Cedaar Textile IPO listing today. GMP hints at modest gains

Synopsis

Cedaar Textile shares are set to list on the NSE SME platform on July 7. The IPO saw strong investor demand, subscribing over 12 times. The IPO was backed by QIB, NII, and retail investors. The company plans to use the funds for modernization, working capital, and solar power. Cedaar Textile is a yarn manufacturer with domestic and export clients.

Shares of Cedaar Textile are set to debut on the NSE SME platform on July 7 after garnering strong investor interest during the IPO. The issue was subscribed 12.26 times, backed by 37.88x QIB, 5.04x NII, and 9.73x retail participation. The grey market is currently quoting a premium of 7% (Rs 10) over the issue price of Rs 140, indicating moderate listing gains may be on the cards.

The Rs 60.90 crore IPO, which was entirely a fresh issue, closed on July 2, and allotments were finalised on July 3. Shares have already been credited to investors’ demat accounts on July 4.

The proceeds from the issue will be used for modernisation of machinery (Rs 17 crore), working capital needs (Rs 24.90 crore), and solar power installation (Rs 8 crore), along with general corporate purposes.

Cedaar Textile, incorporated in 2020, is a yarn manufacturer known for its melange, top-dyed, and fancy grey yarns, catering to household textiles, woven fabrics, and hosiery. It operates with a workforce of 583 employees and has a diversified client base across domestic and export markets.

The company posted a revenue of Rs 191 crore in FY24, down from Rs 220 crore in FY22, with net profit of Rs 11.05 crore in FY24.

Post-issue, the company will have a market capitalisation of Rs 194.30 crore, and is valued at a P/E of 19.11x on FY24 post-issue earnings.

All eyes will now be on whether listing day demand can hold the momentum reflected in pre-listing grey market quotes.

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