IPO closes on 25 Feb'26
Shree Ram Twistex Ltd
Minimum Investment
₹ 14,976 / 144 shares
Our Verdict:
Neutral
- The company has demonstrated improvement in revenues and profitability, indicating better operational efficiency in a cyclical textile business.
- Planned investments in renewable energy (solar/wind) could help lower power costs over time and support margin stability.
- The business remains exposed to textile sector cyclicality, cotton price volatility, and customer concentration, which increases earnings variability.
- Valuations at the issue price appear to factor in near-term growth, resulting in a balanced risk–reward with limited margin of safety.
About the company
Founded in
31 Dec'13
Managing director
Bhavesh Ramani
- The company manufactures high-quality cotton yarn, primarily for the domestic market with some exports. It specializes in combed and carded yarns across various counts and covers the entire yarn production process, from raw cotton procurement to finished products used in knitting and weaving for industries like denim, towels, shirting and industrial fabrics.
- The company operates a modern spinning facility in Rajkot, Gujarat, with 17 compact ring-spinning machines and 27,744 spindles. The facility also includes 5 warehouses with a total storage capacity of 9,855 metric tonnes.
STRENGTHS
- Financial Performance: The company has achieved remarkable growth between FY23 and FY25, with a compounded annual growth rate (CAGR) of 9% in operating revenue, 12% in EBITDA and an impressive 97% increase in net profit.
- Expanding Margins: The EBITDA margin has grown from 8.16% in FY23 to 8.57% in FY25 and further expanded to 12.90% by H1FY26. Likewise, the PAT margin has increased from 0.96% to 3.14% and further to 5.30% by H1FY26.
- Improved Return Metrics: Return ratios have shown consistent year-over-year improvement. The Return on Equity (RoE) surged from 3.36% in FY23 to 10.80% in FY25, positioning the company at the top among its listed peers. Similarly, Return on Capital Employed (ROCE) rose from 8.61% to 13.37% during the same period.
- Cost Optimisation & Energy Strategy: The company’s focus on setting up captive renewable energy sources (solar and wind) is expected to structurally reduce power costs, improve cost predictability, and enhance competitiveness in a power-intensive textile business.
RISK FACTORS
- Customer Concentration: The company relies heavily on a few customers. In H1FY26, the top 10 customers contributed 80% of total revenue, with the largest customer accounting for 29%. Losing any of these customers could significantly impact operations and cash flows.
- Geographic Concentration: A large portion of revenue comes from Gujarat, representing 88% of total sales in H1FY26, exposing the company to geographic concentration risks.
- Dependence on Limited Cotton Suppliers: The company depends on a few suppliers for cotton bales, with the top 5 suppliers accounting for 81.72% of purchases in H1FY26. Disruptions in supply or price fluctuations could harm operations.
- Cash Flow Concerns: The company recorded negative cash flow from operating activities in FY24. Sustained negative cash flows could strain liquidity, affect day-to-day operations and weaken financial flexibility.
- Execution Risks: The company is transitioning to solar and wind energy with a proposed 6.1 MW captive solar power project and a 4.2 MW captive wind power project. Delays, cost overruns, or failure to realize projected benefits could negatively impact operations.
Financials
All Values are in Cr.
Issue details
Issue type
Mainstream
Issue size
₹ 110 Cr
Fresh Issue
₹ 110 Cr
OFS
₹
Price range
₹ 95 - 104
Lot size
144 shares
Issue Objective
The net proceeds from the fresh issue will be utilized for the following purposes:
· Funding the setup of a 6.1 MW solar power plant for captive use;
· Funding the setup of a 4.2 MW wind power plant for captive use;
· Repayment of certain borrowings availed by the company;
· Funding the working capital requirements of the company; and
· General corporate purposes.
Dates
Bidding open
23 Feb'26
Bidding close
25 Feb'26
Allotment date
26 Feb'26
Refund date
27 Feb'26
Listing
2 Mar'26
IPO Reservations
Qualified institutional buyers
>75%
Non-institutional investors
<15%
Retail individual investors
<10%
Read the Offer Document
© 2026 by Liquide Solutions Private Limited, SEBI Registered Research Analyst (Registration number - INH000009816)
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