Karnika Industries
Listing performance
Scheduled dates
Tentative timetable — a past date is not confirmation the step completed
Issue details
- IPO date
- 29 Sep 2023 – 05 Oct 2023
- Listing date
- 12 Oct 2023
- Face value
- ₹10 per share
- Issue price
- ₹76 per share
- Lot size
- 1,600 shares
- Issue type
- Fixed Price issue
- Total issue size
- ₹25.07 Cr
- Market cap at offer price
- ₹94.24 Cr
- Promoter holding
- 100.00% → 73.39% pre-issue → post-issue
- ISIN
- INE0MGA01012
- Registrar
- Skyline Financial Services Pvt.Ltd.
- Lead managers
- Beeline Capital Advisors Pvt.Ltd.
- Registered office
- 6&6/1, Gurgola Ghat, Road P.O.Salkia, West Bengal
Reservation and application size
How the issue is split between investor categories, and what each may bid
| Investor category | Shares | % of net | % of total |
|---|---|---|---|
| Market maker | 1,66,400 | — | — |
Application size
Minimum 1,600 shares per lot, in multiples, at ₹76
| Application | Lots | Shares | Amount |
|---|---|---|---|
| Retail (min) | 1 | 1,600 | ₹1,21,600 |
| S-HNI (min) | 2 | 3,200 | ₹2,43,200 |
| S-HNI (max) | 8 | 12,800 | ₹9,72,800 |
| B-HNI (min) | 9 | 14,400 | ₹10,94,400 |
Category limits
| Category | Bid size | Cut-off |
|---|---|---|
| Retail (RII) | Up to ₹2 lakh | Yes |
| Small HNI (sNII) | ₹2 lakh – ₹10 lakh | No |
| Big HNI (bNII) | Above ₹10 lakh | No |
| Employee | Up to ₹5 lakh | Yes |
Bidding at cut-off means accepting the final issue price without naming one. Only retail and employee applicants may do so.
Valuation and performance
Valuation at offer price
| Metric | Pre-issue | Post-issue |
|---|---|---|
| EPS (₹) | 9.66 | — |
| P/E (×) | 7.87 | — |
| Market cap | — | ₹94.24 Cr |
Key performance indicators
- Return on net worth
- 45.76%
- Debt / equity
- 2.90
- PAT margin
- 6.64%
- NAV per share
- ₹19.85
Single period as reported. Year-on-year movement is in the financials table below, where every period is published.
About Karnika Industries
Karnika Industries Limited was originally formed as a partnership firm 'Karni International' on July 21, 2017, and converted to a public limited company on April 13, 2022. The company manufactures all types of kids wear predominantly through job work, with in-house capabilities for designing, sample preparation, quality inspection, ironing and packing. It operates two manufacturing units in West Bengal—one in Howrah (for design, sampling and finishing) and one in Banipur (leased). The company sells primarily to organized retail and e-commerce customers, with significant revenue concentration among top ten customers. As of March 31, 2023, total revenue was ₹12,605.62 lakhs with a profit after tax of ₹826.74 lakhs.
Company Analysis
from RHPKarnika Industries Limited is an ISO 14001:2015 certified manufacturer, trader and exporter of kids wear garments, primarily through job work, operating in the Indian apparel manufacturing and retail sector.
Karnika Industries Limited was originally formed as a partnership firm 'Karni International' on July 21, 2017, and converted to a public limited company on April 13, 2022. The company manufactures all types of kids wear predominantly through job work, with in-house capabilities for designing, sample preparation, quality inspection, ironing and packing. It operates two manufacturing units in West Bengal—one in Howrah (for design, sampling and finishing) and one in Banipur (leased). The company sells primarily to organized retail and e-commerce customers, with significant revenue concentration among top ten customers. As of March 31, 2023, total revenue was ₹12,605.62 lakhs with a profit after tax of ₹826.74 lakhs.
