Why Did Kaytex Fabrics’ Shares Drop 20% to Rs 144?
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Synopsis
Kaytex Fabrics’ much-anticipated market debut has turned sour as shares tumble by 20% to Rs 144, disappointing investors. The strong IPO response and high market expectations set the stage for a dramatic fall. What led to this unexpected outcome?
Key Takeaways
- Kaytex Fabrics listed at Rs 144, reflecting a 20% drop
- Strong IPO subscription rate of 42.70 times
- Expected listing price based on grey market premium was much higher
- Company secured approval for an IPO worth Rs 69.81 crore
- Founded in 1996, specializing in fast fashion textiles
Mumbai, Aug 5 (NationPress) Kaytex Fabrics experienced a disappointing entry into the stock market on Tuesday, with shares debuting at Rs 144 on the NSE SME platform. This marked a 20% decline from the IPO’s upper price band of Rs 180. Following the listing, the stock struggled, fluctuating between a peak of Rs 151.20 and a low of Rs 136.80 throughout the day.
The lackluster performance surprised numerous investors, especially considering the robust response to the Kaytex Fabrics IPO.
Overall, the issue garnered a subscription rate of 42.70 times, with retail investors bidding 47.85 times the allotted quota, qualified institutional buyers (QIBs) subscribing 31.16 times, and non-institutional investors (NIIs) subscribing 43.19 times.
Market predictions had set higher expectations for the debut. The IPO’s grey market premium (GMP) was pegged at +15, indicating a potential listing around Rs 195, approximately 8.33% higher than the upper price band.
However, the actual listing price fell significantly short, leading to investor disappointment. Kaytex Fabrics secured approval from SEBI for an IPO valued at Rs 69.81 crore.
This comprised a fresh issue of shares worth Rs 57.59 crore and an offer for sale of up to 679,200 equity shares, each with a face value of Rs 10.
The company established the price band for the IPO at Rs 171 to Rs 180 per share, as detailed in its public issue documentation.
Retail investors were eligible to apply for a minimum of 1,600 shares (2 lots) and could apply for a maximum of the same number allowed in the retail category.
Small high net-worth individuals (S-HNIs) had a minimum application size of 2,400 shares (3 lots), with a maximum limit of 4,800 shares (6 lots).
Founded in January 1996, Kaytex Fabrics is a dynamic textile manufacturer specializing in fast fashion that harmonizes technology, innovative designs, and expert craftsmanship.
The company manufactures fabrics from a variety of fibers such as polyester, viscose, and cotton.
It offers women’s ready-to-stitch clothing, high-quality fabrics, and trendy designs to bulk buyers and retailers.
The product lineup includes unbranded fabrics, ready-to-stitch suits, and accessories such as stoles, scarves, and shawls.
Point of View
The steep drop in Kaytex Fabrics' share price post-IPO raises questions about investor sentiment and market dynamics. The company's strong subscription rates contrasted sharply with its disappointing debut, suggesting a need for a deeper analysis of market expectations versus reality. As the nation watches, it’s crucial for companies to align their public offerings with realistic forecasts to maintain investor trust.
NationPress
19/08/2025
Frequently Asked Questions
What was the listing price of Kaytex Fabrics shares?
Kaytex Fabrics shares were listed at Rs 144 on the NSE SME platform.
How much lower was the listing price compared to the IPO price band?
The listing price was 20% lower than the IPO's upper price band of Rs 180.
What was the subscription rate for the Kaytex Fabrics IPO?
The overall subscription rate was 42.70 times.
What are the main products offered by Kaytex Fabrics?
Kaytex Fabrics offers fabrics made from polyester, viscose, and cotton, as well as ready-to-stitch clothing.
When was Kaytex Fabrics founded?
Kaytex Fabrics was founded in January 1996.
