Kross debuts flat on BSE, NSE at Rs 240; no listing gain for investors

Shares of auto parts manufacturer Kross made a sluggish start on the bourses on Monday. On the BSE, Kross shares listed at Rs 240, synonymous with its the issue price of Rs 240. On the NSE, too, Kross shares listed at Rs 240 offering no listing gain to its shareholders.

However, at 10:13 AM; the company's shares were trading in green, rising 9.08 per cent at Rs 261.80 per share on the BSE. Meanwhile, the shares rose 8.81 per cent to Rs 261.15 a piece on the NSE.

Despite a robust subscription of 17 times, the listing's lack of premium suggests a cautious approach from investors, according to Shivani Nyati, Head of Wealth at Swastika Investmart. While Northern Arc Capital boasts strong fundamentals, such as backward integration, long-term client relationships, and consistent financial growth, the industry's relatively high valuation and potential challenges may have tempered investor enthusiasm.

"Investors who participated in the IPO may consider holding their shares while closely monitoring the company's performance and market conditions, and setting a stop-loss at the issue price," Nyati advised.

Prior to its official listing, Kross shares were commanding a premium of Rs 24.50 in the grey markets, according to sources monitoring grey market trends. This translated to a Grey Market Premium (GMP) of 10.21 per cent over the IPO issue price of Rs 240, signalling a modest gain for the company's shares on their market debut.

The public issue of the Jamshedpur-based company received a positive response from investors, as it received bids for 25,80,21,866 shares against the 1,53,50,877 shares offered, resulting in an oversubscription of 16.81 times by the final day of subscription. Kross IPO consists of a fresh issue of shares and an offer for sale of 10,416,667 shares with a face value of Rs 5 each.

According to NSE data, the portion for Qualified Institutional Buyers (QIBs) received 23.32 times subscription, while the quota for non-institutional investors got subscribed 22.24 times. The Retail Individual Investors (RIIs) part garnered 10.76 times subscription. The allotment of the company's shares was finalised on Thursday, September 12, 2024.

The IPO was available at a price band of Rs 228-240, with a lot size of 62 shares for investors. Kross, on Friday, September 6, 2024, announced that it has mobilised Rs 150 crore from anchor investors. 

The public issue of Kross, received mostly favourable reviews from the brokerages including BP Wealth Management, Deven Choksey Research, and SBI Securities. READ MORE

The company intends to utilise the net proceeds of the fresh issue for the purchase of machinery and equipment, payment of debt, and funding the working capital requirements of the company. In addition to that, a portion will be used for general corporate purposes.

About Kross

Founded in 1991, Kross, formerly known as Kross Manufacturers (India), is a diversified player focused on manufacturing and supplying trailer axle and suspension assembly and a wide range of forged and precision-machined high-performance safety-critical parts for medium and heavy commercial vehicles and agricultural equipment segments.