Shree Ram Twistex IPO Analysis

Shree Ram Twistex Limited, a Gujarat-based cotton yarn manufacturer, is launching its mainboard IPO to raise up to ₹110.24 crore through a 100% fresh issue. The issue opens on February 23, 2026. For investors tracking textile sector IPOs, margin expansion stories, or green energy integration in manufacturing, this offer presents both opportunity and measurable risk.

This detailed IPO review is designed for retail investors, HNIs, long-term equity participants, and IPO-focused portfolio builders who want clarity on valuation, financial strength, business quality, risk exposure, and sector outlook before committing capital.

It explains what Shree Ram Twistex does, how it earns money, whether margins are sustainable, how it compares with peers, and whether the IPO pricing justifies participation.

Table Of Contents

1. IPO Details And Timeline
2. Company Overview And Business Model
3. Manufacturing Capacity And Technology Edge
4. Product Portfolio And Revenue Mix
5. Industry Outlook And Textile Sector Trends
6. Financial Performance Analysis
7. Balance Sheet Strength And Cash Flow Position
8. Valuation Analysis And Peer Comparison
9. Use Of IPO Proceeds And Green Energy Strategy
10. Growth Drivers And Competitive Advantages
11. Key Risks Investors Must Consider
12. Who Should Consider This IPO
13. Conclusion
14. FAQs

IPO Details And Timeline

Shree Ram Twistex IPO is a mainboard issue comprising 1.06 crore equity shares. It is a 100% fresh issue with no offer for sale component.

Key IPO metrics are summarised below:

Category allocation:

The relatively high QIB allocation indicates institutional participation focus, which can influence subscription momentum and listing performance.

Company Overview And Business Model

Shree Ram Twistex Limited is engaged in the manufacturing of cotton yarn. It operates a B2B model supplying yarn to textile manufacturers for knitting and weaving applications.

The company produces various yarn categories including:

• Compact ring-spun yarn
• Carded yarn
• Eli Twist yarn
• Slub yarn
• Lycra blended yarn

These yarns are used in:

• Denim
• Towels
• Shirting fabrics
• Home textiles

The company primarily operates from its Gondal, Rajkot facility in Gujarat. The manufacturing capacity stands at 27,744 spindles with an installed production capacity of 9,855 MT.

Promoters include Bhaveshbhai Bikhubhai Ramani, Jay Atulbhai Tilala, and Nidhi Bhaveshbhai Kothari.

Revenue is largely domestic, with Gujarat contributing 93.48% of FY25 revenue. The company also exports yarn to select international markets.

Manufacturing Capacity And Technology Edge

One of the company’s structural strengths is its machinery sourcing.

It uses European equipment from:

• Rieter
• Trutzschler
• Savio

This machinery enables:

• Higher yield
• Better fibre utilisation
• Reduced wastage
• Improved yarn consistency

In textile manufacturing, machinery quality directly impacts EBITDA margins. High efficiency spinning lines allow:

• Lower energy consumption per unit
• Fewer defects
• Higher premium pricing for specialised yarn

With 27,744 spindles and a warehousing capacity of 9,855 MT across five warehouses, Shree Ram Twistex has created operational scalability within a controlled footprint.

Product Portfolio And Revenue Mix

The company is shifting towards higher-margin products.

Key transition trends:

• Organic yarn contribution rose to 21.52% of H1 FY26 revenue from 0.87% in FY25
• Eli Twist yarn contributed 29.60% in FY25

Organic and speciality yarns typically command premium pricing due to:

• Sustainability demand
• Branded textile sourcing requirements
• Export market positioning

This shift towards value-added yarns is one of the major reasons behind margin expansion.

Industry Outlook And Textile Sector Trends

The global textile industry is projected to reach USD 350 billion by 2030. India’s spinning sector benefits from:

• China plus one strategy
• Competitive cotton availability
• Lower labour costs
• Expanding export opportunities

Value-added yarn manufacturers stand to benefit more than commodity yarn producers because:

• Brands demand sustainable sourcing
• Organic cotton is gaining global acceptance
• ESG compliance influences procurement decisions

Energy efficiency and green manufacturing are becoming procurement criteria, especially for export-oriented textile supply chains.

Shree Ram Twistex’s investment in renewable energy aligns with this structural shift in the industry.

Financial Performance Analysis

The company has demonstrated consistent revenue growth.

Key observations:

Revenue growth from FY23 to FY25 reflects steady expansion.

PAT growth shows strong margin expansion. PAT rose from ₹2.05 crore in FY23 to ₹8.00 crore in FY25, delivering a CAGR of 97.46%.

EBITDA margin expanded sharply to 12.90% in H1 FY26, suggesting product mix improvement and operating efficiency gains.

Return ratios:

• ROE FY25: 11.36%
• ROCE FY25: 13.37%
• EPS FY25: ₹2.72

Margin expansion is the primary value creation lever here rather than top-line growth acceleration.

Balance Sheet Strength And Cash Flow Position

Debt levels range between ₹51 crore to ₹67 crore across recent years. Net worth improved to ₹73.18 crore.

