KP Green Engineering, the biggest ever SME IPO, to hit Dalal Street on March 15

KP Green Engineering IPO opens on March 15

KP Green Engineering, the fabricated and hot-dip galvanised steel products manufacturer, is going to launch the biggest ever IPO in the SME (small and medium enterprise) segment in the coming week on March 15.

The initial public offering of 1,31,60,000 equity shares will close on March 19, while the anchor book will be opened for a day on March 14.

The company is planning to raise Rs 189.5 crore through its public issue at the upper price band, comprising only a fresh issue with no offer-for-sale component.

The price band for the book built issue has been fixed at Rs 137-144 per equity share.

The Gujarat-based KP Group company has reserved 6.58 lakh equity shares for the market maker, and the issue less the market maker reservation portion is the net issue. Further, half of the issue size has been reserved for qualified institutional buyers, 15 percent for non-institutional investors, and remaining 35 percent shares are for retail investors.

Investors can bid for a minimum of 1,000 equity shares and in multiples of 1,000 shares thereafter. Retail investors can bid for only Rs 1.4 lakh worth of shares, i.e. one lot, as they are allowed to invest up to Rs 2 lakh in any IPO.

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In the SME segment, till now, Spectrum Talent Management's Rs 105 crore offer was the largest IPO, followed by Aashka Hospitals which garnered Rs 101.6 crore, data from Chittorgarh.com shows.

KP Green Engineering that provides several products such as lattice towers, substation, and solar module mounting structures, and cable trays, earthing strips, and beam crash barriers, will spend Rs 156.1 crore out of the net fresh issue proceeds for setting new manufacturing unit to expand its current production capabilities as well as expanding current product portfolio. The remaining fresh issue money will be used for general corporate purposes.

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The company operates the business through manufacturing facility in Vadodara. Now, it is further planning to expand the existing line of business along with addition of new products to portfolio at new manufacturing plant in Bharuch. The new facility will have a capacity of more than 2.94 lakh MT, a substantial increase from its current capacity of 53,000 MT at the existing plant.

In the new plant, it is planning to introduce new line of products including high masts, floor gratings, pre-engineered buildings and heavy fabrications.

KP Green Engineering has recorded standalone net profit at Rs 12.4 crore for the financial year ended March FY23, increasing substantially from Rs 4.5 crore in previous year, and the revenue from operations growing to Rs 114.2 crore, from Rs 77.7 crore during the same period.

In the six months period ended September FY24, the company already reached closer to its topline and bottomline of FY23, with net profit at Rs 11.3 crore on revenue of Rs 103.93 crore.

Beeline Capital Advisors is the sole book running lead manager to the issue. The equity shares are proposed to be listed on the BSE SME.