The Nikita Papers Limited IPO, opening for subscription from 27th to 29th May 2025, has garnered attention for being one of the larger NSE SME listings this year. Priced between ₹95 to ₹104 per share, the IPO is a bookbuilding issue worth ₹67.54 crore, consisting solely of a fresh issue of 64.94 lakh equity shares. Yet, what stands out is the zero Grey Market Premium (GMP), indicating muted interest or cautious sentiment among grey market participants.
Let’s dive into the IPO details, GMP trend, technical and financial analysis, listing expectations, and expert reviews to help investors make informed decisions.
IPO Snapshot: Key Highlights
| Particulars | Details |
|---|---|
| IPO Open Date | 27th May 2025 |
| IPO Close Date | 29th May 2025 |
| Price Band | ₹95 – ₹104 per share |
| Lot Size | 1,200 shares |
| Minimum Investment | ₹1,24,800 |
| Face Value | ₹10 per share |
| Issue Size | ₹67.54 crore |
| IPO Type | Bookbuilding |
| Listing Exchange | NSE & NSE SME |
| Listing Date (Tentative) | 3rd June 2025 |
| Registrar | Skyline Financial Services Pvt. Ltd. |
GMP Trends: Zero Premium Signals Caution
As of 27th May 2025, the Grey Market Premium (GMP) for Nikita Papers IPO is ₹0. This has been consistent for several days:
| Date | IPO Price | GMP | Estimated Listing Price | Estimated Listing Gain |
|---|---|---|---|---|
| 27-May-25 | ₹104 | ₹0 | ₹104 | 0.00% |
| 26-May-25 | ₹104 | ₹0 | ₹104 | 0.00% |
| 25-May-25 | ₹104 | ₹0 | ₹104 | 0.00% |
| 24-May-25 | ₹104 | ₹0 | ₹104 | 0.00% |
A zero GMP suggests that the IPO might list at or near its upper price band without offering significant listing gains. However, GMPs are speculative and can change quickly.
Company Overview: About Nikita Papers Ltd.
Nikita Papers Limited is a paper product manufacturing company involved in producing writing, printing, and specialty paper. It caters to both domestic and export markets, focusing on sustainable and cost-efficient manufacturing processes.
Business Segments:
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Printing & Writing Paper
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Kraft Paper
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Newsprint
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Industrial Packaging Paper
The company’s strategy includes vertical integration, power self-reliance, and market diversification, targeting industries such as packaging, publishing, and FMCG.
IPO Objectives: Where Will the Money Go?
The proceeds from the IPO will be allocated for:
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Setting up a captive power plant to ensure energy self-sufficiency
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Repayment of existing borrowings
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Meeting general corporate expenses
This focus on reducing debt and increasing operational efficiency is viewed positively by analysts, although execution risks remain.
Financial Performance: A Mixed Bag
Revenue and Profit Trends:
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FY23 Revenue: ₹401.31 crore
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FY24 Revenue: ₹346.78 crore (down 13.58%)
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FY23 PAT: ₹8.65 crore
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FY24 PAT: ₹16.60 crore (up 91.90%)
Despite the decline in revenue, profitability has improved significantly, likely due to better cost control and improved margins.
Key Ratios:
| Indicator | Pre-IPO | Post-IPO |
|---|---|---|
| PE Ratio | 11.39 | 12.27 |
| EPS | ₹9.13 | ₹8.48 |
| ROE | 21.45% | – |
| ROCE | 28.71% | – |
| PAT Margin | 4.79% | – |
| Market Cap | ₹256.55 crore | – |
The low PE ratio and strong ROCE suggest undervalued fundamentals, but revenue contraction raises red flags.
IPO Strengths
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Improved Profit Margins: Net profit has nearly doubled despite revenue decline.
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Sustainable Focus: Setting up an in-house power plant reflects long-term cost efficiency.
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Reasonable Valuation: PE of ~11.39 is attractive compared to industry peers.
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Strong Return Metrics: ROE and ROCE above 20% indicates sound capital efficiency.
IPO Weaknesses and Risks
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Declining Topline: Revenue dropped ~13.5% YoY—points to demand or capacity issues.
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Zero GMP: No premium in grey market may signal tepid investor interest.
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High Entry Barrier for Retail Investors: At ₹1.24 lakh per lot, the IPO may exclude smaller investors.
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Sectoral Pressure: Paper industry faces cyclical demand, input cost volatility, and environmental scrutiny.
Expert Opinions and IPO Ratings
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Neutral to Cautious Outlook: Most analysts suggest waiting and watching market response before applying.
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Medium to Long-Term Potential: Improving profitability and strategic capex may benefit long-term investors.
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Avoid for Listing Gains: Zero GMP and mixed sentiment suggest low likelihood of immediate profits.
Listing Outlook: What to Expect on 3rd June
With the current GMP at ₹0, Nikita Papers is expected to list at ₹104, offering no premium on listing day. That said, the market environment, sector performance, and post-subscription response can still influence listing behavior.
Factors to Watch:
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Subscription Data: Strong QIB or HNI interest may shift market perception.
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Sectoral Trends: If peers rally, positive spillover may benefit Nikita Papers.
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Market Sentiment: Nifty’s direction and FII flows can impact listing response.
Registrar Information
The IPO is managed by:
Skyline Financial Services Pvt. Ltd.
📧 Email: info@skylinerta.com
📞 Phone: 022-28511022
They will handle allotment, refund, and investor grievance redressal.
Should You Apply to Nikita Papers IPO?
✅ Apply If:
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You’re a long-term investor looking for value in small caps
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You believe in the company’s margin improvement strategy
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You’re comfortable with moderate risk and low liquidity in SME stocks
❌ Avoid If:
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You’re seeking quick listing gains
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You have low capital or prefer diversified large-cap exposure
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You’re concerned about revenue contraction or zero GMP
Final Verdict
The Nikita Papers IPO comes with sound fundamentals, reasonable valuations, and improved profitability, making it an average to moderately attractive offer for medium- to long-term investors. However, the lack of enthusiasm in the grey market, combined with declining revenue and high investment entry point, makes it less suitable for short-term or risk-averse investors.
As always, consider your risk appetite, investment horizon, and liquidity needs before applying.
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