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10 October 2023

Kundan Edifice IPO: Illuminating the Future with LED Innovations

Introduction:

Kundan Edifice Limited, founded in 2010, is a leading player in the LED lighting industry. The company specializes in the manufacturing, assembly, and sale of light-emitting diode (LED) strip lights. Kundan Edifice operates as an original design manufacturer (ODM), designing, developing, and supplying LED products to customers who distribute them under their own brands. They also offer custom LED solutions.

IPO Overview:

Kundan Edifice conducted its IPO, raising Rs 25.22 crores through a fresh issue of 27.72 lakh shares. The IPO subscription window was open from September 12, 2023, to September 15, 2023. The allotment took place on September 21, 2023, and the shares were listed on NSE SME on September 26, 2023. The IPO was priced at ₹91 per share, with a minimum lot size of 1200 shares and a minimum investment requirement of ₹109,200 for retail investors.

Key Players:

Fedex Securities Pvt Ltd acted as the book running lead manager for the Kundan Edifice IPO, while Cameo Corporate Services Limited served as the registrar for the issue. Gretex Share Broking played the role of the market maker for this IPO.

Stock Performance:

As of October 6, 2023, Kundan Edifice Limited's stock was trading at ₹73.70, reflecting a 4.99% increase. The stock opened at ₹71.95, reached a high of ₹73.70, and touched a low of ₹66.85. The previous closing price was ₹70.20, with a total traded value of 1,41,600 shares.

Ownership Structure:

Pre-issue shareholding was at 99.00%, and post-issue, it stands at 72.28%.

Financial Performance:

Kundan Edifice has showcased impressive financial growth. As of March 31, 2023, the company's assets amounted to ₹2,965.84 crores, with revenue reaching ₹6,046.36 crores. The profit after tax was ₹513.09 crores, and the net worth of the company was ₹810.81 crores, with reserves and surplus of ₹60.81 crores. The total borrowing as of that date stood at ₹1,450.61 crores.

Performance Indicators:

Key performance indicators for the Kundan Edifice IPO included a Price-to-Earnings (P/E) ratio of 13.3 and a Market Capitalization of ₹93.48 crores.

Objectives of the Issue:

The net proceeds from the IPO were earmarked for the following purposes:

1. Meeting incremental working capital requirements.
2. General corporate purposes.

Expert Opinion:

Recommended that well-informed investors consider this IPO for medium to long-term rewards. While the sudden boost in FY23 performance raised some concerns over sustainability, Kundan Edifice's growth trajectory and position in the LED industry make it an attractive investment opportunity.

Subscription Status:

The Kundan Edifice IPO received significant interest from investors, with a subscription rate of 42.27 times as of September 15, 2023. Retail investors displayed strong interest with a subscription rate of 44.13 times. Non-Institutional Investors (NII) also participated actively, with a subscription rate of 35.68 times.

Conclusion:

Kundan Edifice Limited's journey in the LED lighting industry, coupled with its strong financial performance, positions it as a promising player in the sector. However, investors should conduct a thorough analysis of the company's growth prospects and financials before considering this IPO. As always, align your investment decisions with your financial goals and risk tolerance.

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