Sai Silks Kalamandir IPO Day 1: GMP, Subscription Today; Should You Subscribe?

Sai Silks Kalamandir IPO Day 1: The initial public offering of retail textile company Sai Silks (Kalamandir) Ltd today, September 20, opened for public subscription. The IPO will close on September 22. Till 12 pm on Wednesday, Sai Silks Kalamandir IPO received 4,52,987 bids as compared with 3,84,86,309 shares on offer. The price band for the Rs 1,201.00-crore IPO is Rs 210-222 per share.

Sai Silks Kalamandir IPO GMP

According to market observers, Sai Silks Kalamandir is currently trading Rs 7 higher in the grey market. The Rs 7 grey market premium or GMP is about 3.15 per cent higher than its upper issue price of Rs 222 per share. This means the grey market is expecting an 3.15 per cent listing gain from the public issue.

‘Grey market premium’ indicates investors’ readiness to pay more than the issue price.

About Sai Silks Kalamandir IPO

Investors can subscribe to the IPO between Wednesday (September 20) and Friday (September 22). The IPO allotment will take place on September 27. The company will make its stock market debut on October 4 with its shares listing on BSE and NSE.

The IPO is a book-built issue of Rs 1,201 crore, comprising a fresh issue of 2.7 crore shares worth Rs 600 crore and an offer-for-sale of 2.71 crore shares aggregating to Rs 601 crore.

Out of the total 5,40,99,027 shares on offer, 50 per cent has been reserved for qualified institutional buyers, 15 per cent for non-institutional investors, and 35 per cent for retail investors.

Investors need to buy at least a lot of 67 shares.

Sai Silks Kalamandir: Should You Subscribe?

Giving ‘Subscribe’ rating to the IPO, brokerage BP Equities said, “On the upper price band, the issue is valued at a P/E of 27x based on FY2023 earnings which is lower compared to its peers and is reasonable for the retail business where the valuation matrix should only get better from hereon. We, therefore, recommend a SUBSCRIBE rating for the issue.”

Another brokerage Arihant Capital also gave ‘Subscribe’ to the IPO. It said, “The company has organically built its strengths from the ground up which have reflected in its healthy growth in profitability and revenues over the years. The driven and skilled management has been a key reason for its success. We believe it is well poised to grow into the future given its market leadership, focus on providing good quality products and enhancing customer experience. We recommend that investors Subscribe.”

Other brokerages including Reliance Securities, Ventura Securities and Choice Securities also gave ‘Subscribe’ rating to the SSKL IPO.

About Sai Silks Kalamandir Ltd

Sai Silks (Kalamandir) Limited, or SSKL, was incorporated in 2005. It provides ethnic apparel and value-fashion products.

Sai Silks offers a diverse range of products including various types of ultra-premium and premium sarees suitable for weddings, party wear, occasional and daily wear, lehengas, men’s ethnic wear, children’s ethnic wear and value fashion products comprising fusion wear and western wear for women, men and children.

Its profit after tax stood at Rs 97.59 crore during the year ended March 2023, Rs 57.69 crore in FY22, Rs 5.13 crore in FY21, and Rs 42.10 crore. Sai Silks’ revenue was at Rs 1,358.92 crore in FY23, Rs 1,133.02 crore in FY22, and Rs 679.10 crore in FY21, and Rs 1,178.62 crore in FY20.

The book running lead managers (BRLM) for the issue are Motilal Oswal, HDFC Bank, and Nuvama Wealth Management.