Is Shree Ram Twistex IPO a good investment as an upcoming IPO?

When looking at new listings in the primary market, investors generally think about how relevant the sector is, how the economy is doing, and how strong the structure is. The Shree Ram Twistex IPO is a cotton yarn manufacturing company that is set to go public soon. It is worth taking a closer look at. This article looks at important parts of the Shree Ram Twistex IPO as a forthcoming IPO in a fair and objective way, using information that is available to the public and not giving any financial advice.

A look at the company and how it works

Shree Ram Twistex Limited was founded in 2010 and is situated in Rajkot, Gujarat. The company makes a wide range of cotton yarns, such as compact ring-spun, carded, combed, Eli Twist, slub, and Lycra-blended yarns. These yarns are used in textiles that are made into things like denim, socks, shirts, household textiles, and industrial fabrics. The company has one factory in Gondal with about 27,744 spindles. It uses a B2B model to sell mostly to garment exporters and fabric processors in several Indian states, although it also makes some indirect exports. The Shree Ram Twistex IPO is coming up soon, and its focus on quality and value-added products fits with what the textile industry needs as a whole.

Structure of the Issue and Use of Capital

The Shree Ram Twistex IPO is a new offering of ₹110.24 crore with 1.06 crore shares at a price range of ₹95–104. You need to buy at least 144 shares, which costs about ₹14,976 at the top end. The money will be used to build captive 6.1 MW solar and 4.2 MW wind generating facilities (to lower energy costs), pay off some debt, and increase working capital.

Indicators of Maret Valuation

The pre-issue market capitalization at the upper price band is about ₹416 crore, which means that the P/E ratio before the IPO is about 38 times and after the IPO is about 30 times, based on FY25 results. The grey-market premium has stayed low, around ₹5 (about 4.8%), which means there isn’t a lot of excitement about the listing right now.

Strategic Moves and the Sector Context

India’s textile sector benefits from both domestic demand and the ability to export, especially in the organized yarn segments. The company’s move toward captive renewable energy addresses a major cost driver—power—which might help margins grow over time. About 47% of the promoter’s shares are held before the offering, and the management team has a lot of experience. These things add to the story about the Shree Ram Twistex IPO as an upcoming IPO.

Important Things to Think About for a Fair Evaluation

Offer documents list standard concerns such relying too much on a small number of clients (the top 10 customers make up about 90% of income), having most of their sales come from Gujarat (about 92%), relying on a small number of cotton suppliers, and having trouble carrying out new power projects