Swastik Castwell Limited, an aluminum casting manufacturer, listed on the BSE SME platform today. The listing price was ₹67 per share, against an issue price of ₹65. This gave investors a modest gain of 3.08% on the first day itself. Shortly after listing, the share touched a high of ₹68 and closed at the same level on the first trading day. This translates to a total profit of 4.62% for investors at the end of the first day.
Retail Investors Showed Enthusiasm in IPO
Swastik Castwell's ₹14.07 crore Initial Public Offer was open from July 21st to July 23rd. The issue received an overwhelming response from investors. The overall subscription was 5.08 times, while the portion reserved for retail investors was subscribed 7.75 times. The company issued a total of 21.64 lakh new shares with a face value of ₹10 in this IPO. The offer only included a fresh issue, meaning the promoters did not sell any of their stake.
Where Will the Company Spend the Money?
Out of the ₹14.07 crore raised from the IPO, the company has earmarked approximately ₹5 crore for the purchase of plant and machinery. In addition, the same amount will be spent on the construction of sheds and buildings. ₹5 crore will be used for working capital, i.e., day-to-day business expenses. The remaining amount will be used by the company for general corporate purposes.
What Does the Company's Business Do?
Swastik Castwell was established in 1996. The company manufactures high-quality aluminum casting products. Its main business is related to the manufacturing sector. The company prepares casting parts for automobile, electrical, infrastructure, and machinery companies. Its customers are mainly spread across major industrial hubs in the country.
Sharp Increase in Profit, But Revenue Fluctuates
Looking at the company's profit, there has been continuous growth. In FY23, the company's net profit was ₹58 lakh. In the next year, FY24, it increased to ₹65 lakh. But according to the estimated figures for 2025, the company has recorded a tremendous net profit of ₹2.63 crore. However, when it comes to revenue, there has been no stability. In FY23, the company's revenue was ₹24.41 crore, which decreased to ₹23.35 crore in FY24. In FY25, it again increased to ₹30.31 crore.
Debt Burden Still Remains
The company had a total debt of ₹9.64 crore at the end of FY23. It decreased to ₹8.97 crore in FY24, but again increased to ₹9.12 crore in FY25. This means that there is no stability in the level of debt. However, the company plans to use the funds received from the IPO for working capital, which may reduce the debt pressure to some extent in the future.
What Was the Company's Financial Situation Before the IPO?
Before the IPO, the company faced challenges of capital shortage and operating expenses. Although the company has registered good growth in profit in the past years, it needed more capital to expand its business and maintain profitability. With this in mind, the company decided to raise money from the public.
What Does the Market Reaction Say?
Even though the share opened at a slight premium on the listing day, investors showed interest in early trade. The share touched the level of ₹68, going above the listing price, which indicates that there is curiosity about the company in the market. However, whether this trend will continue for a long time or not will depend on the company's upcoming quarterly results and business performance.
Promoters' Stake Remains Intact
The promoters of the company have not sold any of their stake through this IPO, meaning that the command of the company remains with the promoters as before. This also indicates that the company's management itself is confident about the future.
Investors Keep an Eye on Upcoming Announcements
Now the market is watching at what speed and on what priority basis Swastik Castwell spends the money raised from the IPO. Also, investors will keep an eye on what new orders or partnerships the company announces in the coming months.
