Aastha Spintex makes discounted debut, lists over 4 pc below issue price
Mumbai, July 6
Aastha Spintex shares made a weak stock market debut on Monday, listing at Rs 130 apiece on both the BSE and NSE, compared with the IPO issue price of Rs 136.
The listing reflected a discount of 4.41 per cent for investors who were allotted shares in the public issue.
Despite the weak start, investor sentiment improved soon after trading began. Fresh buying interest lifted the stock to its 5 per cent upper circuit limit, reversing early losses and signalling strong demand in the secondary market.
Following the listing, the company's market capitalisation stood at Rs 598.13 crore.
The Rs 170-crore initial public offering (IPO) of Aastha Spintex was subscribed 4.64 times at the close of bidding last week. The public issue was priced in the range of Rs 125 to Rs 136 per equity share.
The IPO consisted entirely of a fresh issue of equity shares, with no offer-for-sale (OFS) component by existing shareholders.
Aastha Spintex manufactures and trades carded, combed and compact combed cotton yarn, cotton bales and allied by-products. The company operates an integrated spinning and ginning facility in Halvad in Gujarat's Morbi district.
According to the company, it plans to use Rs 111.51 crore from the net IPO proceeds to fund the acquisition of Falcon Yarns Private Limited. Another Rs 10 crore has been allocated towards meeting the acquired company's working capital requirements, while the remaining proceeds will be used for general corporate purposes.
BOI Merchant Bankers Limited and PNB Investment Services Limited acted as the book-running lead managers for the public issue.
Aastha Spintex Limited is a Gujarat-based textile company engaged in the manufacturing of contamination-controlled cotton yarn and cotton bales. The company primarily serves the B2B segment, supplying its products to fabric manufacturers, weavers and knitting units.
— IANS
Reader Comments
Discounted listing but then hitting 5% upper circuit? That's the Indian market for you - full of drama. The acquisition of Falcon Yarns is interesting though. If they can integrate well and use that Rs 111 crore wisely, could be a good long-term bet. But I'm skeptical about B2B textile companies in this environment.
Not surprised. Textile IPOs have been a mixed bag globally. The 4.64x subscription is modest for Indian standards - means institutional interest wasn't overwhelming. The upper circuit recovery shows some retail FOMO, but I'd wait for a few days of price discovery before jumping in. Patience pays.
From Halvad to the stock exchange - that's the Indian growth story! Morbi district is a hub for ceramics and textiles. The integrated ginning facility gives them cost control. But why allocate IPO proceeds for working capital? That's a red flag for me. Companies should use fresh funds for expansion, not everyday expenses.
The 4% discount on listing is actually mild for a weak debut. Many Indian textile IPOs have listed even 10-15% below issue price. The upper circuit recovery suggests strong hands are accumulating. But as a foreign investor, I'm cautious about the textile sector's margins and cotton price volatility. ⚠️
Retail investors who got allotment should have sold at listing. Why hold? The upper circuit is just noise - could reverse tomorrow. I've seen too many IPOs give a quick pop and then fade. The company's use of funds for acquisition is smart, but
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