Kusumgar IPO Surges Past 5x Subscription, Driven by Robust Demand and Global Fabric Market Outlook

Kusumgar IPO Surges Past 5x Subscription, Driven by Robust Demand and Global Fabric Market Outlook​

Kusumgar Limited’s Rs 650-crore initial public offering continues to attract substantial investor attention on its second day of bidding. As of the morning of July 9, the issue was subscribed 5.3 times, marking a strong increase from the 3.45 times recorded on the first day. The IPO, which opened on July 8 and closes on July 10, is testing investor appetite for the specialized manufacturing firm.

IPO Demand Hits Multi-day High as Retailers Surge Interest​

The public issue received bids for 6.08 crore shares against 1.14 crore shares across all categories, highlighting focused demand from retail investors. Non-institutional and retail participants were key drivers of this interest. Individual retail investors subscribed 5 times the 56.85 lakh shares reserved for them.

Qualified institutional buyers (QIBs) also showed confidence, bidding for 49 percent of their allocated quota of 32.48 lakh shares. The employee reservation portion was subscribed 2.28 times. This indicates a varied but strong market response ahead of the allotment finalization on July 13.

Financial Performance Under Review amid Market Growth Projections​

The IPO’s price band is set between Rs 398 and Rs 419 per equity share, with a face value of Re 1. Since this issue is entirely an offer for sale by promoters, the company will not receive proceeds from the offering. Kusumgar successfully raised Rs 193.9 crore from anchor investors on July 7 alone.

On the financial front, the company reported revenue from operations at Rs 692 crore in FY26, up from Rs 467.9 crore in FY24. However, net profit saw a decline to Rs 98.2 crore in FY26, down from Rs 84.3 crore in FY24. The management attributed the margin pressure and profitability drop to deferred defence orders and the impact of US tariffs on exports.

Analyst Weighs In on Kusumgar's Long-Term Potential​

Grey market indicators suggest strong upside potential, with IPO tracking platforms estimating a grey market premium (GMP) at Rs 160 per share. This unofficial marker implies a potential listing gain of 38.19 percent over the upper end of the price band.

Master Capital, however, advises investors to consider this as a long-term opportunity based on industry growth prospects. They pointed out that the global engineered fabrics market is projected to reach $112.2 billion by 2030, growing at a CAGR of 10.6 percent.

The brokerage noted that Kusumgar is strategically positioned to benefit from demand across various segments, including aerospace and defence fabrics, industrial, and automotive applications. The company's vertically integrated capabilities, technical expertise, and diversified product portfolio underpin this outlook.