New Delhi, Sept 5 (HS):
Shares of Snehaa Organics, a company engaged in solvent recovery, had a disappointing debut on the stock market Friday. The stock was listed on the NSE’s SME platform at its issue price of ₹122 per share, showing no premium.
However, heavy selling pressure soon dragged the stock to the lower circuit limit of ₹115.90, leaving IPO investors nursing a 5% loss on the very first day of trading.
Snehaa Organics had raised ₹32.68 crore through its Initial Public Offering (IPO), which opened between August 29 and September 2. The IPO received an enthusiastic response from investors, being oversubscribed 27.75 times overall.
-Qualified Institutional Buyers (QIBs): 42.19x subscription
-Non-Institutional Investors (NIIs): 16.23x subscription
-Retail Investors: 37.75x subscription
Under the offering, the company issued 26.79 lakh new shares with a face value of ₹10 each. The funds raised are earmarked for debt reduction, working capital requirements, and general corporate purposes.
Financial Performance
According to its prospectus, Snehaa Organics has shown a steady improvement in financial performance:
Net Profit:
-FY 2022–23: ₹3.25 crore
-FY 2023–24: ₹2.66 crore
-FY 2024–25: ₹7.34 crore
Revenue: Grew at a CAGR of over 13%, reaching ₹26.29 crore in FY 2024–25.
At the same time, the company’s debt burden has increased significantly:
-FY 2022–23: ₹3.59 crore
-FY 2023–24: ₹3.92 crore
-FY 2024–25: ₹9.09 crore
Analysis: Despite strong subscription demand, the weak listing and immediate lower circuit suggest that investors are cautious about rising debt levels and the sustainability of earnings growth.
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Hindusthan Samachar / Jun Sarkar
