Aastha Spintex IPO Day 3: GMP signals 5% gain, subscribed 1.48x. Should you subscribe?

The Rs 170 crore Aastha Spintex IPO is in its third and final day of bidding, with the Grey Market Premium (GMP) indicating a potential 5% listing gain if market sentiment holds steady. Based on the prevailing GMP, the stock is expected to debut at around Rs 142, compared with the upper end of the price band at Rs 136.

The IPO has witnessed healthy investor interest so far. By the end of Day 2, the issue was subscribed 1.48 times, with investors bidding for 2.01 crore shares against the 1.36 crore shares on offer. The Retail Individual Investors (RII) portion was nearly fully subscribed at 96%, attracting bids for almost the entire 54.40 lakh shares reserved for the category.

The public issue, worth Rs 170 crore, comprises an entirely fresh issue of equity shares, with no offer-for-sale (OFS) component. The IPO is priced in the Rs 125-136 per share band and closes for subscription on July 1. The company's shares are proposed to be listed on both the BSE and NSE.


The company plans to deploy the IPO proceeds to acquire Falcon Yarns, meet working capital requirements, and support general corporate purposes.

Aastha Spintex IPO GMP Today

The Grey Market Premium (GMP) for the Aastha Spintex IPO is hovering around 5%, signalling a modest listing gain if current market sentiment remains unchanged. Based on the prevailing GMP, the shares are expected to debut at around Rs 142, compared with the IPO's upper price band of Rs 136.

Disclaimer: The Grey Market Premium (GMP) is an unofficial indicator based on grey market trading. It is speculative in nature and should not be treated as an official benchmark or a guarantee of the stock's listing performance.

Aastha Spintex IPO Subscription Status

The Aastha Spintex IPO attracted strong investor interest on the second day of bidding, with the overall issue subscribed 1.48 times. Investors bid for 2.01 crore shares against the 1.36 crore shares available.

Retail Individual Investors (RIIs): The retail quota was subscribed 96%, receiving bids for 52.19 lakh shares against the 54.40 lakh shares reserved.

Non-Institutional Investors (NIIs): The NII segment emerged as the strongest performer, with subscriptions reaching 2.28 times. Investors bid for 1.24 crore shares against the 54.40 lakh shares on offer.

Qualified Institutional Buyers (QIBs): The QIB portion was subscribed 94%, with bids for 25.56 lakh shares compared with the 27.20 lakh shares allocated for institutional investors.

About Aastha Spintex

Gujarat-based Aastha Spintex is engaged in the manufacturing of cotton spun yarn and operates an integrated spinning facility in Halvad. The company's product portfolio includes carded, combed and compact cotton yarn, catering to the weaving, knitting, hosiery and garment manufacturing industries across domestic as well as international markets.

On the financial front, Aastha Spintex has delivered robust growth over the past three financial years. Its total income increased to Rs 352.2 crore in FY25 from Rs 239.7 crore in FY23, while net profit surged to Rs 22.9 crore from Rs 1.1 crore during the same period. The company reported a return on equity (RoE) of 12.8%, with the IPO priced at a P/E multiple of around 18.8x FY25 earnings.

A key growth driver is the proposed acquisition of Falcon Yarns, which is expected to expand the company's annual spinning capacity from nearly 7,700 metric tonnes (MT) to 17,457 MT, strengthening its production capabilities and supporting future revenue growth.

Despite its growth prospects, the company faces certain risks, including volatility in cotton prices, reliance on a single manufacturing facility, and customer concentration through a major reseller outside Gujarat. In the long run, increasing demand for synthetic fibres could also impact the cotton yarn business.

Brokerage View

Swastika Investmart has recommended a "Subscribe" rating for investors with a medium- to long-term investment horizon. According to the brokerage, the proposed acquisition of Falcon Yarns is likely to more than double the company's spinning capacity, creating a strong platform for future growth.

The brokerage also highlighted Aastha Spintex's improving profitability and its focus on renewable energy. Nearly 80% of the company's energy requirements are met through solar and wind power, a move expected to lower production costs and improve operational efficiency. At a valuation of around 18.8x FY25 earnings, Swastika Investmart believes the IPO is reasonably priced considering the company's growth potential.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)