT design. Additionally, the funds will be utilised for setting up a rolling mill at Survey No. 4/1, Taluka Sanand, Mouje Kala village, Ahmedabad, which will involve construction of a factory and acquisition of necessary equipment, machinery and other assets. The remaining amount will be utilised for general corporate purposes, supporting the operational and strategic growth of the company.

Retail investors must apply for a minimum lot size of 2,000 shares, which is an investment of ₹1,32,000. High net worth individuals (HNIs) need to apply for at least two blocks or 4,000 shares with a total value of ₹2,64,000.

The allotment of shares in the IPO is expected to be finalized on Tuesday, September 24, 2024. Meanwhile, the commencement of refunds to investors who were not allotted shares and the crediting of shares in the Demat account of those who were allotted shares will be on Wednesday, September 25. The shares will be listed on the NSE SME platform on Thursday, September 26, 2024.

Jawa Capital Services Private Limited is the lead book-running manager for Kalana Ispat IPO while Skyline Financial Services Private Ltd is the registrar. After Trade Broking is the market maker for Kalana Ispat IPO.

About the company

Established in October 2012, Kalana Ispat Limited produces MS and alloy steel billets in various grades. The company’s operations are divided into two main segments: product sales and service sales. Its manufacturing facility is certified by international quality management systems such as ISO 2830:2012 and has an annual production capacity of 38,000 MT.

Despite an 11 per cent decline in revenue, Kalana Ispat recorded a significant increase in net profit (PAT) by 373 per cent between the financial year ending March 31, 2023 and March 31, 2024.

Review

“The company is engaged in manufacturing/trading and providing related services in metal products. It has posted negligible profits from FY21 to FY23 and posted record profits in FY24, i.e. pre-IPO year, which raises doubts and concerns about its sustainability. Its future prospects are dependent on the installation of solar power plants. Based on the super profits in FY24, the issue seems aggressively priced. Well-informed investors can park funds for the long term,” said Dilip Davda of Chittorgarh.com, giving the issue a ‘may concern’ rating.

Kalana Ispat IPO GMP today

The current market premium (GMP) for the IPO is ₹11 per share, which indicates the expected market price ₹77, with a premium of 16.66 percent of the issue price ₹66. GMP increased from ₹10 in the previous session, September 18.

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