Aastha Spintex share price hits 5% upper circuit after weak debut. Buy, sell or hold?

Aastha Spintex share price hit the 5% upper circuit on Monday, 6 July, after making a weak stock market debut earlier in the day.

Aastha Spintex share price today listed at ₹130, a 4.41% discount to the issue price of ₹136, on both the BSE and the NSE.

Despite the muted listing, buying interest emerged soon after the debut, pushing the stock to its 5% upper circuit.

Following the listing, the company's market valuation stood at ₹598.13 crore.

The initial public offering (IPO) of Aastha Spintex Ltd was subscribed 4.64 times on the final day of bidding on Wednesday last week.

The ₹170-crore IPO was offered in a price band of ₹125-136 per equity share.

Aastha Spintex is engaged in the manufacturing and trading of carded, combed and compact combed cotton yarn, cotton bales and allied by-products. The company operates an integrated spinning and ginning facility in Halvad, Gujarat's Morbi district.

Aastha Spintex share price - Should you buy, sell or hold?

Shivani Nyati, Head of Wealth at Swastika Investmart Ltd., said Aastha Spintex had a weak stock market debut, listing at ₹130, a 4.41% discount to its IPO price of ₹136. However, she believes the muted listing does not diminish the company's improving fundamentals.

According to Nyati, the company has delivered a strong financial turnaround, with revenue rising from ₹239 crore in FY23 to ₹351 crore in FY25, while net profit increased sharply from ₹1 crore to ₹23 crore, reflecting significant operational improvement. She added that the acquisition of Falcon Yarns is expected to enhance production capacity and support future growth.

While cautioning that cotton price volatility remains a key risk, Nyati said improving margins and a reasonable valuation support the company's medium- to long-term prospects. She advised investors to hold the stock, with a stop-loss at ₹120.

Aastha Spintex IPO details

The ₹170-crore Aastha Spintex IPO comprised entirely a fresh issue of equity shares, with no offer-for-sale (OFS) by existing shareholders.

The company plans to utilise ₹111.51 crore of the net proceeds to finance the acquisition of Falcon Yarns Private Limited, while ₹10 crore has been earmarked to meet the acquired company's working capital requirements. The remaining funds will be used for general corporate purposes.

BOI Merchant Bankers Limited and PNB Investment Services Limited are the book-running lead managers to the public issue.

Disclaimer: This story is for educational purposes only. The views and recommendations above are those of individual analysts or broking companies, not Mint. We advise investors to check with certified experts before making any investment decisions.