Saraswati Saree Depot shares debut at 25% premium over IPO price

Shares of Saraswati Saree Depot, a wholesaler of sarees, kurtis, lehengas, and other womens' ethnic wear garments, made a stellar debut on the stock exchanges on Tuesday, with the stock listing at 25% premium over the issue price. The shares of Saraswati Saree Depot listed at ₹200 apiece on the BSE, against the initial public offering (IPO) price of ₹160 per share. On the NSE, the stock opened 21.25% higher at ₹194 over the issue price.

Post listing, Saraswati Saree Depot gained as much as 31% to ₹209.95, while its market capitalisation rose to ₹831.40 crore. At the time of reporting, the stock was locked in its upper circuit limit of 5% over the listing price at ₹209.95 apiece on the BSE. On the NSE, it touched a high and low of
₹203.70 and ₹186, respectively, in the first hour of trade so far.

The debut of Saraswati Saree Depot was in line with the Street expectations as the stock was commanding grey market premiums (GMP) of ₹40 apiece in the unlisted market. The estimated listing price of the stock in the grey market was ₹200 per share.

The Kolhapur-based company raised 160 crore via IPO, which was a combination of fresh issue of 0.65 crore shares aggregating to ₹104 crore and offer for sale of 0.35 crore shares worth ₹56 crore. The IPO, which started between August 12 and August 14, were offered at a price band of ₹152-160 per share at a lot size of 90 shares and multiple thereafter.

The IPO of Saraswati Saree Depot was subscribed 107.39 times, with quota reserved for qualified institutional buyers (QIBs), non-institutional investors (NIIs), and retail investors subscribing by 64.12 times, 358.47 times, and 61.59 times, respectively. The company had reserved 50% of the issue for QIBs, 15% for NIIs, and remaining 35% for retail investors.

The company intends to use capital raised from fresh equities to fund the working capital requirements of the company and meet general corporate purposes.

Established in 1996, Saraswati Saree Depot is engaged in manufacturing and wholesale women's apparel, primarily catering to the wholesale (B2B) segment of sarees. It also deals in the wholesale business of other women's apparel, such as kurtis, dress materials, blouse pieces, lehengas, bottoms, etc. On average, the company generates more than 90% of its total revenues from selling sarees.

In the financial year 2022-23, the company served over 15,000 unique customers and its product catalogue consists of more than 3,00,000 different stock-keeping units (SKUs). It operates from two stores located in Kolhapur and Ulhasnagar in Maharashtra.

(DISCLAIMER: The views and opinions expressed by investment experts on fortuneindia.com are either their own or of their organisations, but not necessarily that of fortuneindia.com and its editorial team. Readers are advised to consult certified experts before taking investment decisions.)