Siddhi Cotspin IPO 2025 – Price Band ₹102-108, 29,376 Spindles Capacity & Working Capital Focus
Siddhi Cotspin IPO: Siddhi Cotspin Limited, a cotton yarn manufacturer based in Gujarat, launches a ₹69.85 crore IPO with a fresh issue and OFS. With revenues of ~₹724.66 crore in FY25, modern facility in Dholi with 29,376 spindles, and plans to use proceeds for working capital, debt repayment, and expansion, here’s what investors should know.
With modern machinery, strong growth, and a ₹70 crore IPO, Siddhi Cotspin aims to scale capacity and strengthen finances in a competitive textile landscape.
Company Background
- Incorporation and Location: Siddhi Cotspin Limited was originally incorporated as a Private Limited company on 23 November 2015 (Registrar of Companies, Gujarat). It converted to a Public Limited Company on 12 February 2024.
- Promoters / Management: Promoters include Mr. Navin Saraogi and Mr. Sanjay Bindal. Mr. Navin Saraogi has ~20+ years in the textile industry and is Managing Director.
- Business Activity: The company is primarily engaged in manufacturing and selling cotton yarns, including value-added and specialty cotton yarns. Yarn types include Compact Carded & Combed Hosiery, Compact Weaving, Slub Yarn, Siro Slub Yarn, Lycra Core-Spun Yarn (Spandex), TFO Double Yarn, Eli KW & Eli CW, etc.
- Facility & Capacity: The manufacturing facility is located in Dholi Integrated Spinning Park, Village Dholi, Taluka Dholka, District Ahmedabad, Gujarat. It has a capacity of 29,376 spindles. Annual production capacity is over 90.11 lakh kg (≈9.0 million kg) cotton yarn, and substantial capacity for value-added yarn; it uses modern machinery, quality checks, etc.
IPO Details
| Parameter | Detail |
|---|---|
| Issue Size | ₹ 69.85 crore total. |
| Fresh Issue / OFS | Fresh issue of ≈ ₹ 53.40 crore; Offer For Sale (OFS) by existing shareholders ~ ₹ 16.46 crore. |
| Price Band | ₹ 102 to ₹ 108 per equity share. |
| Face Value | ₹ 10 per share. |
| Lot Size / Minimum | 1,200 shares per lot. Minimum investment for retail is ₹ 1,29,600 (for one lot at the upper band), i.e., Rs 1,29,600. |
| IPO Open / Close Dates | Opens: September 19, 2025; Closes: September 23, 2025. |
| Allotment & Listing | Basis of allotment on September 24, 2025; listing expected on the NSE SME platform on September 26, 2025. |
Financial Growth & Key Metrics
| Metric | FY 2022-23 | FY 2023-24 | FY 2024-25 |
|---|---|---|---|
| Revenue from operations | ~ ₹199.88 crore | ~ ₹581.18 crore | ~ ₹724.66 crore |
| Profit After Tax (PAT) | ~ ₹6.02 crore | ~ ₹12.18 crore | ~ ₹13.08 crore |
| EBITDA | ~ ₹25.10 crore (FY23) | ~ ₹34.72 crore (FY24) | ~ ₹32.87 crore (FY25) |
| Total Assets | ~ ₹184.13 crore (FY23) | ~ ₹181.25 crore (FY24) | ~ ₹182.83 crore (FY25) |
| Net Worth / Equity | ~ ₹54.18 crore (end FY23) | ~ ₹66.36 crore (FY24) | ~ ₹79.44 crore (FY25) |
| Borrowings / Debt | ~ ₹113.78 crore (FY23) | ~ ₹90.58 crore (FY24) | ~ ₹67.11 crore (FY25) |
Objects & Use of Proceeds (Future Plans)
- Working Capital: A portion of the funds (≈ ₹25.10 crore) is to be used for meeting working capital requirements.
- Debt Repayment / Prepayment: About ₹8.97 crore to repay or prepay certain outstanding borrowings.
- General Corporate Purposes: The remainder of IPO proceeds will be used for general corporate purposes.
Strengths, Risks & Coming Projects
Strengths:
- Consistent revenue growth: The company has nearly doubled revenue from ~₹199.9 crore in FY23 to ~₹724.7 crore in FY25.
