Multibagger IPO: The initial public offerings (IPO) of Iris Clothings Ltd was launched in October 2018 and the fixed price issue was proposed for listing on NSE SME exchange. the public offer was offered at ₹90 apiece and one lot of the NSE SME IPO comprised 1,600 company shares. The SME stock had a muted debut on NSE SNE exchange as the stock listed at ₹92 per share levels, delivering ₹2 per share listing gain to its allottees. However, those investors who remained invested in the stock backing their conviction, they went on to get whopping return from the small-cap stock. The SME stock is current trading around ₹450 apiece levels, which is 400 per cent higher from its issue price.
But, this is not the return that a lucky allottee would have earned, if he or she had remained invested in this small-cap SME stock. After tepid listing on NSE SME exchange, the small-cap stock declared one bonus share. The SME company declared issuance of bonus shares in 5:2 ratio. The bonus share traded ex-bonus on 15th October 2020 for issuance of five bonus shares for every two company shares an eligible shareholder held on the record date.
5:2 bonus share impact
If an allottee of Iris Clothings IPO had remained invested in this SME stock after listing, its shareholding would have surged to 3.5 times [(5 + 2) / 2]. As lot size of the IPO was 1,600, an allottee who remained invested in the scrip till bonus share record date, its shareholding in the sock would have surged to 5,600 (1,600 x 3.5).
₹1.44 lakh turns to ₹25.20 lakh
As the IPO was offered at ₹90 apiece and one lot of the SME IPO comprised 1,600 shares. Minimum investment of an allottee would have been ₹1.44 lakh ( ₹90 x 1600). As Iris Clothings share price today is around ₹450 apiece, absolute value of allottees’ ₹1.44 lakh would have turned to ₹25.20 lakh today ( ₹450 x 5600).
1:5 stock split
The SME stock has declared stock split in June 2023 as well. The small-cap stock informed Indian stock market exchanges that its board of directors have approved stock split in 1:5 ratio, means one stock with a face value of ₹10 will be subdivided into five shares with a face value of ₹2 per equity share. The company is yet to announce record date for stock split and finalise the list of beneficiary shareholders for 1:5 stock split benefit.
Iris Clothings Q1 results
The readymade garment company’s EBITDA margin witnessed a significant improvement and stood at 26 per cent, up 8.03 per cent YoY due to reduction in stock pile-up and low raw material prices. It’s PAT margin stood at around 13 per cent, logging 5.24 per cent YoY rise against the PAT margins of 8 per cent in Q1FY23.
Speaking on Q1 results 2023, company management said, “Our revenues during the quarter witnessed a marginal increase, however, we ended up with the highest EBITDA and PAT margins reported in the last two years. This came at the back of pick-up in demand, contribution from new product categories and ease in raw material prices. Going forward, we expect our revenues to grow significantly driven by increase in sale volumes.”
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Updated: 25 Jul 2023, 02:27 PM IST