Rachit Prints' Dismal Market Debut: Shares Plunge 20% on BSE SME Platform

The much-anticipated stock market debut of Rachit Prints Limited on the BSE SME platform proved to be a significant disappointment for investors, as the company's shares opened at a steep 20 percent discount to its initial public offering (IPO) issue price. Listing at Rs 60 per share against an issue price of Rs 75, the debut underscored a cautious, if not outright pessimistic, investor sentiment.

From the moment the bells chimed on its listing day, Rachit Prints faced an uphill battle.

The shares commenced trading at Rs 60, immediately shedding value from the IPO price. While they briefly touched an intra-day high of Rs 63, the momentum quickly faded, pushing the stock to a low of Rs 57. By late morning, the shares were struggling to maintain stability, trading around Rs 57.40, marking a substantial decline of 23.47 percent from the initial offering price and a stark contrast to a strong debut many companies hope for.

The journey to the public market for Rachit Prints had its own set of indicators.

The company's IPO, which ran from May 24 to May 28, aimed to raise Rs 14.04 crore by offering 18.72 lakh shares. However, the subscription figures weren't overwhelmingly robust. The issue was subscribed 1.34 times overall, with the retail portion attracting bids 1.63 times its allotted size and the Non-Institutional Investor (NII) segment seeing a subscription of 1.05 times.

These figures, while indicating full subscription, hinted at a lack of frenzied demand often seen in successful IPOs.

Rachit Prints Limited, established in 2017, operates in the manufacturing sector, specializing in a diverse range of printed and unprinted bags. Their product portfolio includes flexible packaging, pouches, and various other packaging materials, catering to a wide array of industries such as Fast-Moving Consumer Goods (FMCG), food, pharmaceuticals, and more.

The company had earmarked the IPO proceeds primarily for funding its working capital requirements and general corporate purposes, crucial for its operational expansion and sustained growth.

Financially, Rachit Prints reported a revenue from operations of Rs 69.45 crore and a profit after tax (PAT) of Rs 2.18 crore for the period ending December 2023.

While these figures provide a snapshot of its performance, the market's reaction suggests that investors either found the valuation steep or perceived inherent risks not reflected in the IPO pricing.

The weak listing serves as a critical reminder of the market's discerning nature, especially within the competitive SME segment.

For Rachit Prints, the focus now shifts to delivering consistent performance and rebuilding investor confidence following a challenging start to its public life. The company, alongside its lead manager Expert Global Consultants Private Limited and registrar Skyline Financial Services Private Limited, will undoubtedly be evaluating the strategies moving forward to stabilize its market position.