As an investor, it can be very challenging to decide whether the Shree Ram Twistex IPO is a good or bad investment. Not anymore, as in this blog, we will provide you with all the necessary details related to the Shree Ram Twistex IPO to help you decide whether you should Apply or Not. Read on to know the IPO risks, strengths, valuation, financial details, and expert opinion to make your investment decision better.Ā
Strengths:
- The firm has a complete spinning facility with modern machines, helping produce a wide range of high-quality products.Ā
- The firm has shown a track record of healthy and consistent growth.
- Shree Ram Twistex is supported by strong promoters and an experienced management team.
- In the last 6 months, it reported a revenue of ā¹132 Crore from operations, and generated a profit of ā¹7 Crore.Ā
- This issue is a completely fresh issue of ā¹110.24 crore, meaning the funds will be completely utilized to set up solar power plants, debt repayment, and working capital requirements.Ā
Weaknesses:Ā
- The firm has faced negative cash flow in the past, and may experience it in the future too.
- The business has remaining contingent liabilities, and if they are paid in the future, it can affect the business’s cash flow and financial performance.Ā
- In FY25, 86% of revenue comes from the top 10 customers; losing any of these customers can adversely affect the business.
- Shree Ram Twistex manufacturing facility and head office are located in Gujarat, and 85% of revenue comes from this region, which exposes them to geographic concentration risks.
Shree Ram Twistex IPO ReviewĀ
| Reviewer | Recommendation |
| IPO Watch | Avoid |
| Capital Market | Avoid |
| Swastika Investmart | Avoid |
Promoters & Track Records, if anyĀ
- Bhaveshbhai Bhikhubhai Ramani, aged 47 years, is the Chairman and Managing Director of our Company. He holds 60,82,675 of Equity shares, representing 20.71% of paid-up capital.
- Jay Atulbhai Tilala, aged 30 years, is the Executive Director and Chief Financial Officer of our Company. He holds 11,96,613 equity shares, representing 4.07% of paid-up capital.
- Nidhi Bhaveshbhai Kothari, aged 43 years, is a Promoter of our Company. She holds 32,31,250 equity shares, representing 11.00% of paid-up capital.
Peer Comparison with the Company
| Name of the Company | Face Value(ā¹) | EPS (ā¹) | RONW (%) | P/E Ratio | NAV(ā¹) |
| Shree Ram Twistex | 10 | 2.72 | 10.80% | – | 23.97 |
| Ambika Cotton Mills Limited | 10 | 114.83 | 7.46% | 11.37 | 1,539.69 |
| Damodar Industries Limited | 5 | 14.09 | (0.05)% | 14.09 | 56.62 |
| Rajapalayam Mills Limited | 10 | (54.45 ) | (12.00)% | (15.23) | 495.33 |
Industry Peer Group P/E ratioĀ
The industry P/E ratio ranges from a high of 14.09 to a low of (15.23), with an average P/E of 3.41.
Expansion
- The Proceeds of ā¹7.85 raised from the fresh issue will be used towards setting up a 6.1 MW Solar Power Plant for captive use.
- Funds of ā¹39 will be used for setting up a 4.2 MW Wind Power Plant for captive use.
- A portion of ā¹14.89 will be utilized towards the repayment/prepayment of certain borrowings taken by the company.
- A portion of the ā¹44 will be utilized towards working capital requirements of our Company.
- Lastly, the remaining funds will be used for inorganic growth through unidentified acquisitions and general corporate purposes.
Shree Ram Twistex IPOāShould You Apply or Not?
With a track record of 10 years in the textile industry, Shree Ram Twistex has maintained a long-lasting relationship with institutional customers such as Welspun Living Limited and Jindal Worldwide Limited. Moreover, the firm will be using the funds to set up solar and wind power to reduce electricity costs.
Shree Ram mostly operates on a B2B model, supplying directly to major textile manufacturers, garment exporters, and fabric processors. Financially, in FY25, the firm has reported a revenue of ā¹256.32 crore, which was ā¹231.72 crores in FY24. In FY23, the revenue decreased by -2%, in FY24, it reached to 8.5%, and in FY25, it rose to 10%. The profit also increased from ā¹6.55 crore in FY24 to ā¹8 crore in FY25. While the profit margin was maintained at 8% to 9%. When compared to the industry average P/E ratio, Shree Ram Twistex’s P/E ratio is 38.21x, indicating a slightly higher valuation than the average. As of February 22, the Shree Ram Twistex IPO GMP is ā¹5, indicating a listing gain of around 4-5%.
Overall, Shree Ram Twistex features decent financials, experienced promoters, and renewable energy integration plans that support future growth. However, high client concentration, cotton prices volatility, high geographic concentration, and high valuation are key concerns to watch out for.
If the overall market sentiment and GMP stay in support, then investors can subscribe for the IPO for short-term gains. While cautious investors must analyze the risks associated with companies before subscribing.
Please note:Ā
Investors are advised to make their own decisions and apply entirely at their own risk. This article is written using information from the companyās RHP (Red Herring Prospectus) data and online sources. If you have any queries, kindly contact the IPO Watch Team.
