Krishca Strapping Solutions SME IPO: Day 3 saw subscriptions of 126.88x, GMP jumps 138%

An SME IPO, Krishca Strapping Solutions's offering of 3,320,000 equity shares with a face value of Rs. 10 aggregating up to ₹17.93 Crores. The issue price per share for the offering ranges from ₹51 to ₹54. The IPO opens on May 16, 2023 for subscription and will be closed on May 19, 2023. Purva Sharegistry India Pvt Ltd is the registrar for the IPO and the lead manager is Share India Capital Services Private Limited. Monday, May 29, 2023, is the anticipated date for the scheduled NSE SME listing of the shares of Krishca Strapping Solutions. According to the terms and conditions of the offer, qualified institutional buyers (QIBs) will receive 50% of the net offer, HNI/NII investors would receive 15% of the offer, and retail investors will receive the remaining 35%.

The IPO of Krishca Strapping Solutions received 126.88 subscriptions. By May 18, 2023 6:20:00 PM, the public issue had received subscriptions in the retail category 291.16, the QIB category 4.82, and the NII category 150.44.

According to the GMP trend, the grey market premium initially stood at roughly ₹28, but as of May 18th 2023, it jumped to as of May 18th 2023. According to the GMP chart, the expected listing price is being projected at roughly ₹129 per share while taking into account the upper end of the band pricing of Krishca Strapping Solutions Ltd's IPO at ₹54. As a result, it shows a strong listing premium of 138.89% for Krishca Strapping Solutions Ltd above the listing price estimated by the grey market.

A R Ramachandran, Co-founder & Trainer-Tips2trades said “Even though profit turnaround has been great from FY22 onwards, high debt-equity ratio coupled with low ROE makes the Krishca Strapping Solutions IPO a slightly expensive bet. Investors should wait for a correction post listing to buy at better levels."

V.L.A. Ambala (SEBI Registered Research Analyst), Stock Market Today (SMT) said “Krishca Strapping Solutions, established in December 2017, offers packaging solutions for the steel industry and began commercial production in March 2020 at their Chennai plant.  YoY company has shown a growth in its net worth. To be more précised Dec 2021 it was (all in cr.)-120, in Dec 202 it was 159 and now in month of Feb it was 945, Wherein borrowing has decreased almost by 12% and total revenue has rose from 971.5 to 6351.23. All this information and financial inputs are giving a signal to Subscribe for this IPO. The IPO subscription will be open from May 16 to May 19, 2023. The price per share is set at Rs. 51-54, and the lot size is 2000 shares, amounting to Rs. 1,02,000 to Rs. 1,08,000. The IPO aims to generate funds for various purposes, including setting up a new strapping line, repaying secured borrowings, and covering general corporate and issue expenses. Majorly for business operation and expansion cost.”

V.L.A. Ambala further added that “Despite of high inflation and pressure in metal sector this company had managed to make good revenue in past however, Krishca Strapping Solutions experienced negative cash flow in 2020 and may continue to face similar challenges. The company lacks ownership of its registered and corporate offices, leading to potential drawbacks. Noncompliance with statutory provisions could result in penalties. The absence of a registered trademark exposes the business to potential misuse. Additionally, the company operates on an order basis rather than forming long-term customer relationships. So at higher management or toplines has a lot of work to compete in market. Price band for listing is 51-54 per share which is considerable. It’s a Subscribe from our side to be growth partner in its growth as per past performance says.”