1. At a Glance – Yarn, Valuation & Early Investor Silence
₹110.24 crore fresh issue. Price band ₹95–₹104. Post-issue P/E at 29.69x. Market cap ₹415.74 crore. And on Day 1? A humble 0.03x subscription. Retail at 0.29x, QIB at 0.00x. Yes, zero.
Shree Ram Twistex is coming to the market spinning cotton yarns — Compact Ring Spun, Carded, Combed, Lycra-blended, Slub — basically if it can be twisted into fabric, they probably make it. The company has shown steady growth in revenue and PAT over the years, margins improved in FY24 and FY25, and it wants to use IPO money to set up solar and wind power plants, reduce debt, and fund working capital.
But here’s the masala: textile is a brutally competitive, fragmented industry. The company is priced at nearly 30x earnings. And institutional investors haven’t exactly rushed to grab it on Day 1.
So is this a disciplined spinning play with energy cost optimization plans? Or a richly priced yarn manufacturer in a cyclical industry?
Let’s untangle the threads.
2. Introduction – From Gondal to Dalal Street
Shree Ram Twistex Ltd. is not some AI startup claiming to disrupt the metaverse with blockchain-powered denim. It is a good old cotton yarn manufacturer based in Gondal, Rajkot, Gujarat.
Seventeen compact ring-spinning machines. 27,744 spindles. Five warehouses with 9,855 MT storage capacity. This is hardcore textile manufacturing — noisy floors, cotton dust, power consumption, and razor-thin margins.
It operates in a B2B model — supplying to textile manufacturers, garment exporters, fabric processors and bulk buyers across Gujarat, Rajasthan, Maharashtra, Tamil Nadu, West Bengal, and even exports internationally.
Now here’s where it gets interesting.
Instead of using IPO proceeds to build a new massive plant, the company is planning renewable energy projects — 6.1 MW solar and 4.2 MW wind — plus working capital and debt repayment. That tells you one thing: power cost is a major expense in spinning. And reducing it can directly boost margins.
But here’s the other side.
Textile yarn is a commodity product. Pricing power? Limited. Entry barriers? Moderate. Competition? Intense and fragmented.
And yet, the IPO is priced at nearly 30x earnings post issue.
Are we paying premium for future efficiency gains? Or simply for a spinning machine with better lighting?
Let’s go deeper.
3. Business Model – WTF Do They Even Do?
Imagine cotton arriving in bulk. It gets cleaned, combed, carded, twisted, and converted into yarn of different counts and blends. That’s Shree Ram Twistex.
They manufacture:
- Compact Ring Spun Yarn
- Carded & Combed
