Harikanta Overseas IPO

Harikanta Overseas Ltd. (HOL) is a textile manufacturer based in Surat, specializing in sarees and dress materials. While they have expanded from merchant exporting to direct international sales in regions like Thailand and Bahrain, their business model relies heavily on third-party job work to meet production deadlines. The company is launching an IPO to raise Rs. 25.63 crore, priced between Rs. 91 and Rs. 96. My primary concern lies in the company’s "unbelievable" margin expansion—jumping from a thin 1.69% in FY23 to a suspicious 19.50% by late 2025. This erratic growth, combined with contradictory data regarding promoter share costs (Rs. 7.73 vs. Rs. 7.89), paints a messy picture. Given the lead manager’s poor historical track record and the aggressive pricing compared to their weak peer group, this IPO feels like an overpriced bet. Investors should be wary of the sustainability of these sudden, massive profits.