Gajanand International IPO Lists at ₹42, Surges 16.67% Over Issue Price

Gajanand International, a producer of contamination-free and sustainable cotton, made a positive debut on the Indian stock market on Monday, 16th September 2024, with its shares listing at a premium to the issue price. The company's initial public offering (IPO) had generated moderate demand from investors during its subscription period, setting the stage for a decent market debut.

Listing Details

• Listing Price: Gajanand International shares were listed at ₹42 per share on the NSE SME platform, marking a solid start to its journey as a publicly traded company.
• Comparison to Issue Price: The listing price represents a premium over the IPO issue price. Gajanand International had set its IPO price at ₹36 per share.
• Percentage Change: The listing price of ₹42 on the NSE SME translates to a premium of 16.67% over the issue price of ₹36.

First-Day Trading Performance

• Opening vs. Latest Price: Following its strong opening at ₹42, Gajanand International's share price reached a high of ₹43 before declining to ₹39.90 by 10:27 AM, down 5% from its opening price but still above the issue price.
• Market Capitalisation: As of 10:27 AM, the company's market capitalisation stood at ₹75.15 crore.
• Trading Volume: The traded volume was 9.60 lakh shares with a traded value of ₹4.00 crore, indicating moderate investor interest on the first day of listing.

Market Sentiment and Analysis

• Market Reaction: The market initially reacted positively to Gajanand International's listing, but the stock saw some profit-booking during early trading.
• Subscription Rate: The IPO was oversubscribed by 15.27 times, with retail investors leading at 24 times subscription.
• Grey Market Premium: Prior to listing, shares were not trading at a premium in the grey market.

Growth Drivers and Challenges 

Expected drivers of future performance:

• Specialisation in contamination-free and sustainable cotton production
• Diverse product portfolio including Mech1, Shankar6, and DCH 32 cotton varieties
• Strong presence in domestic and international markets

Potential challenges:

• Fluctuations in cotton prices and demand
• Competition in the cotton industry
• Dependence on agricultural output and weather conditions

Utilisation of IPO Proceeds 

Gajanand International plans to use the funds for:

• Meeting working capital requirements
• General corporate purposes
• Covering issue expenses

Financial Performance 

The company has demonstrated strong financial growth:

• Revenue increased by 48% to ₹10,874.81 lakhs in FY2024 from ₹7,342.4 lakhs in FY2023
• Profit After Tax (PAT) rose by 59% to ₹223.73 lakhs in FY2024 from ₹141.06 lakhs in FY2023
• ROCE improved to 29.72% in FY2024

As Gajanand International begins its journey as a listed entity, market participants will closely monitor its ability to leverage its position in the cotton industry to drive future growth and shareholder value. The positive listing and subsequent trading suggest that investors are optimistic about the company's prospects in the sustainable cotton market.