Kusumgar Limited, a company in the textile business, drew a wave of investor enthusiasm for its recent public offering. The issue opened on Wednesday, 8 July and closed on Friday, 10 July. By the final day of bidding, it had racked up an overall subscription of 128.85 times, meaning demand ran to well over a hundred times the shares on offer. Founded back in 1990, the company manufactures woven, coated and laminated synthetic fabrics, known in the trade as engineered fabrics.
How the demand broke down
According to NSE figures, the ₹650 crore issue drew bids for 1,47,76,17,435 shares against the 1,14,68,094 shares available. The strongest conviction came from large institutional players. The portion reserved for QIBs, or Qualified Institutional Buyers, was subscribed a remarkable 284.10 times. The Non-Institutional Investors (NII) category filled up 165.46 times, while the retail investors' quota was booked 26.47 times. On top of that, the company had already raised ₹193.9 crore from anchor investors before the issue even opened.
An offer built entirely on OFS
One crucial detail deserves attention here. Kusumgar Limited is raising ₹650 crore through this IPO, yet not a single fresh share is being issued. The entire offering is structured as an Offer for Sale (OFS), which means the company's promoters are selling their existing holdings. The direct consequence is that every rupee raised flows to the promoters offloading their stakes, and the Mumbai-based company itself receives nothing from the proceeds.
Shares to be allotted at ₹419
The company had set a price band of ₹398 to ₹419 per share, and investors will now be allotted stock at the upper end, ₹419. It also carved out a special concession for its own staff, offering employees a discount of ₹39 on each share. The strength of demand was clear from the start, as the issue was fully subscribed on Wednesday, its very first day.
A 38.66 percent premium in the grey market
Ahead of listing, the unofficial grey market has been buzzing over the stock as well. On Saturday, Kusumgar Limited shares were changing hands at a hefty grey market premium of ₹162, roughly 38.66 percent above the issue price. Investors should keep in mind, however, that the GMP is only an informal signal and can swing sharply before the actual listing. Kusumgar Limited is set to debut next week, on 15 July, on both of the domestic market's major exchanges, the BSE and the NSE, and only then will it become clear whether this heavy demand translates into real listing gains.
