Aastha Spintex IPO off to a steady start; issue subscribed 52% on Day 1. Check GMP & key details

The initial public offering (IPO) of Aastha Spintex opened for subscription on Monday and received a healthy response from investors on Day 1. As of 2:10 pm, the issue was subscribed 52%. The Grey Market Premium (GMP) is hovering around 4%, indicating modest listing gains. Based on the prevailing GMP, the IPO's estimated listing price is around Rs 141.

The Rs 170 crore IPO is entirely a fresh issue of equity shares, with no offer-for-sale (OFS) component. The issue is priced in the range of Rs 125-136 per share and will close for subscription on July 1. The shares are proposed to be listed on the BSE and NSE.

The company plans to utilise the proceeds for the acquisition of Falcon Yarns, funding its working capital requirements, and meeting general corporate purposes.

Aastha Spintex IPO subscription status

The Aastha Spintex IPO witnessed a steady response from investors on the opening day. As of 2:10 pm on Day 1, the public issue was 52% subscribed, with bids received for 70.72 lakh shares against the 1.36 crore shares on offer.

Retail Individual Investors (RIIs): The retail portion was subscribed 26%, with bids for 14.14 lakh shares against the 54.40 lakh shares reserved for the category.

Non-Institutional Investors (NIIs): The NII segment saw the strongest demand, with 87% subscription, receiving bids for 47.33 lakh shares against the 54.40 lakh shares on offer.

Qualified Institutional Buyers (QIBs): The QIB category was subscribed 36%, with bids for 9.79 lakh shares against the 27.20 lakh shares allocated to institutional investors.

About Aastha Spintex

Based in Gujarat, Aastha Spintex manufactures cotton spun yarn and operates an integrated spinning facility at Halvad. Its product portfolio includes carded, combed and compact cotton yarn used in weaving, knitting, hosiery and garment manufacturing. The company caters to both domestic and export markets.

Financially, the company has reported steady growth over the last three years. Total income rose to Rs 352.2 crore in FY25 from Rs 239.7 crore in FY23, while net profit increased sharply to Rs 22.9 crore from Rs 1.1 crore during the same period. It reported a return on equity of 12.8%, while the IPO is valued at around 18.8 times FY25 earnings.

The proposed acquisition of Falcon Yarns is expected to significantly expand the company's spinning capacity from about 7,700 MT to 17,457 MT annually, supporting future revenue growth.

However, the business remains exposed to fluctuations in cotton prices, dependence on a single manufacturing facility and customer concentration outside Gujarat through a key reseller. Demand shifts towards synthetic fibres also remain a long-term risk.

Brokerage view

Swastika Investmart has assigned a "Subscribe" rating to the issue for medium- to long-term investors. The brokerage said the acquisition of Falcon Yarns is expected to more than double spinning capacity and support future growth.

It also highlighted the company's improving profitability and investments in solar and wind power, which now meet nearly 80% of its energy requirements and are expected to help reduce production costs. At around 18.8x FY25 earnings, the brokerage believes the IPO is reasonably valued given the company's growth profile.

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