The initial public offering (IPO) of CPS Shapers delivered multibagger returns to investors in debut trade on Thursday, September 7. The stock was listed on the NSE SME platform at a premium of around 143 percent at Rs 450 apiece against an issue price of Rs 185.

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The public issue had garnered bids for 14.20 crore equity shares against an offer size of 6 lakh shares, resulting in a massive 236.67 times subscription on August 31, the final day of bidding. The NSE SME issue opened for bidding on August 29.

Retail investors looked very aggressive in the bidding, as they have bought 301.02 times the portion set aside for them, while high net worth individuals have bid 198.27 times the allotted quota.

The first mover advantage, healthy financial performance, and reasonable valuations compared to peers mentioned by the shapewear maker may be some of the reasons behind robust subscription to the issue.

The company aims to raise Rs 11.10 crore from the public issue of 6 lakh shares at a price of Rs 185 per share. There's no offer for sale (OFS) component.

Of the total issue, 31,200 shares are reserved for the market maker and the remaining 5,68,800 equity shares are divided amongst retail investors and high net-worth individuals with equal ratios, i.e. 2,84,400 shares each.

As per the Red Herring Prospectus (RHP), the company plans to utilise the gross proceeds to upgrade their existing IT software at their existing manufacturing facility and registered office, buy plant and machinery for their current manufacturing facility, buy a commercial vehicle, fund capital expenditures for the purchase of a solar power system by our company, and repay or prepay, in whole or in part, borrowings that their company has accessed.

CPS Shapers compares itself with listed entities such as Page Industries, Arvind, Lux Industries, Dollar Industries and KPR Mill.

The firm has recorded good financial performance throughout the years, with profit scaling 56.7 percent year-on-year to Rs 2.46 crore and revenue rising by 38 percent to Rs 36.8 crore for the financial year that ended in March 2023.

CPS Shapers is engaged in the business of manufacturing shapewear for men and women with a Dermawear brand.

First Published:Sept 7, 2023 10:45 AM IST