Karnika Industries Limited IPO - Review, Valuation & GMP Today

Karnika Industries Limited - Complete Overview

Established in 2017, Karnika Industries Limited, formerly known as Karni International, is a manufacturer through job work, trader and exporter of garments. 

The company specializes in job work manufacturing of various kids' wear items, including but not limited to shorts, joggers, capri pants, t-shirts, rompers, sleepsuits, pyjamas, winter wear, and infant wear.

Karnika Industries Limited has meticulously established manufacturing facilities that encompass designing, sample preparation, quality inspection, ironing and packaging of garments. These facilities are equipped with modern machinery and tools essential for efficient production.

The company markets its products under the brand name "KARNIKA" and offers a range of subcategories such as KARNIKA Care, KARNIKA Cool, KARNIKA Cube, KARNIKA Life, KARNIKA Key, and KARNIKA Club.

Karnika has built a reputable client base, which includes various respected Commission Agents and clients in the retail sector.

 

What does the company do?

Karnika Industries Limited is a manufacturer through job work, trader and exporter of garments. 

 

Company Products

Shorts, joggers, capri pants, t-shirts, rompers, sleepsuits, pyjamas, winter wear, and infant wear.

 

 

IPO Overview 

The Karnika Industries Limited IPO date is set from September 29, 2023, to October 5, 2023. This SME IPO is a Fixed Price Issue IPO.

The Karnika Industries Limited IPO price is established at Rs. 76 per share, and the total issue size for the upcoming SME IPO is Rs. 25.07 Crores.

In terms of allocation, the company has earmarked 50% for retail investors and the remaining 50% for other investors.

 

Karnika Industries Limited IPO timetable (Tentative)

Events	Date
IPO Opening Date	29 September 2023
IPO Closing Date	5 October 2023
IPO Allotment Date	10 October 2023
Refund initiation	11 October 2023
IPO Listing Date	13 October 2023

 

Karnika Industries Limited IPO Details 

IPO Opening & Closing Date	29 September to 5 October 2023
Face value	Rs.10 per share
Issue Price	Rs.76 per share
Lot Size	1600 per share
Price of 1 lot	Rs. 121,600
Issue Size	3,299,200 Shares (aggregating up to Rs. 25.07 Cr)
Offer for sale	NA
Fresh issue	3,299,200 Shares (aggregating up to Rs. 25.07 Cr)
Listing at	NSE SME
Issue Type	Fixed Price Issue IPO
Registrar	Skyline Financial Service Pvt. Ltd.

 

Karnika Industries Limited IPO Lot Details 

Minimum Lot Investment (Retail)	1 Lot
Maximum Lot Investment (Retail)	1 Lot
Minimum Lot Investment (HNI)	2 Lot

 

Karnika Industries Limited IPO Reservation

Other Investors Share Portion	50%
Retail Investors Share Portion	50%

 

Company Financial

Amount in Lakhs

Period	FY 21	FY 22	FY 23
Total Assets	3,055.87	5,921.42	10,071.04
Total Revenue	4,779.31	9,892.52	12,605.62
PAT	81.61	454.01	826.74
Net worth	378.14	1,860.88	1,806.83
Reserve & Surplus			896.80
Total Borrowings	1,570.94	2,224.13	5,245.53

 

Objective of the Issue 

The Net Proceeds from the Fresh Issue will be deployed for the following purposes:

• Fulfilling Working Capital Needs
• Covering General Corporate Expenses
• Meeting the Expenses Associated with the Issue.

 

Promoters and Management of Karnika Industries Limited

Mr. Niranjan Mundhra, Mr. Shiv Shankar Mundhra and Mr. Mahesh Kumar Mundhra are the Promoters of the Company.

Pre-issue Promoter Shareholding	100.00%
Post-issue Promoter Shareholding	73.39%

 

Peer Comparison 

Below are the listed peers of Karnika Industries Limited

Company Name	EPS (Rs.)	P/E Ratio
Karnika Industries Limited	9.66	7.57
S.P. Apparels Limited	36.02	8.91
Veekayem Fashion and Apparels Limited	3.44	11.67

 

IPO's Valuations

Karnika Industries Limited IPO price is Rs. 76 per share and an EPS of Rs. 9.66. To assess the IPO valuation of the company, we calculated the above data which resulted in a PE ratio of 7.86.

 

Dividend Policy 

According to the Karnika Industries Limited IPO DRHP, the company has not distributed any dividends in the past. Furthermore, any future dividend payments will be contingent on the company's financial earnings.

 

IPO's Strengths 

• A wide-ranging product portfolio.
• Reliable maintenance of quality and service standards.
• Efficient and cost-effective production with timely order fulfilment.
• A scalable business model.
• Organizational stability coupled with management expertise.
• Established client relationships and a high level of customer satisfaction.

 

IPO Weaknesses 

• The company has substantial power needs to ensure the continuous operation of its factories.
• The company relies on Job work for the manufacturing of its products.
• There are ongoing legal proceedings involving both the Company and a Group Company.
• The restated financial statements have been prepared by chartered accountants who have undergone peer review but are not the statutory auditors of the Company.
• The top ten customers collectively contribute the majority of the company's operational revenues.
• The company requires specific approvals and licenses as part of its regular business operations.
• The company lacks long-term agreements or contracts for the supply of raw materials, making it susceptible to price and supply fluctuations.
• The company faces exposure to fluctuations in foreign currency exchange rates.
• In the past, there have been instances of delays with certain statutory authorities and non-compliance with specific provisions of statutory regulations applicable to the company.
• The company faces competition in its industry from both organized and unorganized players.

 

 

IPO GMP Today

Karnika Industries Limited IPO GMP is not yet available.

 

Conclusion

Karnika Industries Limited operates in the competitive kids' wear industry, sourcing products through job work arrangements with third-party suppliers. The company has consistently maintained profitability. Investors are advised to consider all relevant factors before applying for the issue.

 

Finowings IPO Analysis

Hope you enjoyed the Finowings IPO Analysis. We tried our best to give every required detail about the company that you should know before applying to the IPO. 

You must consult your financial advisor before making any financial decisions. 

To Apply for the IPO, Click Here.

 

To Read the Prospectus of the Company Click Here to Download the DRHP.

 

 

Thank You for reading this blog.
Hope you loved the IPO analysis.
Please Comment Below with your feedback because Your feedback motivates us to deliver more such content.

 

Follow MUKUL AGRAWAL for the latest IPO news and reviews. You can connect with us on social media platforms like Twitter, Facebook, and Instagram. You can also subscribe to our YouTube Channel for the latest videos of the stock market.