Shree Ram Twistex IPO Analysis

India’s textile sector rarely makes headlines unless there’s an export surge or a sharp spike in cotton prices.

But beneath the surface, something more structural has been shifting.

Mid-sized spinning companies are increasingly trying to control one of the most volatile components of their cost structure: power.

Electricity typically accounts for a meaningful share of operating expenses in cotton yarn manufacturing. And unlike raw cotton where prices are determined by global commodity cycles, power costs can actually be optimised over time through infrastructure investment.

It is within this evolving backdrop that Gujarat-based Shree Ram Twistex Limited is entering the public markets.

The Business Behind the IPO

Shree Ram Twistex Limited was originally incorporated on December 31, 2013 as Shree Ram Twistex Private Limited, before converting into a public limited company in September 2024 ahead of its proposed listing.

Based out of Gondal in Rajkot, the company operates within the cotton yarn spinning segment, supplying a range of products such as compact ring-spun yarn, combed and carded yarn, slub yarn, and Lycra-blended variants. These are typically used across applications like denim fabrics, towels, knitted garments, and shirting materials.

Rather than operating in the branded textile space, the company follows a business-to-business model supplying yarn to downstream fabric manufacturers and exporters both within India and in overseas markets.

The company is promoted by Bhaveshbhai Bhikhubhai Ramani, Jay Atulbhai Tilala, and Nidhi Bhaveshbhai Kothari.

Shree Ram Twistex IPO: Key Details

Because there is no Offer for Sale component, all proceeds raised from the IPO will go directly to the company rather than to existing shareholders — an important distinction for investors evaluating capital deployment.

Financial Growth So Far

Over the past three financial years, Shree Ram Twistex has reported steady topline expansion, with revenue increasing from ₹213.58 crore in FY23 to ₹256.32 crore in FY25.

Profitability has improved at a faster pace. Profit after tax rose from ₹2.05 crore in FY23 to ₹8 crore in FY25, while EBITDA margins have remained broadly in the 8–13% range.

For the six-month period ending FY26, the company has already reported ₹7 crore in PAT on revenue of ₹132.27 crore indicating operating momentum heading into the IPO.

Financial Snapshot

Balance sheet indicators have also shown moderate improvement, with the debt-to-equity ratio declining from 0.84 in FY25 to 0.75 in H1 FY26.

At the upper price band, the IPO implies a valuation multiple of roughly 30x earnings, with a pre-issue market capitalisation of around ₹416 crore.

Where the IPO Money Will Go

A meaningful portion of the IPO proceeds is expected to be directed toward renewable energy infrastructure, including investments in both solar and wind power installations.

Alongside this, funds will also be used for debt repayment and to meet working capital requirements.

For spinning companies, this shift could be strategically important.

While cotton price volatility remains outside managerial control, electricity sourcing is one of the few cost inputs that can be gradually stabilised. Captive renewable energy, if executed efficiently, has the potential to reduce long-term operating cost variability particularly in power-intensive processes like ring spinning.

Key Strengths

• Fully integrated spinning infrastructure
• Established customer and broker network built over nearly a decade of operations
• Promoter group’s continued involvement in strategic decisions
• Five warehouses with a combined storage capacity of approximately 9,855 MT

Centralised operations across the production process can improve process control, reduce lead times, and ensure more consistent output quality across batches.

The distribution layer helps expand market access across both domestic and export-oriented textile processors.

Key Risks

• Geographic concentration risk due to operations being located in Gujarat
• Dependence on a limited number of cotton suppliers
• Revenue concentration from key yarn products
• Exposure to cyclical demand in the spinning and textile industry

Any regional disruptions including infrastructure constraints, policy changes, or localised supply chain bottlenecks could impact operational continuity.

Fluctuations in cotton availability or pricing may directly influence cost structures and operating margins.

Final Thoughts

Shree Ram Twistex’s IPO offers exposure to a mid-scale yarn manufacturer that is attempting to move beyond traditional expansion strategies toward operational cost optimisation through renewable energy integration.

Whether this transition meaningfully enhances margins will ultimately depend on execution not just of the renewable infrastructure itself, but also of working capital discipline in an inherently cyclical business.