Karnika Industries Limited is coming up with an IPO of INR 25.07 crores. The offer consists of a fresh issue of equity shares at INR 76 each. The company intends to utilize the raised funds to meet the working capital requirements of the company.
Karnika Industries Limited IPO – Important Details
|Karnika Industries IPO Date|
September 29, 2023 to October 5, 2023
|Karnika Industries IPO Listing Date||October 13, 2023|
|Karnika Industries IPO Price||INR 76 per share|
|Karnika Industries IPO Lot Size||1600 Shares|
|Karnika Industries IPO Total Issue Size||INR 25.07 crores|
|Karnika Industries IPO Basis of Allotment||October 10, 2023|
|Karnika Industries IPO Initiation of Refunds||October 11, 2023|
|Karnika Industries IPO Credit of Shares to Demat||October 12, 2023|
|Karnika Industries IPO Issue Type||Fixed Price Issue IPO|
|Karnika Industries IPO Listing At||NSE SME|
Karnika Industries Limited IPO – Company Profile
The company is an ISO 14001:2015 certified manufacturer through job work, trader and exporter of garments. The company basically manufactures through job work all types of kid’s wear, i.e., shorts, joggers, capri, tees, rompers, sleepsuits, pajamas, winter wear, infant wear, etc.
Karnika has a reputed client base, which includes various reputed Commission Agents and retail sector clients. Karnika is growing rapidly and making its presence in the market with quality and professional work.
The business process includes the use of yarn and fabrics during the manufacturing process. Besides, the company can also offer our customers fabric alternatives for their existing collections, thus creating important added values in terms of pricing, quality, and delivery terms.
Karnika Industries Limited IPO – Fundamental Analysis
Karnika Industries has exhibited significant revenue growth over the past three years, increasing from ₹4,746.41 lakhs in 2021 to ₹12,459.24 lakhs in 2023, indicating a robust top-line performance.
The company’s profitability, as measured by profit after tax, has shown substantial improvement. It increased from ₹81.61 lakhs in 2021 to ₹826.74 lakhs in 2023.
Return on Net Worth (RoNW):
RoNW, a key metric for evaluating efficiency, has seen a remarkable rise. It stood at 21.58% in 2021, and increased to 45.76% in 2023, showcasing efficient equity utilization.
Earnings Per Share (EPS):
Diluted EPS has shown significant growth, increasing from ₹1.17 in 2021 to ₹9.66 in 2023, reflecting impressive earnings per share.
Net Asset Value (NAV) per Equity Share:
NAV per equity share has also seen notable growth, rising from ₹10.80 in 2021 to ₹19.85 in 2023, indicating an increase in intrinsic value per share.
Asset and Liability Management:
The company’s total assets have significantly increased from ₹3,055.87 lakhs in 2021 to ₹10,071.04 lakhs in 2023, signifying substantial asset expansion. Liabilities have also grown, reflecting a balanced financial structure.
Karnika Industries demonstrates robust revenue and profitability growth, reflecting its strong financial performance. The increasing RoNW and EPS, along with expanding assets, make it an attractive investment opportunity. However, investors should consider factors like industry trends and competitive positioning before investing.
Karnika Industries Ltd IPO Financial Information
|Particular||As at 31 March 2021||As at 31 March 2022||As at 31 March 2023|
|Revenue (₹ in lakhs)||4,746.41||9,880.93||12,459.24|
|Equity (₹ in lakhs)||378.14||1,860.88||1,806.83|
|Expenses (₹ in lakhs)||4,654.03||9,175.51||11,492.07|
|Profit and Loss After Tax (₹ in lakhs)||81.61||454.01||826.74|
|Diluted EPS only (₹)||1.17||6.49||9.66|
|NAV per Equity Share (₹)||10.80||53.17||19.85|
|Total Assets (in lakhs)||3055.87||5921.42||10071.04|
|Total Liabilities (in lakhs)||2,677.73||4,060.54||8,264.21|
Karnika Industries Ltd IPO Peer Comparison
Karnika Industries shows a relatively low P/E of 7.57 with a solid RoNW of 45.76%. In contrast, S.P. Apparels has a higher P/E and lower RoNW, while Veekayem Fashion and Apparels has a lower P/E and RoNW. Investors should consider these factors.
