Alpine Texaworld IPO fully subscribed on final day of bidding
The Alpine Texaworld IPO closed fully subscribed, but analysts warn that elevated valuations and sector headwinds limit the near-term upside for investors.
Alpine Texaworld’s ₹126 crore initial public offering closed fully subscribed on July 16, drawing bids for 13.22 million shares against the 12.02 million shares on offer. The mainboard issue, which consisted entirely of a fresh issue of 1.20 crore equity shares with no offer for sale, saw demand accelerate sharply on its final day.
By 12:25 PM, the issue was subscribed 1.10 times. This late surge was driven by qualified institutional buyers and retail individual investors, both of which fully subscribed to their allotted portions. Non-institutional investors covered 80% of their reserved quota. The issue allocation reserved 70% for retail investors, 29% for non-institutional investors, and 1% for qualified institutional buyers, requiring a minimum investment of ₹14,910 at the upper price band.
Despite the healthy final subscription, the grey market premium narrowed to just ₹3 per share. This unofficial indicator suggests an estimated listing price of around ₹108, representing a marginal 2.86% premium over the IPO's stated upper price band of ₹115. The tepid grey market reaction reflects scepticism among certain market participants regarding the issue's pricing.
Swastika Investmart has assigned a "Neutral" rating to the IPO, warning that the valuation appears expensive for a commoditised business. The brokerage noted the stock is priced at nearly 18.49 times its fiscal 2026 earnings. This elevated multiple comes despite the company operating in the highly competitive textile industry, where sustaining profitability is notoriously difficult.
The company's financial performance in FY26 provided the primary bullish argument for the offering. Profit after tax margins improved sharply to 6.34% from 3.63% in FY25. Swastika Investmart attributed this expansion to the successful integration of operations and strategic investments in solar power. These factors helped the manufacturer achieve a return on equity of 33.85% and a return on capital employed of 17.56%.
However, the brokerage cautioned that intense competition poses a significant risk to maintaining these margin levels. Additionally, Alpine Texaworld carries a relatively high debt-to-equity ratio of 2.35 times. The IPO structure directly addresses this leverage, with a significant portion of the proceeds earmarked for the prepayment or repayment of certain borrowings to strengthen the balance sheet.
The remaining capital will be used to establish a new weaving unit at a proposed manufacturing facility in Ahmedabad, Gujarat. This expansion is aimed at increasing the company's grey fabric production capacity, with any residual funds allocated to general corporate purposes.
D&A Financial Services managed the book-running for the issue, with KFin Technologies serving as the registrar. The basis of allotment will be finalised on July 17. Successful applicants will receive shares in their demat accounts on July 20, the same day refunds are processed for unsuccessful bidders. Trading is tentatively scheduled to begin on the BSE and NSE on July 21.
