Silky Overseas IPO subscribed 33% so far on Day 2; check GMP, issue details, more

The initial public offering (IPO) of Silky Overseas Limited, a textile-focused garment export company, continued to draw tepid investor response on Day 2, having received 33% subscription so far. The SME IPO, which opened for subscription on June 28, is scheduled to close on July 2, 2025.

Despite the overall muted participation till now, analysts believe there is still potential for last-day momentum, especially if retail and HNI categories pick up pace. The IPO is being closely watched in the textile and SME space, given the company's export-centric business model and steady revenue trajectory.

IPO Subscription Status

According to data available on the NSE SME platform, Silky Overseas IPO has been subscribed 33% by the end of Day 2:

• Retail Individual Investors (RIIs): Subscribed 42%

• Non-Institutional Investors (NIIs): Subscribed 27%

• Qualified Institutional Buyers (QIBs): Yet to show significant participation

The issue comprises a fresh equity offer of 12.5 lakh shares, aggregating to ₹18.75 crore, at a fixed price of ₹150 per share. The lot size is 1,000 shares, translating to a minimum investment of ₹1.5 lakh per retail investor.

Company Overview

Incorporated in 2011, Silky Overseas Limited is a Surat-based apparel export house primarily engaged in manufacturing and exporting ready-made garments. The firm specializes in women's ethnic and western wear, and its major export markets include the UAE, Saudi Arabia, and the UK.

The company operates with a strong B2B model, working with leading brands and wholesalers in its target markets. As of FY24, Silky Overseas reported revenues of ₹58 crore, with a net profit of ₹4.6 crore, reflecting a profit margin of nearly 8%.

Grey Market Premium (GMP) Trends

As of July 1, the Grey Market Premium (GMP) for Silky Overseas IPO is reported to be around ₹10–12 per share, indicating a modest 6-8% listing gain over the issue price. While not exuberant, the GMP suggests some investor confidence in the stock’s post-listing performance.

However, market participants caution against relying solely on GMP. “Grey market activity is not a guaranteed indicator of listing success,” said Rajiv Mehta, Senior Analyst at JM Financial. “Fundamentals, valuation, and post-listing sentiments matter much more in today’s market.”

Use of IPO Proceeds

The company intends to use the net proceeds for the following purposes:

1. Working capital requirements

2. Modernization of existing manufacturing units

3. General corporate purposes

The planned capex aims to boost production capacity and enhance supply-chain capabilities to better serve export markets.

Analyst Take: Valuation & Fundamentals

The IPO is priced at a Price-to-Earnings (P/E) ratio of 9.7x, based on FY24 earnings. This places Silky Overseas slightly below the average industry P/E of 11x, which some analysts view as reasonable.

“Silky Overseas is a niche player with a clear export focus,” said Pooja Rawat, Equity Research Head at Centrum Broking. “While the SME IPO space has been volatile recently, the company’s balance sheet is relatively clean, and the valuation appears fair.”

However, she added that the company faces key risks such as export dependency, currency fluctuations, and the cyclical nature of the textile industry.

Market Context

The IPO hits the market amid mixed sentiment in the broader SME IPO landscape. After a flurry of oversubscribed issues in Q1 and early Q2 of 2025, recent IPOs have seen more measured interest, likely due to:

• Elevated valuations in SME space

• Rising scrutiny by SEBI over speculative trading

• Profit booking and liquidity concerns

The NSE SME index has risen nearly 18% year-to-date, though many recently listed stocks have shown post-listing volatility, prompting cautious behavior among HNIs and retail investors.

Investor Outlook

With just one day left for subscription, Silky Overseas IPO still has a long way to go before achieving full subscription. Analysts believe retail participation may rise on the final day, but institutional response will be crucial.

For risk-averse investors, analysts recommend careful consideration. “This is a play on India’s textile export narrative,” noted Mehta. “But investors must weigh the global demand cycle and FX risk before committing.”

Still, for those with higher risk appetite and a longer-term horizon, the IPO could offer value given the company’s export-oriented growth strategy and low debt profile.

Final Thoughts

While Silky Overseas brings forward a fundamentally decent business with a niche export focus, the current subscription numbers reflect investor caution. Much will depend on Day 3 participation and listing day sentiment.

Investors are advised to track the final day demand dynamics and not get swayed solely by GMP. With macro uncertainty and SME market volatility still in play, a balanced approach is warranted.