Arunaya Organics IPO Listing: Share Hits Upper Circuit But Investors Face 45% Loss
Arunaya Organics IPO made a weak debut on NSE SME, listing at a 48% discount. Despite hitting the upper circuit, investors are still facing a 45% loss. Read full details here.
Arunaya Organics IPO Listing: Upper Circuit While Listing Arunaya Organics Investors Continue to Lose 45%
Update on Arunaya Organics IPO Listing:
A company that specializes in the manufacture of chemicals, Arunaya Organics, debuted on the NSE SME platform today but split at a 50% discount to its IPO price. This is shocking considering that the company was expected to trade at around ₹58 based on the oversubscription, which was reported at 2.5x.
The IPO was ill-timed given the geopolitical headwinds with India launching ‘Operation Sindoor’ post the Pahalgam terror attacks and hitting suspected terror bases in Pakistan. Despite the context, the IPO garnered a decent amount of interest. Regardless of these sentiments, Arunaya Organics’ IPO was reportedly oversubscribed by more than 2.5 times which meant that the IPO price of ₹58/share was apparently a good deal in the eyes of many retail participants.
Performance After Listing:
As has become customary with these IPOs, the stock opened today at ₹30.10 which marks a 50% haircut day one for most investors. Post a listing celebration the stock bounced and went limit up to 31.60. Despite this, investors who purchased shares at IPO price now face a loss of 45.52%.
How Arunaya Organics Plans to Use the IPO Funds:
The company’s annual revenue requirement of ₹33.99 crores opened Arunaya Organics’s IPO from April 29 to May 2. There was tremendous interest:
- The Bracketed Qualified Institutional Buyers (BQBIs): 1.01 times their quota.
- Non-Institutional Investors (NII): 1.49 times their quota.
- Retail Investors: 4.33 times their quota.
Of total issue, ₹30.51 crore was set aside for new shares, and 6 lakh shares (face value of ₹10 each) were sold through an offer for sale (OFS). Existing shareholders received the proceeds from the OFS.
The fresh capital raised from the IPO will be used as follows:
- Setting up new manufacturing plants consumes ₹11.79 crore.
- Routine functioning of the business: ₹9 crore.
- The remainder for miscellaneous initial public offering expenses.
About Arunaya Organics:
Arunaya Organics was established in 2010 and today specializes in manufacturing and exporting specialty dyes. The company operates in industries such s textile, paints, plastic, mining, and food processing, and produces high quality chemical products.
It has a production unit at Naroda in Ahmednagar, Gujarat that is capable of manufacturing around 30 tonnes a year.
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Financial Overview:
Net Profit & Revenue figures of a company in INR crore:
- FY22: 1.33 crore | 62.26 crore
- FY23: 1.73 crore | 76.37 crore
- FY24: 4.06 crore | `62.79 crore
- FY25 (Apr-Dec 2024): 3.60 crore | 58.21 crore
Amid reasonable profits, weak listing performance of the stock has dampened investor sentiment.
