Purple United Sales Lists at 58% Premium, Demonstrates Exceptional Growth Story on NSE SME

Purple United Sales Limited, a specialized children's fashion brand operating since 2014, marked a remarkable entry into the public markets on Wednesday, 18th December 2024. The company, which has established itself with 17 exclusive stores across 5 states and a strong online presence through major e-commerce platforms, commenced trading on the NSE SME platform amid significant investor enthusiasm.

Listing Details of Purple United IPO

The company's market debut reflected exceptional investor confidence in its business model and growth prospects:

• Listing Time & Price: When trading commenced at market open, Purple United Sales shares debuted at ₹199 on NSE SME, delivering an impressive 58% premium to Purple United IPO investors. This strong opening validates the market's recognition of the company's established brand presence and growth trajectory in the children's fashion segment.
• Issue Price Context: The considerable premium emerged after the company had strategically priced its IPO between ₹121 and ₹126 per share, ultimately fixing the final issue price at ₹126. This pricing approach successfully balanced retail investor accessibility with fair value for the company's growth potential.
• Price Evolution: By 10:47 AM IST, investor enthusiasm continued to build, pushing the stock to ₹208.95, representing a further gain and triggering the upper circuit at 5% above the listing price, demonstrating sustained buying interest throughout the early trading session.

Purple United IPO First-Day Trading Performance 

The trading activity showed robust participation and strong investor conviction:

• Volume and Value: Within just the first few hours, 12.01 lakh shares changed hands, generating a turnover of ₹23.93 crore. Notably, 100% of traded shares were marked for delivery, indicating genuine investment interest rather than speculative trading.
• Demand Dynamics: The stock's appeal was evident in the order book, which showed tremendous buying pressure with orders for 1.14 lakh shares while sellers remained absent at the upper circuit. This imbalance highlighted strong investor belief in the company's long-term prospects.

Market Response and Subscription Analysis of Purple United 

• Market Reaction: Strong buying interest with buy orders accumulating at the upper circuit
• Subscription Rate: The IPO was significantly oversubscribed by 160.08 times, with NIIs leading at 269.7 times subscription, followed by retail investors at 155.29 times, and QIBs at 86.3 times
• Pre-listing Interest: Anchor investors demonstrated confidence by investing ₹9.34 crore before the public issue

Purple United Growth Drivers and Challenges 

Expected drivers of future performance:

• Well-positioned in growing children's products market
• Extensive quality product portfolio
• Strong design capabilities and distribution channels
• Experienced management team
• Robust financial track record

Potential challenges:

• High debt-to-equity ratio of 1.48
• Competitive fashion retail market
• Seasonal nature of business
• Expansion execution risks

Utilisation of IPO Proceeds 

The ₹32.81 crore raised will be used for:

• Opening new stores
• Working capital requirements
• General corporate purposes
   

Purple United Financial Performance 

The company has shown remarkable growth:

• Revenue increased by 67% to ₹4,291.59 lakhs in FY2024 from ₹2,571.1 lakhs in FY2023
• H1 FY2025 (ended September 2024) showed revenue of ₹3,052.04 lakhs with PAT of ₹329.28 lakhs
• Strong financial metrics with RoNW of 27.78% and ROCE of 19.35%

As Purple United Sales begins its journey as a listed entity, market participants will closely monitor its ability to execute expansion plans and maintain growth momentum. The strong listing and immediate upper circuit suggest robust investor confidence in the company's prospects in the specialized children's fashion retail sector.