Objects of the Issue
- To Meet Working Capital Requirement ₹2,000.00 lakhs p.18
- General Corporate Expenses ₹457.39 lakhs p.18
- Public Issue Expenses ₹50.00 lakhs p.18
- To Meet Working Capital Requirement Rs. 2,000.00 lakhs p.73
- General Corporate Purpose Rs. 457.39 lakhs p.73
- Working Capital Requirement p.204
- General Corporate Purposes p.204
- Issue Expenses p.204
Issue Structure
- Total Issue
- ₹2,507.39 lakhs
- Fresh Issue
- 32,99,200 Equity Shares of ₹10/- each for cash at a price of ₹76/- per share aggregating to ₹2,507.39 lakhs
- Offer for Sale
- Nil
- Price Band
- ₹76/- per equity share (Fixed Price)
- Face Value
- ₹10/- per equity share
Business Model
The company earns revenue through manufacturing and selling kids wear garments. The production model relies on job work—the company designs products, procures raw materials, sends them to job workers for bulk manufacturing, and then conducts finishing (ironing and packing) in-house before dispatch. Revenue is generated from sales to retail customers, with top ten customers contributing 54.49% of revenues in FY 2023.
Business Segments
SWOT Analysis
- • ISO certified manufacturer with established manufacturing infrastructure(p.18)
- • Established relationships with significant customers generating majority of revenues(p.28)
- • Growing profitability with strong PAT growth trajectory(p.19)
- • Diversified product portfolio across kids wear segments(p.99)
- • Stringent quality standards and consistency(p.99)
- • Cost-effective production and timely order fulfillment(p.99)
- • Scalable and proven business model(p.99)
- • Experienced management team with 7+ years industry experience(p.99)
- • Strong existing client relationships and customer retention(p.100)
- • High customer satisfaction with quality and service(p.100)
- • ISO 14001:2015 certification and modern infrastructure(p.98)
- • ISO 14001:2015 environmental certification and hi-tech manufacturing infrastructure(p.180)
- • Strong profitability trajectory with 82% PAT growth year-over-year(p.185)
- • Experienced management team with 7+ years industry experience(p.181)
- • Successful job work model enabling bulk orders and timely delivery(p.180)
- • International market presence in Middle East and Gulf region(p.185)
- • Multiple recognized brand categories across diverse product segments(p.180)
- • High dependence on job work process with limited control over manufacturing(p.26)
- • Properties not owned; dependent on Leave and License Agreements and lease arrangements(p.28)
- • Substantial outstanding indebtedness requiring significant cash flows for repayment(p.30)
- • High concentration among top suppliers affecting supply security(p.28)
- • Recent conversion from Partnership to Public Company with potential compliance gaps(p.30)
- • Negative operating cash flows in prior periods(p.36)
- • Substantial related party transactions indicating potential conflicts of interest(p.29)
- • Heavy dependence on suppliers(p.101)
- • High working capital requirement(p.74)
- • Insufficient market reach(p.101)
- • High concentration in top customers and geographic markets(p.108)
- • All manufacturing of bulk orders dependent on job work(p.108)
- • Significant dependence on top 10 customers representing 54.49% of revenue(p.187)
- • High debt-to-equity ratio of 2.90 with significant short-term debt burden(p.188)
- • Negative cash flows from operations despite profitability(p.186)
- • Working capital intensity with significant inventory requirements(p.186)
- • Material pending litigation against company involving customer debt recovery(p.190)
- • Growing kids wear market with increasing consumer spending and retail expansion(p.18)
- • Expanding customer base and market penetration through new customer acquisition(p.29)
- • Leveraging promoter group entities' distribution and sales capabilities(p.34)
- • Expansion into new geographical markets(p.101)