|Company||Face Value per Equity Share (₹)||P/E||EPS (Basic) (₹)||RoNW (%)||NAV per Equity Share (Basic) (₹)|
|Karnika Industries Limited||10||7.57||9.66||45.76%||19.85|
|S.P. Apparels Limited||10||8.91||36.02||12.62%||269.03|
|Veekayem Fashion and Apparels Limited||10||11.67||3.44||4.68%||63.34|
Karnika Industries Limited IPO Objective
Karnika Industries Limited’s IPO aims to raise funds for working capital needs (Rs. 20 crores) and general corporate purposes, including technology advancements, branch expansion, and business growth.
- Funding working capital requirement: The company’s business is working capital intensive; hence it will meet the requirement to the extent of Rs.20 crores from the net proceeds of the issue.
- General corporate purpose: The company plans to deploy the balance funds towards general corporate purpose, which is not limited to meeting expenses incurred in the ordinary course of business such as strategic initiatives, including the advancement of information technology, meeting future branches and business expansion, etc.
Karnika Industries Limited IPO Risks And Challenges
Karnika Industries’ reliance on job work, top customers, and suppliers makes it vulnerable to operational disruptions. Foreign exchange fluctuations and ongoing negative cash flows further pose financial risks, potentially hindering its growth and stability.
- The company is dependent on Job work for manufacturing of the products; any disruption to the operations on account of job work may have an effect on the business, results of operations, and financial condition.
- As of 31.03.2023, almost 54% of the revenue was generated from top 10 customers. Any loss of business from one or more of them may adversely affect the revenues and profitability. Similarly, the company is dependent on 10 suppliers for almost 45% of the purchases.
- The company is subject to foreign currency exchange rate fluctuations, which could have a material and adverse effect on the results of operations and financial conditions.
- The company has had negative cash flows from its operating, investing, and financing activities for the last 3 years. Any such recurrence in future could impact the growth and business.
Karnika Industries Limited IPO – Industry & Market Potential
India’s textiles sector is one of the oldest industries in the Indian economy, dating back to several centuries. The industry is extremely varied, with hand-spun and hand-woven textiles sectors at one end of the spectrum with the capital-intensive sophisticated mills sector at the other end.
The fundamental strength of the textile industry in India is its strong production base of a wide range of fiber/yarns, from natural fibers like cotton, jute, silk, and wool to synthetic/man-made fibers like polyester, viscose, nylon, and acrylic.
The Indian textile and apparel industry is expected to grow at 10% CAGR from 2019-20 to reach US$ 190 billion by 2025-26. India has a 4% share of the global trade in textiles and apparel
The future of the Indian textiles industry looks promising, buoyed by strong domestic consumption as well as export demand. India is working on various major initiatives to boost its technical textile industry.
Karnika Industries Ltd IPO – Type of Offer
The company will issue new shares to raise capital, aiming to collect INR 25.07 Crores. This fund will be utilized towards meeting the working capital requirement of the company.
Karnika Industries Limited IPO Offer Size
Karnika Industries Limited plans to launch an IPO worth INR 25.07 crores, comprising a new equity share issue priced at INR 76 per share. The company aims to use the proceeds to fulfill its working capital needs.
Karnika Industries Limited IPO Allotment Structure
The Karnika Industries IPO allotment structure allocates shares to Retail Individual Investors (RII), Others, and Market Makers. RIIs can apply for up to INR 2 lakhs, while Others have applications exceeding INR 2 lakhs. Market Makers are reserved 1,66,400 shares (5.04% of the total).
