Kusumgar share price hits 10% upper circuit after stellar listing. Should investors buy, sell or hold the stock?

Kusumgar share price hit 10% upper circuit after making a strong debut in the Indian stock market on Wednesday. Kusumgar IPO listing date is today, 15 July, and the stock has been listed on BSE and NSE.

Kusumgar shares were listed at ₹574 apiece on the BSE, a premium of 37% to the issue price of ₹419 per share. The stock was listed with a premium of 35.80% at ₹569 apiece on NSE.

The stock jumped 10% from its listing price to touch an upper circuit of ₹631.35 apiece on the BSE, rising over 50% from the issue price. On NSE, it surged 10% to ₹625.90 per share.

The strong listing was backed by robust subscription received for the company’s ₹650.34 crore initial public offering (IPO).

Kusumgar IPO listing was in line with the Street expectations, as seen from the grey market premium (GMP). Ahead of the share debut, Kusumgar IPO GMP was ₹161 per share, which indicated a likely listing at a premium of around 38% to the offer price.

Kusumgar shares made a strong stock market debut, supported by robust investor demand and positive sentiment towards the defence sector.

“While the company operates in a niche engineered fabrics business with strong entry barriers and long-term opportunities in aerospace and defence, investors should also note that its financial performance has weakened over the last three years, with declines in revenue, EPS and RoNW,” said Shivani Nyati, Head of Wealth at Swastika Investmart Ltd.

Moreover, FY25 earnings were largely driven by a one-time CFF parachute order, and the Kusumgar IPO was a 100% Offer for Sale (OFS), meaning the company did not receive fresh capital for future expansion, she added.

“Our view is to hold Kusumgar shares with a strict stop-loss at ₹520. Kusumgar IPO allottees can consider booking partial profits after the strong listing and hold the remaining shares with this stop-loss,” said Nyati.

For fresh investors, the analyst advises to avoid chasing Kusumgar stock at current levels and wait for better entry opportunities after consolidation and improved earnings visibility.

Brokerage firm Emkay Global Financial Services initiated coverage on Kusumgar shares with a ‘Buy’ rating and a target price of ₹800 apiece.

Emkay’s positive stance is propped by the company’s significant headroom to grow in its best-paying segment — A&D Fabrics; global defense budget coupled with multiple FTAs auguring well for domestic players; endeavor to enter high entry barrier products which ensures a best-in-class margin profile; and diversified growth engines that cushion single-segment shocks.

The brokerage firm forecasts revenue, EBITDA and PAT CAGR of 34%, 35% and 46% over FY26-29, led by a contracted defense-order recovery from FY27, and values Kusumgar shares at 40x June 2028E EPS.

Kusumgar IPO was open for subscription from July 8 to July 10, and was subscribed by a robust 128.85 times. The IPO price band was set at ₹398 to ₹419 per share.

At 11:50 AM, Kusumgar share price was trading at ₹612.35 apiece on the BSE, up 6.68% from its listing price, and up 46.15% from its issue price.