At a Glance
Spunweb Nonwoven Ltd is launching a 100% fresh issue IPO of 63.5 lakh shares on the NSE SME platform. The Rajkot-based company manufactures nonwoven fabrics used in hygiene, medical, packaging, and agriculture. With FY25 profit up 98% YoY and EBITDA margins over 13%, they’re now looking to clean up debt and fund working capital. But the elephant in the room? Price band not yet announced.
1. 🎯 Introduction with Hook
If you’ve ever used a diaper, sanitary napkin, face mask, or shopping bag that felt like “plastic cloth,” chances are it had nonwoven fabric.
Spunweb makes that stuff.
They’re one of the largest spunbond nonwoven fabric manufacturers in India, and they’re coming to the SME IPO party with exports, margins, and a debt problem.
So is this IPO woven with promise, or just more SME fluff?
Let’s unspool the yarn.
2. 🧪 Business Model – WTF Do They Even Do?
Spunweb makes spunbond nonwoven fabric, used in:
- Hygiene (diapers, sanitary pads) – 🔥 2/3rd of revenue
- Medical textiles (PPE, gowns)
- Agriculture (UV-treated mulching sheets)
- Packaging (bags, liners)
- Construction (geo-fabrics)
Product Types:
- Hydrophobic Fabric
- Hydrophilic Fabric
- UV-Treated Fabric
They don’t sell finished goods — only fabric rolls that go into other manufacturers’ machines.
3. 💰 Financials Overview – Profit, Margins, ROE, Growth
📈 This company has been compounding like… actual webbing.
| ₹ Cr | FY23 | FY24 | FY25 |
|---|---|---|---|
| Revenue | 117.7 | 154.2 | 227.1 (+47%) |
| EBITDA | 10.8 | 15.0 | 31.2 |
| PAT | 1.13 | 5.44 | 10.79 (+98%) |
| Net Worth | 20.2 | 25.1 | 43.1 |
| Total Debt | 49.5 | 48.3 | 91.2 👀 |
Highlights:
- PAT margin = 4.75%
- EBITDA margin = 13.75%
- ROE = 31.6%, ROCE = 33.6%
Looks good. But that debt pile doubled in FY25, right before listing. 🧨
4. 📊 Valuation – Is It Cheap, Meh, or Crack?
Price band = ❌ Not announced yet
But assuming a ballpark IPO valuation of ₹150 Cr – ₹200 Cr, based on ~₹11 Cr PAT:
- P/E = ~13–18x
- SME textile/processing stocks typically trade at 10–15x
So, if they list at the higher end, it might be… threadbare.
If they keep it modest (<₹150 Cr), it’s a tightly woven bargain.
🎯 EduInvesting FV Range:
₹130 Cr – ₹160 Cr market cap
Fair Value per share = TBD post band, but likely in ₹60–₹75 range
5. 🔥 What’s Cooking – News, Triggers, Drama
- ₹29 Cr for working capital 🧵
- ₹10 Cr to be invested in subsidiary SIPL
- ₹8 Cr for debt repayment
- Remainder: chai, chaiwala, and “General Corporate”™
Also:
- Exporting to USA, UAE, Italy, Kenya, Egypt
- Clients include Millennium Babycares, RGI Meditech, Kwalitex, Sekhani Industries
6. 💣 Balance Sheet – How Much Debt, How Many Dreams?
| Metric | FY25 |
|---|---|
| Total Assets | ₹182.8 Cr |
| Net Worth | ₹43.1 Cr |
| Total Debt | ₹91.2 Cr |
| D/E Ratio | 2.11x 🧨 |
This is not small.
The company is profitable, yes, but it’s carrying more yarn than it can spool.
Post-IPO, debt will come down (a little), but still worth watching.
7. 💵 Cash Flow – Sab Number Game Hai
- Likely positive operating cash flow (thanks to scale + EBITDA margins)
- But working capital hog: receivables, raw polypropylene inventory, energy bills
- IPO funds will partially ease strain, but not eliminate it
It’s like stitching together threads — slow and steady.
8. 📐 Ratios – Sexy or Stressy?
| KPI | Value |
|---|---|
| ROE | 31.63% |
| ROCE | 33.66% |
| PAT Margin | 4.75% |
| EBITDA Margin | 13.75% |
| D/E | 2.11x |
💡 Classic SME setup: great ops, messy leverage.
9. 💵 P&L Breakdown – Show Me the Money
Main Revenue Drivers:
- Bulk supply of nonwoven rolls
- Custom specs for hygiene + packaging clients
- No retail or branding
Key Costs:
- Polypropylene (raw material)
- Energy + utilities
- Freight (for exports)
- Maintenance + equipment depreciation
Spunweb doesn’t do high-ticket sales. It makes money on volume and efficiency.
10. 🤼 Peer Comparison – Who Else in the Game?
| Company | Revenue | PAT | ROE | P/E |
|---|---|---|---|---|
| Spunweb | ₹227 Cr | ₹10.8 Cr | 31.6% | TBD |
| Jindal Poly Films | ₹4,200 Cr | ₹270 Cr | 15% | ~13x |
| Cosmo First | ₹3,000 Cr | ₹170 Cr | 18% | ~11x |
| SME Peer (Texol, Nova AgriTech) | ₹90–200 Cr | ₹4–8 Cr | ~22–25% | ~12x |
Spunweb holds up well — if priced right. They aren’t D2C like Sudarshan Pharma or branded players like Siyaram.
11. 🧩 Miscellaneous – Shareholding, Promoters
Promoters:
- Jay Dilipbhai Kagathara
- Kishan Dilipbhai Kagathara
- Pre-IPO holding: 88.5%
- Post-IPO: Likely ~65–70%
- Clean structure. No PE. No NBFC or shady LLPs.
Also, backed by Vivro, which has handled quality SME listings in the past.
12. 🧑⚖️ EduInvesting Verdict™
Spunweb looks like a stitched-up SME done right.
✅ Good margins, good growth
✅ Hygiene-sector exposure
✅ Strong export base
✅ Anchor clients & clean ops
❌ High debt
❌ IPO valuation still unknown
❌ Low PAT margin = slower compounding
So what’s the call?
If it lists at a fair P/E (≤14x), it’s a solid infra fabric play.
If priced too high, you’re better off buying the bag it makes.
Tags: Spunweb IPO, Nonwoven fabric IPO, textile SME IPO, hygiene sector stocks, Gujarat manufacturing, BSE SME IPO July 2025
✍️ Written by Prashant | 📅 July 7, 2025
