Neelam Linens and Garments IPO listing: Neelam Linens and Garments shares made a decent debut on the bourses on Monday, November 18 as they listed at ₹40.05 on NSE SME, a premium of 66.87 percent over the issue price of ₹24.
Neelam Linens’ SME initial public offering (IPO), valued at ₹13 crore, was open for subscription from November 8 to November 12. The health insurance services provider’s shares were priced in the range of ₹20-24 per share for the issue.
Following the three days of bidding, Neelam Linens IPO closed with robust demand, garnering 91.97 times bids. The IPO received bids for 33.16 crore shares against 36 lakh shares on offer. The retail investor segment was booked 57.82 times, while the non-institutional investors (NII) category was bid a massive 273.47 times. The qualified institutional buyers (QIB) portion was subscribed 15.40 times.
About the IPO
Neelam Linens IPO was entirely a fresh issue of 54.18 lakh shares. There was no offer for sale (OFS) component. The company raised ₹3.69 crore from anchor investors on November 7, 2024.
Retail investors could apply with a minimum lot size of 6,000 shares, requiring a minimum investment of ₹1.44 lakh. The company intends to utilize the proceeds of the issue to meet the following objects: Funding capital expenditure requirement of our Company towards the purchase of Embroidery Machines for expansion; Prepayment or repayment of all or a portion of certain outstanding borrowings availed by the Company; General corporate purpose.
Of the net offer, upto 20 percent is reserved for qualified institutional bidders (QIBs). Non-institutional investors (NIIs) and retail investors will have allocations of upto 15 percent and 34 percent of the net offer, respectively.
Expert Global Consultants Private Limited is the book running lead manager of the Neelam Linens and Garments IPO, while Purva Sharegistry India Pvt Ltd is the registrar for the issue. The market maker for Neelam Linens and Garments IPO is Globalworth Securities.
“The company is engaged in a highly competitive and fragmented segment of processing and trading in home furnishings and related services. It is also dealing in sale of import licenses. The company posted static but inconsistent financial performances so far. Its debt equity ratio of 3.12 as of June 30, 2024 raises major concern. Based on FY25 super annualized earnings, the issue appears fully priced. There is no harm in skipping this “High Risk/Low Return” offer, said Dilip Davda of Chittorgarh.com with an ‘avoid’ rating.
About the Company
Founded in 2010, Neelam Linens and Garments (India) Limited specializes in manufacturing and exporting premium soft home fashion products globally. The company’s diverse product portfolio includes bedsheets, pillow covers, duvet covers, towels, rugs, shirts, and various garments, primarily catering to discount retail outlets. It supplies high-thread-count bedding and towel products to distributors and retail stores in markets like the USA and Australia. Additionally, Neelam Linens engages in trading licenses, purchasing from exporters and selling to importers to generate margins on price differences.
For the fiscal year ending March 31, 2024, the company saw a slight revenue decline of 0.63%, while its profit after tax (PAT) increased by 3.43% compared to the previous fiscal year.
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