Kalana Ispat hits 5% upper circuit after listing at 32% discount to IPO price; check details

Bucking the trend of blockbuster listings by small and medium enterprises (SMEs), shares of metals products manufacturer and trader Kalana Ispat Ltd made a disappointing trading debut on Thursday, September 26. The stock was listed at a nearly 32% discount on the NSE Emerge platform.

Shares of Kalana Ispat opened at ₹45.15 apiece, down 31.6% compared to its initial public offering (IPO) price of ₹66 per piece. However, within minutes of the opening of trade, the share price rose up to 5% to hit the upper circuit limit at ₹47.4 on the NSE.

Since the minimum bid quantity to apply for the Kalana Ispat IPO was 2,000 shares, the bidders who were allotted shares in the primary issue would have been facing losses of at least ₹41,700 (₹20.85 x 2,000) as soon as the stock started trading on exchanges.

The ₹32.59-crore Kalana Ispat IPO was open for subscription from 19 to 23 September. At the close of the three-day bidding period, the issue was oversubscribed nearly 58 times. The company received applications for 27.04 crore shares against 46.9 lakh shares on offer.

The retail portion was booked around 74 times, with bids for 17.48 crore shares received against 23.45 lakh shares on offer for the category. The non-retail investors’ segment was booked around 40 times, with bids received for 9.56 crore shares against 23.45 lakh shares on offer.

The Kalana Ispat IPO was a fixed-price issue consisting entirely of a fresh issuance of 49.38 lakh shares. Shares were offered at a price of ₹66 per unit in a lot size of 2,000.

The company said that it planned to use the proceeds from the fresh issuance for capital expenditures on the installation of a 4 MW DC and 3.5 MW AC ground-mounted solar power plant. A portion of the proceeds would also be used for capital expenditures on setting up a rolling mill in Ahmedabad, including the construction of the industrial shed, purchase of equipment/machinery, and other assets. A portion of the funds will also be used for general corporate purposes.

About Kalana Ispat Ltd

Incorporated in October 2012, Kalana Ispat Ltd initially started off by focusing on the trading of metal scrap. At the outset, its operations involved the procurement of raw materials through imports from various countries, along with sourcing from shipbreaking yards and local merchants. Later, it ventured into manufacturing and is now involved in making MS billets and alloy steel billets of various grades.

The company’s manufacturing unit, which has been duly certified by international standards of quality management system, has an annual capacity of 38,000 tonnes.

The company’s revenue stood at ₹73.9 crore in the financial year 2023-24, which was 11% lower than ₹8,335.87 of revenue seen in the previous financial year 2022-23. However, profit after tax (PAT) jumped multi-fold to ₹2.37 crore in FY24 compared to ₹50 lakh in FY23.