Kusumgar
IPO Size: Rs. 650 cr, Entirely Offer for Sale (OFS)
- By promoter (90% to shrink to 75% post IPO)
Price band: Rs. 398-419 per share
M cap: Rs. 4,400 cr, implying 15% dilution
IPO Date: Wed 8th Jul to Fri 10th Jul 2026, Listing Wed 15th Jul 2026
Grey Market Premium (GMP): We are strongly against ‘grey market premium’ as it is an unofficial figure, against SEBI guidelines.
Engineered Fabrics Manufacturer
Kusumgar is a 56 years old, Mumbai-based manufacturer of synthetic or engineered fabrics such as polyamides, polyester filaments and polyurethane chemistry, used in aerospace, defence, automotive and industrial and lifestyle purposes, with each segment being roughly a quarter of company’s Rs. 700 cr topline.
Capacity Increased Last Year
Company has 6 manufacturing facilities in Gujarat and one fabrication unit in Uttar Pradesh. As utilization reached 94% in FY24, it invested Rs. 100 cr to increase processing capacity by 170%, to 128 million meters, which is now utilized about 50%.
High Margin Business
Due to strong entry barriers and high-performance nature of products, company’s margins are strong – 60% gross, 26% EBITDA and 14% net. Company’s production volume increased at 28% CAGR between FY23 to FY26, with revenue rising at 51% CAGR.
Defence business is lumpy, fluctuating annual revenue and working capital (especially debtors). Moreover, 40% topline comes from exports, with nearly 10% from US, which were impacted due to tariffs, in FY26. Thus, company’s revenue declined 11% YoY in FY26 to Rs. 692 cr, from Rs. 779 cr in FY25 and PAT dropped 13% YoY to Rs. 98 cr, from Rs. 112 cr in FY25.
However, in Q4FY26, company bagged defence order in India. Along with lifting of steep US tariffs, outlook remains positive for the ongoing fiscal. On small equity of Rs. 10.5 cr (face value Re. 1 each), EPS stood at Rs. 9.3 for FY26. On net worth of Rs. 501 cr, net debt stands at Rs. 160 cr, rated A (stable) by CARE, leading to comfortable net debt to equity ratio of 0.3:1.
Trade receivables jumped to Rs. 233 cr as of 31.3.26, due to stronger Q4FY26 as appear steep on account of a smaller base of Rs. 56 cr as of 31.3.25.
Attractive Pricing
M cap Rs. 4,400 cr and enterprise value of Rs. 4,550 cr lead to a PE multiple of about 35x, based on FY27E EPS of around Rs.12. This may appear steep for fall in FY26 financials, but is seen attractive for last 4 years growth, niche product profile, recently increased capacity, mid-teen net margin and 25% RoE.
Although not an exact peer, Garware Technical Fibres, manufacturing technical textiles such as polymer ropes, fishing nets, safety nets etc., clocks a larger topline of Rs. 1,530 cr, but lower margins (20% EBITDA, 13% net, 16% RoE), and is trading at similar PE. Thus, there exists some room for expansion in valuation multiple, especially if FY27 growth is in double-digit.
In Sep 2025, company had raised Rs. 128 cr in primary capital, while promoters did Rs. 200 cr secondary, both at Rs. 365 per share. After 10 months of last transaction, the IPO is priced at 15% premium.
8th Jul 2026 at 10:47 am
7th Jul 2026 at 10:48 pm
7th Jul 2026 at 07:20 pm