Kusumgar IPO: Share sale subscribed five times on Day 2; NII portion booked 11 times

The initial public offering (IPO) of Kusumgar Limited was subscribed nearly five times (4.68 times) on the second day of subscription today. According to data, investors placed bids for 5,36,55,385 equity shares against the 1,14,68,094 shares on offer across all investor categories. The three-day IPO opened on Wednesday and will remain available for subscription until July 10.

The non-institutional investor (NII) segment emerged as the strongest contributor, with subscriptions reaching 10.78 times the shares reserved for the category. The retail individual investor (RII) quota attracted bids worth 4.50 times the allocation, while the employee reservation portion was subscribed 2.07 times.

On the first day of the issue, the share sale was subscribed 3.45 times. 

Kusumgar fixed the IPO price band at Rs 398-419 per equity share with a face value of Re 1. The public issue is entirely an Offer for Sale (OFS) comprising 1.55 crore equity shares, meaning the company will not receive any proceeds from the issue, with the entire amount going to the selling shareholders.

Retail investors can bid for a minimum lot of 35 shares and in multiples thereafter. At the upper end of the price band, the minimum investment required stands at Rs 14,665.

Under the book-building process, 50% of the net offer has been reserved for Qualified Institutional Buyers (QIBs), 35% for retail investors and 15% for non-institutional investors. Additionally, shares worth Rs 3.5 crore have been earmarked for eligible employees, who will receive a discount of Rs 39 per share on the final issue price.

On the financial front, the company reported revenue from operations of Rs 692 crore in FY26, compared with Rs 467.9 crore in FY24. Net profit increased to Rs 98.2 crore from Rs 84.3 crore during the same period. However, compared with the previous financial year, FY26 revenue declined 11.2%, while net profit fell 12.3%, primarily due to deferred defence orders and the impact of US tariffs on exports.

The IPO is being managed by Axis Capital, IIFL Capital Services and Motilal Oswal Investment Advisors as the book-running lead managers, while Bigshare Services is acting as the registrar to the issue. The company's shares are proposed to be listed on both the BSE and NSE, with the tentative listing scheduled for July 15.

BP Equities in an IPO note assigned a subscribe call to the issue. 

"At the upper price band of Rs 419, Kusumgar Ltd. is valued at a P/E multiple of 45.0x based on FY26 earnings. Given the company’s historical growth track record, expanding margins, scalable business model and industry growth potential, we believe the valuation is justified. Thus, we recommend a “SUBSCRIBE” rating for this issue with a medium to long-term investment horizon," said the brokerage.

ICICI Securities also gave a subscribe call to the IPO. 

"Kusumgar is a niche play in the engineering fabric space with large presence in Aerospace and Defence segment, which is gaining strong traction due to government impetus on make in India preference. High entry barrier and technical capabilities make Kusumgar a good play in the engineering fabric space. It is trading at 45x FY26 earnings and 25x EV/EBITDA. We assign SUBSCRIBE rating on Kusumgar Ltd. from long term view," said the brokerage.