Working capital efficiency improved significantly:

• Working capital days reduced to 34 days in FY25 from 71 days in FY24

However, FY24 recorded a negative operating cash flow of ₹4.91 crore. Textile businesses are working capital-intensive due to:

• Raw cotton procurement cycles
• Inventory holding
• Credit sales

Investors should monitor:

• Post IPO debt reduction impact
• Sustainability of operating cash flow
• Interest cost savings

Debt repayment using ₹14.89 crore from IPO proceeds will improve leverage metrics.

Valuation Analysis And Peer Comparison

At ₹104 per share, upper band:

• Post IPO P/E: approximately 29.69x FY25 earnings
• Pre IPO P/E: approximately 38.21x

Compared with peers:

• Vardhman Textiles trades around 18 to 20x earnings
• Trident
• Welspun Living
• Ambika Cotton Mills

Shree Ram Twistex trades at a premium to larger peers. The premium appears to be justified only if:

• EBITDA margins sustain above 11%
• Organic yarn mix continues rising
• Renewable energy cost savings materialise

Scale disadvantage remains a factor. Larger peers benefit from integrated operations and stronger brand positioning.

Before deciding your allocation, review key financial ratios, peer comparison and updated risk metrics. Visit the Shree Ram Twistex IPO dashboard for structured IPO analysis.

Use Of IPO Proceeds And Green Energy Strategy

IPO proceeds are allocated as follows:

Power cost is a major expense in spinning operations. Current power cost is ₹8.92 per unit.

Management expects:

• 200 to 300 bps margin improvement from captive renewable energy
• Lower dependency on grid power
• Improved ESG positioning

If executed efficiently, renewable integration can structurally lift EBITDA margin.

However, execution risk in wind and solar commissioning remains.

Growth Drivers And Competitive Advantages

1. Shift to High Margin Organic Yarn: Organic yarn revenue jumped sharply. This suggests successful repositioning into value added segments.
2. Green Energy Integration: Captive solar and wind power will reduce cost volatility.
3. European Technology: High-end spinning machinery improves yield and product consistency.
4. Industry Tailwinds: China plus one strategy favours Indian spinners.
5. Improved Working Capital Efficiency: Reduction from 71 days to 34 days improves capital productivity.

Key Risks Investors Must Consider

Customer concentration risk is high.

• Welspun Living contributes 28.57% of H1 FY26 revenue
• Top 10 clients contribute 79.74%

There are no long-term binding contracts. Loss of one major client could materially impact revenue.

Geographic concentration:

• Gujarat accounts for 93.48% of FY25 revenue

Raw cotton price volatility:

• Raw cotton contributes nearly 75% of input costs
• Global commodity fluctuations directly impact margins

Past CRISIL non-cooperation tag may raise governance perception concerns.

Execution risk:

• Wind and solar project delays
• Capital expenditure overruns

Valuation risk:

• Trading at a premium multiple relative to peers

Who Should Consider This IPO

This IPO may suit:

• Investors seeking small-cap growth stories
• Investors are comfortable with textile cyclicality
• Portfolio participants are betting on margin expansion
• Those looking at renewable integration themes in manufacturing

It may not suit:

• Conservative investors
• Investors seeking a stable dividend yield
• Those uncomfortable with customer concentration risk

Position sizing should be moderate given the scale and concentration exposure.

Compare this IPO with other live and upcoming mainboard issues before committing capital. Check the full IPO calendar and issue details on Finology Ticker.

Conclusion

Shree Ram Twistex represents a margin expansion-driven textile play. Revenue growth is steady but not explosive. Profitability improvement is meaningful, supported by product mix shift and cost control.

At around 29.69x FY25 earnings, the valuation is not cheap compared with established textile majors. Execution of renewable energy projects and sustained organic yarn demand are critical.

Aggressive long-term investors may consider a limited allocation. Risk-averse participants may wait for post-listing financial confirmation before entering.

FAQs

1. What is the issue size of Shree Ram Twistex IPO?
   The IPO size is ₹110.24 crore through a 100% fresh issue of 1.06 crore equity shares.
    
2. What is the price band of Shree Ram Twistex IPO?
   The price band is ₹95 to ₹104 per share.
    
3. Is Shree Ram Twistex IPO expensive?
   At around 29.69x FY25 earnings, it trades at a premium to larger textile peers. Growth visibility must justify this valuation.
    
4. How strong is Shree Ram Twistex financial performance?
   Revenue grew from ₹213.10 crore in FY23 to ₹255.04 crore in FY25. PAT grew sharply with EBITDA margin reaching 12.90% in H1 FY26.
    
5. What are the biggest risks?
   Customer concentration, raw cotton price volatility, regional revenue concentration, and renewable energy execution risk.
    
6. Will green energy improve margins?
   Management expects 200 to 300 bps EBITDA margin improvement from solar and wind power integration.
    
7. Is this IPO suitable for long term investors?
   It may suit aggressive investors who understand textile cyclicality and margin driven business models.