Kusumgar IPO Day 3: Issue subscribed 13.13x so far. GMP hints 38% listing pop. Apply or not?

The Kusumgar IPO opened for subscription on Wednesday, 8 July, and will close today, Friday, 10 July. Ahead of the issue opening, the manufacturer of woven, coated, and laminated synthetic fabrics, also known as engineered fabrics, raised ₹193.9 crore from anchor investors.

The company allotted 46,28,877 equity shares to anchor investors at the upper price band of ₹419 per share, according to an exchange filing.

The anchor investor book attracted participation from several marquee institutional investors, including BlackRock Global Funds – India Fund, Goldman Sachs Funds – Goldman Sachs India Equity Portfolio, and Kotak Mahindra Life Insurance Company, among others.

The Kusumgar IPO lot size has been fixed at 35 equity shares, with investors allowed to bid in multiples of 35 shares thereafter.

As per the allocation structure, up to 50% of the issue is reserved for Qualified Institutional Buyers (QIBs), at least 15% for Non-Institutional Investors (NIIs), and at least 35% for retail investors.

The company has also reserved shares worth ₹3.5 crore for eligible employees, who will receive a ₹39-per-share discount on the final issue price.

The basis of allotment for the Kusumgar IPO is expected to be finalised on Monday, 13 July. Refunds are likely to be initiated on Tuesday, 14 July, with shares credited to successful applicants' demat accounts on the same day. The company's shares are tentatively scheduled to list on the BSE and NSE on Wednesday, 15 July.

Kusumgar IPO GMP today is +158. Considering the upper end of the IPO price band and the current premium in the grey market, the estimated listing price of the Kusumgar share was ₹577 apiece, which is 37.71% higher than the IPO price of ₹419.

Analysing grey market activity over the past nine sessions, today’s IPO GMP shows an upward trend and is anticipated to deliver a robust listing. Experts have reported that the minimum GMP is ₹135.00, while the maximum GMP is ₹171.

The brokerage has assigned a 'Subscribe' rating to the Kusumgar IPO, citing the company's niche presence in technical textile fabrics and solutions for the defence, aerospace, and industrial sectors. It believes high entry barriers, a vertically integrated business model, and strong customer stickiness provide a competitive advantage. Nirmal Bang also highlighted the company's 22% revenue CAGR over the past two years, superior profitability, and healthy return ratios. At the upper price band, the issue is valued at 44.8x FY26 P/E and 24.7x EV/EBITDA.

SBICAP Securities has recommended subscribing to the IPO for a long-term investment horizon. The brokerage expects Kusumgar to benefit from India's free trade agreements (FTAs), which could support export growth. While the IPO is priced at 44.8x FY26 earnings, higher than some peers, SBICAP believes the valuation is justified given the company's stronger revenue growth and industry-leading EBITDA and PAT margins.

ICICI Securities has assigned a 'Subscribe' rating, describing Kusumgar as a niche player in the engineering fabrics segment with a strong presence in aerospace and defence. The brokerage said the company's technical capabilities and high entry barriers position it well to benefit from the government's "Make in India" initiative. It noted that the IPO is valued at around 45x FY26 earnings and 25x EV/EBITDA.

Swastika Investmart recommends subscribing to the IPO primarily for listing gains. While it acknowledged Kusumgar's niche business, high entry barriers, and favourable defence sector tailwinds, the brokerage expressed caution over the company's long-term prospects, citing declining revenue, EPS, and return on net worth (RoNW) over FY24–FY26. It also noted that FY25 performance was likely supported by a one-off CFF parachute order and highlighted that the IPO is a 100% offer-for-sale (OFS), with no fresh capital being raised.

The Kusumgar IPO consists entirely of an Offer for Sale (OFS) from the promoters, with no new shares being i...