- Gradual improvement in profit: Though margins are moderate, the net profit increased from ~₹6.02 crore to ~₹13.08 crore over two years.
- Debt reduction: Borrowings have declined from ~₹113.78 crore in FY23 to ~₹67.11 crore in FY25.
- Strong capacity and product diversification: Having a modern facility, producing a wide variety of cotton yarns and value-added yarns, which adds resilience.
Risks & Challenges:
- Margin pressure: Given small absolute profit relative to high revenue, competition, raw material price volatility (cotton, power etc.) could squeeze margins.
- Single facility concentration: The manufacturing facility is only at Dholi, Ahmedabad; any disruption could impact production.
- SME segment listing: SME category IPOs sometimes have lower liquidity and higher volatility post-listing.
Coming Projects / Plans:
- The IPO itself is aimed mainly at meeting working capital needs and reducing debt, rather than expanding capacity in a big way. So major capacity expansion doesn’t seem a stated project in this IPO.
- Maintaining and possibly upgrading quality / value-added product segments (specialty yarns) to serve denim and export markets.
Comparison with Peers (textile/yarn SMEs)
| Metric | Siddhi Cotspin (FY25) | Typical Peer in Yarn / SME Segment |
|---|---|---|
| Revenue growth (2-year CAGR) | Strong (~70-100%+ growth from FY23 to FY25) | Many peers are slower, or constrained by raw material cost, capacity limits |
| Profit Margin | Net profit ~1.8-2% of revenue (₹13.08 / ₹724.66 crore) | Similar SMEs often have low single-digit margins; above-average if niche/export, etc. |
| Debt / Leverage | Borrowings decreasing; improving net worth; still some debt load (~₹67.11 crore) | Peers with older plants may have higher fixed costs/debt servicing issues |
| Product Mix | Diverse value-added yarns, including specialty products | Some peers are more focused on standard yarns; less differentiation |
Financial Performance & Trends
Over the past two years, the company has shown strong topline growth: from ~₹199.88 crore in FY23 to ~₹724.66 crore in FY25, representing a CAGR well above industry average for similar SMEs. Profit after tax rose from ~₹6.02 crore (FY23) to ~₹13.08 crore (FY25). In parallel, the company has reduced its borrowings significantly — from ~₹113.78 crore to ~₹67.11 crore — helping to ease interest burden and improve leverage. However, despite strong growth, margins remain thin, reflecting the competitive and raw material-intensive nature of the textile/yarn business.
IPO Purpose & Use of Funds
The net proceeds (fresh capital) will be mainly allocated towards working capital (≈ ₹25.10 crore), which the company cites as essential for procurement of raw materials, managing inventory, etc. Around ₹8.97 crore will be used for repaying or prepaying certain borrowings. The rest of the funds will go towards corporate purposes, potentially enabling smoother operations, better supplier terms, or incremental improvements in process/quality.
What Investors Should Observe
- Valuation & Listing Gains: With the price band set at ₹102-108, and a minimum lot size of 1,200 shares, retail investors commit at least ~₹1.29 lakh per lot. Post-listing gains are uncertain; grey market premium appears muted (GMP ~0% reported at time of issue opening), suggesting modest sentiment beyond fundamental evaluation.
- Production & Quality Focus: Siddhi Cotspin’s differentiated yarn mix and value-added yarns (like lycra core spun, slub, etc.) are strengths in markets such as denim and hosiery, both domestically and for export. Sustained focus on quality, machinery uptime, and cost control will be important.
- Raw Material & Input Cost Risk: Cotton price volatility, power costs, labour costs, logistics, etc., could heavily affect margins. Also, macroeconomic factors (currency fluctuations, import duties for certain inputs) may affect export competitiveness.
Conclusion
The Siddhi Cotspin IPO is not a “moonshot” but appears to be a reasonable opportunity for investors interested in the textile SME sector. With solid growth, improving leverage, and capacity already installed, the company is well placed to benefit from demand for cotton yarns, especially value-added varieties. The IPO proceeds, while modest, should help in easing cash flow and debt obligations. For long-term investors who believe in the textile chain and export potential, Siddhi Cotspin may provide steady returns, without overly high risk — provided the company maintains discipline, quality, and cost management.
(Disclaimer: Recommendations, suggestions, views, and opinions expressed by experts are their own. Investors are advised to consult certified financial advisors before making any investment decisions.)
