Aastha Spintex IPO Day 2: Strong GMP Indicates Potential 4% Listing Gain as Subscription Approaches Full—Is It a Buy?
The initial public offering (IPO) of Aastha Spintex, which aims to raise Rs 170 crore, has entered its second day of bidding, witnessing an overall subscription rate of 88%. Retail Individual Investors (RII) segment was subscribed at 41%, while Non-Institutional Investors (NII) displayed strong demand with a subscription rate of 1.38 times. The IPO, priced between Rs 125 and Rs 136 per share, is expected to list on both the BSE and NSE, with the Grey Market Premium (GMP) currently hovering around 4%. This suggests potential modest listing gains, with shares estimated to open around Rs 141 if market sentiment remains positive.
Aastha Spintex’s IPO proceeds will be utilized for several purposes, including the acquisition of Falcon Yarns and general working capital requirements. The company has reported significant growth in its financials, with total income rising from Rs 239.7 crore to Rs 352.2 crore between FY23 and FY25. Analysts have pointed out that the upcoming acquisition will bolster its annual spinning capacity, enhancing production capabilities and laying a foundation for future revenue growth. Despite these positive indicators, Aastha Spintex faces risks such as cotton price volatility and reliance on a singular manufacturing facility.
For Indian investors, the Aastha Spintex IPO presents a moderately attractive opportunity, particularly for those with a medium- to long-term investment horizon. Swastika Investmart has issued a “Subscribe” recommendation, citing the company’s growth potential and improving profitability. Notably, Aastha Spintex’s commitment to renewable energy is expected to reduce production costs, further enhancing operational efficiency. As the IPO continues to capture investor interest, the sentiment in the grey market indicates a cautiously optimistic outlook for potential investors.
Source: The Economic Times
(Expert Note: This report was prepared by the Wealthova IPO team.)