The IPO of Gujarat-based fabric company, Shri Techtex, garnered tremendous interest from investors, becoming fully subscribed within a few hours. Retail investors displayed maximum enthusiasm, oversubscribing their portion 2.17 times, while the Qualified Institutional Buyers (QIB) portion received no bids, and the Non-Institutional Investors (NII) portion was subscribed only 0.30 times. The grey market premium (GMP) for Shri Techtex shares reached Rs 28, representing a significant 46% premium over the upper price band of the IPO. However, market experts advise investors to base their investment decisions on the company’s fundamentals and financials rather than signals from the grey market.
Shri Techtex IPO: Investors Show Enthusiasm, Fully Subscribed Within Hours
Shri Techtex’s IPO, valued at Rs 45.14 crore, is open for investment until July 28, with a price band of Rs 54-61 and a lot size of 2,000 shares. The allotment of shares is expected to be finalized on August 2, and the listing on the NSE SME platform is scheduled for August 7. The company will issue 74 lakh shares with a face value of Rs 10. The funds raised through the issue of fresh shares will be utilized for various purposes, including the construction of a factory shed, setting up a solar plant, machinery purchase, working capital requirements, general corporate purposes, and expenses related to the IPO.
Price Band, Listing Date, and Utilization of Funds
Shri Techtex specializes in the production of polypropylene fabric of different sizes and densities, catering to industries requiring single-use products like organic farming, healthcare, nursing homes, home furnishing, packaging, and consumer goods. The company’s plant is situated in Simaj, Dholka Taluka, Ahmedabad, Gujarat, with an annual production capacity of 3600 MT of polypropylene non-woven fabric. The company serves clients in Gujarat, Tamil Nadu, and West Bengal, as well as internationally in countries like the US, Taiwan, Canada, Denmark, and China.
Examining the company’s financial performance, Shri Techtex witnessed steady growth, with its net profit increasing from Rs 4.47 crore in the financial year 2020 to Rs 12.66 crore in the following year. Although there was a slight dip in net profit in the financial year 2022, amounting to Rs 8.27 crore, the company quickly rebounded, recording a net profit of Rs 9.11 crore in the financial year 2022-23.
