The much-anticipated initial public offering (IPO) of Accretion Nutraveda made its market debut on Wednesday, February 4, presenting a mixed picture for investors. The Ayurvedic and nutraceutical company's shares experienced contrasting performances across different trading platforms, reflecting the volatile nature of SME listings in the current market environment.
Listing Performance: A Tale of Two Exchanges
Accretion Nutraveda share price demonstrated significant divergence between exchanges during its listing. On the BSE SME platform, the stock opened strongly at ₹191 per share, representing a substantial premium of 48% over the issue price of ₹129. This impressive debut aligned closely with grey market expectations, which had projected a listing price around ₹197 based on a GMP of ₹68 per share.
However, the story unfolded differently on the main BSE board, where the shares listed at ₹155.60, marking a decline of 3.95% from the issue price. This dual performance highlights the varying investor sentiment and market dynamics between SME and main board listings, creating an interesting case study for market analysts.
Strong Investor Response During Subscription Period
The Accretion Nutraveda IPO witnessed robust investor interest during its three-day subscription window from January 28 to January 30. The public issue was oversubscribed 1.83 times overall, with particularly strong participation from retail investors who subscribed 2.19 times their allocated portion.
Subscription breakdown reveals:
- Retail investors: 2.19 times subscribed
- Non-institutional investors (NIIs): 2.08 times subscribed
- Qualified Institutional Buyers (QIBs): 1.01 times subscribed
The company received bids for 23.44 lakh shares against the 12.80 lakh shares on offer, demonstrating solid market appetite for the Ayurvedic manufacturing company. This positive response was further bolstered by anchor investor participation, with the company securing ₹7 crore from anchor investors ahead of the public subscription opening.
IPO Details and Fund Utilization Plans
Accretion Nutraveda's IPO represents a fresh issuance of 19 lakh shares, aiming to raise ₹24.77 crore for business expansion. The company has outlined clear and strategic plans for utilizing the net proceeds, focusing primarily on capacity enhancement and operational strengthening.
Capital Allocation Strategy
The company has earmarked funds for specific growth initiatives:
- Manufacturing Enhancement: Approximately ₹4.22 crore will be invested in machinery to improve automation at existing facilities.
- New Unit Development: Around ₹8.03 crore has been allocated for purchasing equipment for a new manufacturing unit.
- Working Capital: A further ₹5.50 crore is proposed for working capital requirements.
- Corporate Purposes: The remaining amount will support general corporate operations and growth plans.
The IPO lot size was set at 2,000 shares, translating to a minimum investment requirement of ₹2.58 lakh for retail investors seeking to participate in the offering.
Company Background and Market Position
Founded in 2021, Accretion Nutraveda operates as a Contract Development and Manufacturing Organization (CDMO) in the rapidly growing Ayurvedic and nutraceutical segment. The company manufactures products in multiple dosage formats including tablets, capsules, oral liquids, powders, oils, and external applications such as balms, creams, and gels.
The company's unique positioning combines traditional Ayurvedic formulations with modern nutraceutical science, catering to diverse health categories including liver care, women's wellness, bone and joint support, cognitive health, and respiratory care. With operations spanning domestic and international markets including Sri Lanka, Singapore, and the United States, Accretion Nutraveda represents the growing global interest in Ayurvedic solutions.
Sobhagya Capital Options Pvt. Ltd. served as the book-running lead manager for the issue, while Kfin Technologies Ltd. acted as registrar. Sunflower Broking Pvt. Ltd. was appointed as the market maker, ensuring liquidity and smooth trading operations for the newly listed shares.