- • Growing Indian market opportunities(p.101)
- • Government thrust for textile sector development(p.101)
- • Export market development in Middle East and South East Asia(p.110)
- • Growing Indian textile and apparel industry projected at 10% CAGR(p.95)
- • Government PLI schemes and incentives for textile sector(p.96)
- • Growing kids wear market segment with focus on design variety and fashion trends(p.185)
- • Expansion of international export markets beyond current Middle East footprint(p.181)
- • Increased brand visibility through trade shows and fashion events(p.180)
- • Market opportunity through product line expansion into infant and category segments(p.185)
- • Leverage operational scale to improve margins on bulk and export orders(p.185)
- • Disruption to manufacturing operations from multiple external factors(p.25)
- • Significant power consumption creating vulnerability to supply disruptions and tariff increases(p.26)
- • Manpower intensive business vulnerable to labor disputes and wage inflation(p.26)
- • Rapidly changing consumer preferences in highly competitive fashion market(p.29)
- • No long-term raw material contracts exposing company to price and supply fluctuations(p.31)
- • Lack of long-term customer contracts creating revenue volatility and order dependency(p.31)
- • Foreign exchange volatility affecting export revenues(p.31)
- • Intense competition from organized and unorganized players with price pressure(p.33)
- • Economic impact of COVID-19 pandemic on overall demand(p.33)
- • Dependence on third-party transportation creating operational vulnerabilities(p.33)
- • Regulatory compliance risks and license/approval requirements(p.29)
- • Broader economic slowdown and general macroeconomic uncertainty(p.41)
- • Increased competition from large organized players(p.101)
- • Changes in government policies affecting operations(p.101)
- • Rising labour wages increasing costs(p.101)
- • Low entry barriers enabling new competitor entrants(p.101)
- • Fluctuation in raw material prices(p.101)
- • Global economic uncertainty and slowdown(p.89)
- • Supply chain disruptions and logistics challenges(p.87)
- • High finance costs and interest burden limiting profitability(p.183)
- • Intense competitive conditions in kids clothing and apparel market(p.187)
- • Volatility in raw material costs and input prices(p.180)
- • Dependence on manufacturing and export infrastructure in West Bengal(p.180)
- • Economic cyclicality and potential recession affecting consumer discretionary spending(p.181)
- • Regulatory and compliance risks in textiles, labor, and export regulations(p.181)
Promoters
| Name | Role | Pre-Issue | Post-Issue |
|---|---|---|---|
| Mr. Niranjan Mundhra | Promoter | 33.33% | 24.46% |
| Mr. Shiv Shankar Mundhra | Promoter | 33.33% | 24.46% |
| Mr. Mahesh Kumar Mundhra | Promoter | 33.33% | 24.46% |
| Mr. Niranjan Mundhra | Promoter & Chairman cum Managing Director | 33.33% | 24.46% |
| Mr. Shiv Shankar Mundhra | Promoter & Whole-Time Director | 33.33% | 24.46% |
| Mr. Mahesh Kumar Mundhra | Promoter & Whole-Time Director | 33.33% | 24.46% |
| Mr. Jagdish Prasad Mundhra | Promoter Group | 0.00% | 0.00% |
| Mrs. Saroj Mundhra | Promoter Group | 0.00% | 0.00% |
| Mrs. Poonam Mundhra | Promoter Group | 0.00% | 0.00% |
| Mrs. Priyanka Mundhra | Promoter Group | 0.00% | 0.00% |
| Mrs. Kirti Mundhra | Promoter Group | 0.01% | 0.01% |
| Mr. Niranjan Mundhra | Promoter | 33.33% | — |
| Mr. Shiv Shankar Mundhra | Promoter | 33.33% | — |
| Mr. Mahesh Kumar Mundhra | Promoter | 33.33% | — |
| Niranjan Mundhra | Promoter | — | — |
| Shiv Shankar Mundhra | Promoter | — | — |
| Mahesh Kumar Mundhra | Promoter | — | — |
Leadership
Auto-extracted from the company's RHP using AI, with each fact linked to its source passage (hover any row to see the quote & page). Provided for research only, not investment advice — verify against the official RHP before relying on it.