Retail Individual Investors (RII): The application value does not exceed INR 2 lakhs. These individual investors apply for shares with a total value of less than Rs. 2 lakhs.
Other than retail individual investors: Such applications where the value exceeds INR 2 lakhs
Market Maker Reservation: Total of 1,66,400 equity shares are reserved for market makers. This forms 5.04% of the total issue.
How to apply for the Karnika Industries Ltd IPO?
To apply for the Karnika Industries IPO through Alice Blue, you would typically follow these steps:
1. Open a Demat and Trading Account: If you don’t have one already, you would need to open a Demat and trading account with Alice Blue.
2. Check for IPO Details: Once your account is active, you can check for the Karnika Industries IPO details in the IPO section of the Alice Blue platform.
3. Place the Bid: Enter the number of shares you wish to buy and place your bid within the IPO’s price band.
4. Submit the Application: Confirm all your details and submit your application.
You can apply for Karnika Industries IPO at Alice Blue in just a few clicks!
Check Allotment Status: Post the allotment process, you can check the allotment status to see if you have received any shares.
Please note that the allotment of shares is not guaranteed and will depend on the demand for the IPO.
How to Check Karnika Industries IPO Allotment Status on Alice Blue?
Checking the allotment status of an IPO in Alice Blue is usually straightforward. Please follow these general steps:
1. Log in to your Alice Blue Account: You can do this through the Alice Blue website or their trading app.
2. Navigate to the Portfolio or IPO Section: This might differ based on the layout of Alice Blue’s platform, but generally, you can find the status of your IPO application under the ‘Portfolio’ or ‘IPO’ section.
3. Find the IPO Allotment Status: Look for a sub-section called ‘IPO Allotment Status’ or something similar. This is where you can see the status of the IPOs you have applied for.
4. Select the Karnika Industries IPO: If you have applied for multiple IPOs, there might be a dropdown menu or a list where you can select the IPO you are interested in. Select the Karnika Industries IPO.
5. Check the Status: The status of your application should be displayed here. If the shares have been allocated to you, it would be mentioned here.
If you face any issues, it’s recommended to contact Alice Blue’s customer support for detailed assistance.
Apart from Alice Blue, there are other ways to check the allotment status of the Karnika Industries IPO:
Registrar’s Website: Visit the website of Skyline Financial Services Private Limited, the registrar of the Karnika Industries IPO. On the homepage, look for the ‘IPO Allotment Status’ option. You must enter your PAN and application number or Demat account number to check your allotment status. Click on the ‘Submit’ button to view your IPO allotment status.
NSE SME: You can also check the allotment status on the official websites of the National Stock Exchange (NSE) SME Platform. You would need your application number and PAN to check the status.
Please note that the allotment status will only be available after the allotment process has been completed, a few days after the IPO window closes.
Karnika Industries Ltd IPO Offer Registrar
The registrar for the Karnika Industries Limited’s IPO is Skyline Financial Services Private Limited. They are responsible for ensuring the IPO allotment and refund processes are carried out smoothly.
Contact information for the registrar:
Skyline Financial Services Private Limited
D-153 A, 1st Floor Okhla Industrial Area, Phase – I,
New Delhi – 110020,
Tel No.: 011-40450193-97
Email: [email protected]
Karnika Industries Limited IPO FAQs
1. What is the allotment date of the Karnika Industries Limited IPO?
The allotment date is 10th October 2023.
2. What is the price band of the Karnika Industries Limited IPO?
The price is INR 76 per share.
3. What is the size of the Karnika Industries Limited IPO?
Karnika Industries Limited plans to launch an IPO worth INR 25.07 crores, comprising a new equity share issue priced at INR 76 per share. The company’s objective is to use the proceeds to fulfill its working capital needs.
4. What is the listing date of the Karnika Industries Limited IPO?
The listing date is October 13, 2023.