1. At a Glance
A Gujarat-based nonwoven fabric maker is going public with a ₹60.98 Cr all-fresh IPO, targeting hygiene, medical, and agri-industries with high-margin, UV-treated spunbonded fabrics. FY25 saw a 47% jump in revenue and a near 2x jump in profits. Listing soon on NSE SME.
2. Introduction with Hook
Imagine a fabric so niche, even your doormat gets jealous. Spunweb Nonwoven weaves profits from polymers — and now it wants your capital to stitch up the next phase of expansion.
- FY25 Profit up 98%, Revenue up 47%
- P/E (Post IPO) of 21.44x, but Debt/Equity still a spicy 2.11x
- Price band: ₹90–₹96 with min retail cheque at ₹2.3L (not for budget buyers)
3. Business Model (WTF Do They Even Do?)
Spunweb is a manufacturer of spunbond nonwoven fabrics used in:
- Hygiene: Diapers, sanitary napkins, wipes
- Medical: PPE, hospital gowns
- Agriculture: Crop covers, UV-protection layers
- Packaging & Doormats: Because even your carpet needs tech
They don’t just make fabric — they engineer it. That’s how you charge premiums for plastic sheets.
4. Financials Overview
| Metric | FY25 | FY24 | FY23 |
|---|---|---|---|
| Revenue (₹ Cr) | 227.14 | 154.24 | 117.68 |
| EBITDA (₹ Cr) | 31.23 | 15.01 | 10.80 |
| PAT (₹ Cr) | 10.79 | 5.44 | 1.13 |
| Net Worth (₹ Cr) | 43.15 | 25.09 | 20.15 |
| Total Borrowing (₹ Cr) | 91.16 | 48.33 | 49.50 |
Highlights:
- PAT up 9x in two years
- EBITDA margin expanding nicely
- Borrowing doubled to ₹91 Cr — expansion is thirsty.
5. Valuation
| Metric | Value |
|---|---|
| Price Band | ₹90–₹96 |
| Market Cap | ₹231.39 Cr |
| EPS (Post IPO) | ₹4.48 |
| P/E (Post IPO) | 21.44x |
| P/B | 3.95x |
| ROE | 31.63% |
Fair Value Estimate:
Based on FY25 EPS of ₹4.48, and peer range of 15–20x:
EduInvesting FV Range = ₹78–₹90
IPO is not cheap — it’s priced for perfection (or UV-treated optimism).
6. What’s Cooking – News, Triggers, Drama
- ₹290M to fund working capital
- ₹100M to support its wholly-owned subsidiary SIPL
- ₹80M for partial debt repayment
- Exports expanding: US, UAE, Italy, Egypt, etc.
- Capacity optimization post FY24 seems to have clicked — major operating leverage in play.
Not much gossip. Just Gujarat textile energy + global fabric aspirations.
7. Balance Sheet
| Particulars | FY25 | FY24 | FY23 |
|---|---|---|---|
| Total Assets | 182.76 | 106.58 | 93.15 |
| Net Worth | 43.15 | 25.09 | 20.15 |
| Total Borrowings | 91.16 | 48.33 | 49.50 |
| Reserves & Surplus | 27.30 | 15.77 | 10.33 |
Key Callouts:
- Borrowings ballooned for expansion
- Net worth more than doubled
- Balance sheet’s now carrying some muscle — but also carbs (debt)
8. Cash Flow – Sab Number Game Hai
While full cash flow table isn’t public in IPO notes, expect:
- Positive Operating Cash Flow: Profitable ops + efficient working capital
- Negative Investing Cash Flow: Expansion, R&D
- Positive Financing Flow: IPO + borrowings = growth steroid
Cash flow conversion should improve once capex cycle plateaus.
9. Ratios – Sexy or Stressy?
| Ratio | FY25 Value |
|---|---|
| ROE | 31.63% |
| ROCE | 33.66% |
| RoNW | 31.63% |
| D/E | 2.11x |
| PAT Margin | 4.75% |
| EBITDA Margin | 13.75% |
Analysis:
- ROE + ROCE > 30% = Efficiency goals unlocked
- Debt heavy, but currently justified via returns
- Margins show value-add is working
10. P&L Breakdown – Show Me the Money
| Metric | FY25 | FY24 | FY23 |
|---|---|---|---|
| Revenue | 227.14 | 154.24 | 117.68 |
| EBITDA | 31.23 | 15.01 | 10.80 |
| Depreciation + Int. | Moderate | Moderate | Low |
| PAT | 10.79 | 5.44 | 1.13 |
Quick Math:
- Margins expanding = Happy investors
- Profit doubling = IPO magnetism
- Still early stage — volatility is baked in.
11. Peer Comparison
| Company | Revenue (Cr) | PAT (Cr) | ROCE | P/E |
|---|---|---|---|---|
| Spunweb (IPO) | 227.14 | 10.79 | 33.66% | 21.4 |
| RSWM Ltd | 3,567 | 118 | 12.2% | 13.8 |
| Welspun India | 9,527 | 356 | 14.5% | 20.1 |
| SGL (SME peer)* | 216 | 6.4 | 28% | 22.5 |
*Assumed similar SME competitor.
Verdict:
Spunweb isn’t cheap — but it’s got peer-beating return ratios and sector tailwinds.
12. Miscellaneous – Shareholding, Promoters
| Particulars | Value |
|---|---|
| Promoter Holding (Pre) | 88.50% |
| Promoter Holding (Post) | To be updated |
| Promoters | Jay & Kishan Kagathara |
| Employees | 199 |
| Market Maker | Rikhav Securities |
| Lead Manager | Vivro Financial |
Also exports to 10+ countries, including US, UAE, Italy — global hygiene fabric hustle.
13. EduInvesting Verdict™
Spunweb is a rare SME IPO with actual numbers that make you sit up and say “Hmm, not bad.” They’re riding demand from hygiene, healthcare, and agri — all high-need sectors.
Financials are clean, margins are improving, exports are growing. Debt is a concern, but manageable (especially if IPO funds are put to work wisely).
Smart Investor Takeaway:
If you can handle SME volatility and the high-ticket entry cost (₹2.3L min), this might just be one of those “wish I bought at IPO” stories.
Unless the market weaves a different narrative.
Metadata
Written by EduInvesting | July 13, 2025
Tags: IPO, Spunweb, SME IPO, Technical Textiles, Gujarat Manufacturers, Nonwoven Fabric, Hygiene Sector, Export Stocks
