Kasturi Metal Composite SME IPO Opens with ₹17.61 Crore Fresh Issue
The initial public offering (IPO) of Kasturi Metal Composite Limited commenced subscription today, January 27, 2025, marking a significant milestone for the steel fibre manufacturer. The SME IPO will remain open for public bidding until Thursday, January 29, 2025, offering investors a three-day window to participate in this capital-raising exercise.
IPO Details and Price Band
The company has set a price band of ₹61 to ₹64 per equity share for its maiden public offering. This entirely fresh issue comprises 28 lakh shares, with no offer-for-sale component from existing promoters or shareholders. Through this IPO, Kasturi Metal Composite aims to raise approximately ₹17.61 crore at the upper end of the price band.
Allotment and Listing Timeline
The IPO allotment process is expected to be finalized on Friday, January 30, 2025. Successful applicants will likely receive their share credits by Monday, February 1, 2025, with refunds for non-allottees processed simultaneously. The company's equity shares are scheduled to list on the BSE SME platform with a tentative listing date of Tuesday, February 3, 2025.
Utilization of Proceeds and Investment Requirements
The net proceeds from the IPO will be primarily deployed towards capital expenditure for establishing a new manufacturing facility, referred to as Proposed Unit IV, in Amravati, Maharashtra. This strategic expansion involves:
- Mechanical and electrical installations
- Interior development works
- Procurement of plant and machinery
The estimated outlay for this project stands at ₹13.29 crore, with the remaining funds earmarked for general corporate purposes. For retail investors, the lot size is 2,000 shares, translating to a minimum investment of approximately ₹1.22 lakh at the lower price band and ₹1.28 lakh at the upper end.
Anchor Investment and Allocation Breakdown
Ahead of the public subscription, Kasturi Metal Composite secured ₹5 crore from anchor investors on January 23, 2025. The allocation structure for the net offer is as follows:
- Qualified Institutional Buyers (QIBs): 47.38%
- Retail Investors: 33.28%
- Non-Institutional Investors (NIIs): 14.32%
Hem Securities Ltd. serves as the book running lead manager, while Bigshare Services Pvt. Ltd. acts as the registrar. The company's market maker is Hem Finlease Pvt. Ltd.
Grey Market Premium and Subscription Status
Investor sentiment appears cautious, as indicated by the grey market premium (GMP) of ₹0 on January 27. This suggests the stock is expected to debut at its issue price of ₹64 per share. The grey market premium reflects investor willingness to pay above the official issue price in unofficial trading circles.
The IPO witnessed subdued demand on Day 1, with an overall subscription of 0.35 times by 5:00 PM. The breakdown reveals:
- Retail portion: 0.14x subscribed
- NII portion: Not yet booked
- QIB portion: Fully subscribed at 1x
The company received bids for 6.46 lakh shares against the total offer of 18.32 lakh shares.
Company Background and Operations
Founded in 2005, Kasturi Metal Composite specializes in the manufacture, supply, and export of steel fibre products for diverse industrial applications. The company's product portfolio includes:
- Steel wool fibre for brake pads and clutches
- Durocrete PP fibres through trading operations
- Concrete flooring services via associate Durafloor Concrete Solution LLP
Operating under the Duraflex and Durabond brands, the company serves critical sectors including construction, mining, and automotive. Its products enhance durability and structural strength in infrastructure projects such as tunnels, roads, and bridges.
Kasturi Metal Composite currently operates three manufacturing facilities at MIDC Amravati:
- Unit 1: Dedicated to fine wire drawing
- Units 2 and 3: Handle steel fibre and mild steel wire production
This integrated setup supports efficient manufacturing processes and maintains consistent product quality standards across operations.
