K K Silk Mills Limited Makes Subdued Debut with 15.79% Decline, Lists at ₹32.00 Against Moderate Subscription

K K Silk Mills Limited, a manufacturer of fabrics and garments including kids wear, men's wear, and women's wear producing suiting and shirting fabrics, corporate wear, formal and casual wear, shervani material, ladies dress material, burkha material, and kushan cover material, made a subdued debut on BSE SME on December 3, 2025. After closing its IPO bidding between November 26-28, 2025, the company commenced trading with a decline of 15.79% opening at ₹32.00 and touched ₹32.00 (down 15.79%).

K K Silk Mills Limited Listing Details

K K Silk Mills launched its IPO at ₹38 per share with minimum investment of 6,000 shares costing ₹2,28,000. The IPO received moderate response with subscription of 5.66 times - individual investors at 9.72 times, QIB at 5.71 times, NII at 1.60 times.

First-Day Trading Performance

Listing Price: K K Silk Mills opened at ₹32.00 representing decline of 15.79% from issue price of ₹38.00, touched high of ₹32.00 (down 15.79%) and low of ₹30.40 (down 20.00%), with VWAP at ₹31.48, reflecting weak market reception despite moderate subscription.

Growth Drivers and Challenges

Growth Drivers:

Strong Growth Trajectory: Revenue increased 16% and PAT surged 107% between FY24 and FY25, ROE of 11.79%, ROCE of 12.44%, demonstrating operational leverage and improving profitability in fabric and garment manufacturing business.

Diversified Product Portfolio: Wide range of fabrics and garments including men's shirts, formal and casual wear, shervani material, ladies dress material, burkha material, suiting and shirting fabrics, corporate wear, and ready-made garments catering to different market segments.

Manufacturing Capabilities: State-of-the-art manufacturing facility in Umbergaon with installed capacity of 20 million meters for fabric and garment production, diversified customer base with long-standing relationships.

Challenges:

Weak Profitability: Low PAT margin of 2.11% and EBITDA margin of 6.34% indicating limited pricing power and profitability cushion in highly competitive textile manufacturing segment, high debt-to-equity of 1.49 creating financial leverage concerns.

Poor Market Reception: Severe listing decline of 15.79%, weak bNII subscription of 0.75 times indicating limited institutional interest, aggressive pricing concerns, significant promoter dilution from 99.80% to 66.44%, operating in fragmented and competitive textile manufacturing industry.

Utilisation of IPO Proceeds

Debt Repayment: ₹17.86 crore for full or part repayment and prepayment of certain outstanding secured borrowings, strengthening balance sheet and reducing debt-to-equity ratio to improve financial flexibility and reduce interest burden.

Capital Expenditure: ₹3.15 crore for funding capital expenditure towards replacement of plant and machineries including installation, mechanical and electrical work, enhancing operational efficiency and production capabilities.

General Corporate Purposes: ₹4.09 crore allocated for general corporate purposes supporting working capital requirements, operational needs, and strategic initiatives to maintain competitive positioning in fabric and garment manufacturing market.

Financial Performance

Revenue: ₹221.43 crore for FY25, growth of 16% from ₹191.37 crore in FY24, reflecting expanding customer base across various fabric and garment segments and growing market penetration in suiting, shirting, and ready-made garments categories.

Net Profit: ₹4.68 crore in FY25, exceptional growth of 107% from ₹2.26 crore in FY24, demonstrating operational leverage though sudden surge from ₹1.06 crore in FY23 raising questions about sustainability and earnings quality.

Financial Metrics: ROE of 11.79%, ROCE of 12.44%, debt-to-equity of 1.49, RoNW of 11.79%, PAT margin of 2.11%, EBITDA margin of 6.34%, price-to-book of 1.43x, post-issue EPS of ₹2.70, P/E of 14.08x, net worth of ₹39.72 crore, total borrowings of ₹59.31 crore, and market capitalisation of ₹68.22 crore.