Kusumgar IPO Ignites Strong Demand, Subscribed Over 14x as Investors Weigh Listing Gains

Kusumgar IPO Ignites Strong Demand, Subscribed Over 14x as Investors Weigh Listing Gains​

The Rs 650 crore initial public offering (IPO) of Kusumgar Limited continues to attract robust investor interest on its third day of bidding. As of 10:03 am on July 10, the issue was subscribed over 14 times, reflecting significant appetite for the company's shares. The IPO, which opened on July 8 and closes on July 10, is seeing a surge in demand across multiple investor categories.

IPO Subscription Details Reveal High Investor Interest​

The public issue offered a total of 16.56 crore shares against 1.14 crore issued, indicating strong oversubscription. Non-institutional investors led the charge, subscribing nearly 42 times their allocated quota of 24.36 lakh shares. This high demand was complemented by retail individual investors, who subscribed approximately 10 times their reserved allotment of 56.85 lakh shares.

Qualified institutional buyers (QIBs) also showed solid support for the offer, bidding at 2.19 times their quota of 32.48 lakh shares. The dedicated portion reserved for employees was similarly well-received, subscribing nearly four times its allocation. This represents a considerable increase from Day 1's subscription rate of 3.5 times overall.

Grey Market Premium Implies Potential Listing Surge​

On the morning of July 10, Kusumgar shares were commanded a grey market premium (GMP) of Rs 158 per share. IPO-tracking platforms and Investorgain pegged the GMP at this level, suggesting a potential listing gain close to 38 percent over the upper end of the price band.

The company fixed its price band for the IPO at Rs 398–419 per equity share, with a face value of Re 1. The issue is an offer for sale by promoters, comprising 1.55 crore equity shares. This means the company will not receive any proceeds from the offering.

Company Performance and Financial Snapshot​

Kusumgar reported revenue from operations of Rs 692 crore in FY26, up from Rs 467.9 crore in FY24. The net profit saw an increase to Rs 98.2 crore in FY26 compared to Rs 84.3 crore in the previous financial year (FY24).

Despite the growth in profitability and revenue, a closer look reveals that both operational metrics declined on a year-on-year basis for FY26. Revenue fell 11.2 percent, and net profit dropped 12.3 percent. The management attributed this dip to deferred defence orders and the impact of US tariffs on exports.

Analyst Viewpoint: Positioning in Global Market Trends​

Master Capital has advised that investors might view this IPO as a potential long-term investment opportunity. The brokerage cited strong growth prospects within the engineered fabrics industry globally. The international market is projected to expand from $41.6 billion in 2019 to $67.8 billion by 2025, anticipating continued robust growth up to $112.2 billion by 2030.

In India, the domestic engineered fabrics market grew from $6.3 billion in FY20 to $11.2 billion in FY26, marking a 10 percent CAGR. Master Capital estimates that the Indian market could reach $21.1 billion by FY31, implying a 13.5 percent CAGR.

Kusumgar's Market Position and Business Structure​

Established in 1990, Kusumgar specializes in manufacturing synthetic fabrics used across several key segments. These include aerospace and defence, industrial and automotive, as well as outdoor and lifestyle products. The company operates six manufacturing facilities in Gujarat and one fabrication unit in Uttar Pradesh.

The firm possesses a vertically integrated manufacturing capability, technical expertise, and a diverse product portfolio exceeding 1,000 stock-keeping units. Exports constitute nearly 40 percent of the FY26 revenue, with the US contributing between 9–10 percent of sales.

IPO Logistics and Anchor Investor Commitments​

The issue was backed by anchor investments raised on July 7. Kusumgar allocated 46.28 lakh equity shares at Rs 419 apiece to anchor investors. These significant commitments included institutions like BlackRock Global Funds, Goldman Sachs Funds, Kotak Mahindra Life Insurance Company, and major domestic mutual funds such as SBI Mutual Fund and ICICI Prudential Mutual Fund.

The book-building structure is set with 50 percent of the net offer reserved for QIBs, 35 percent for retail investors, and 15 percent for non-institutional investors. The allotment is expected to be finalized on July 13, followed by refunds and share credits on July 14. Kusumgar shares are tentatively scheduled to list on the BSE and NSE on July 15.