Unraveling Cedaar Textile's Upcoming SME IPO: A Deep Dive for Investors
The Indian equity market continues to be a vibrant landscape for both established giants and emerging players, particularly within the Small and Medium Enterprises (SME) segment. These initial public offerings (IPOs) present unique avenues for individuals looking to partake in the growth narratives of promising companies. Among the latest to capture the market's attention is the forthcoming Cedaar Textile Limited IPO. This comprehensive blog post is designed to be your guide, offering detailed insights into this public offering to assist you in making well-informed investment choices.
We will journey through Cedaar Textile's core operations, scrutinize its financial health, detail the specifics of its issue, and explore its future strategic initiatives. By the end, you'll have a clear picture of whether this textile company holds the potential to weave a profitable tapestry for your investment portfolio as it steps onto the NSE SME platform.
Cedaar Textile IPO Timeline: Key Dates for Your Calendar
To ensure you don't miss out on important milestones, here's a concise timeline of the Cedaar Textile IPO:
Cedaar Textile Limited: Company Profile and Strengths
Established in September 2020, Cedaar Textile Limited operates as a specialist in the manufacturing of various yarns. The company is recognized for its production of high-quality melange yarn, which finds application in household textiles, woven fabrics, and hosiery products.
**Core Business & Product Spectrum:**
- **Manufacturing Process:** The production journey begins with the careful sourcing of raw materials. These are then processed by blending diverse fibers such as cotton, polyester, viscose, and acrylic, allowing for the creation of unique yarn compositions.
- **Product Diversity:**
- **Melange Yarns:** These yarns are characterized by a blend of different fibers and colors, which results in distinct textures and visual effects.
- **Solid Top-Dyed Yarns:** Known for their vibrant and consistent colors, these high-quality yarns are primarily used in premium apparel.
- **Grey Fancy Yarns:** Specialty yarns designed to impart unique textures and variations in design to fabrics.
- **Market Reach:** Cedaar Textile caters to a significant clientele, including prominent domestic and international fashion brands, highlighting its strong position in the market.
- **Human Capital:** As of June 1, 2025, the company sustains a direct workforce of 583 employees.
**Pillars of Competitive Advantage:**
- **Experienced Leadership:** The company benefits from a skilled and well-qualified management team and employee base.
- **Consistent Financial Footprint:** A demonstrated history of robust and stable financial performance.
- **Growing Client Portfolio:** An expanding customer base signals increasing market acceptance and demand for its products.
- **Adaptable Business Model:** Operates on a scalable and dependable business framework, poised for future expansion.
- **Promoter Expertise:** The promoters and senior management possess deep domain knowledge, providing strategic direction.
The Public Offer Decoded: Cedaar Textile IPO Specifics
Let's delve into the crucial figures and structural details of Cedaar Textile's Initial Public Offering.
| Key Detail | Specification |
|---|---|
| **IPO Format** | Bookbuilding SME IPO |
| **Share Price Range** | ₹130 to ₹140 per share |
| **Nominal Value per Share** | ₹10 |
| **Aggregate Issue Size** | 43.50 lakh shares (amounting to ₹60.90 Crores) |
| **Nature of Issue** | Completely a Fresh Issue of Shares |
| **Listing Platform** | NSE SME |
| **Designated Market Maker** | Nnm Securities Private Limited |
**Allocation Strategy: Share Reservation Details**
The total shares offered in the IPO are strategically distributed among various investor segments:
| Investor Category | Shares Allocated | Proportion (%) |
|---|---|---|
| Market Maker Portion | 2,18,000 | 5.01% |
| Qualified Institutional Buyers (QIB) Total | 13,04,000 | 29.98% |
| - Anchor Investor Allotment | 7,82,000 | 17.98% |
| - QIB (Excluding Anchor) Allotment | 5,22,000 | 12.00% |
| Non-Institutional Investors (NII/HNI) | 13,28,000 | 30.53% |
| Retail Individual Investors (RII) | 15,00,000 | 34.48% |
| **Total Shares Offered** | **43,50,000** | **100.00%** |
**Investment Framework: Understanding the Lot Sizes**
For both retail and High Net-worth Individuals (HNIs), understanding the minimum and maximum investment lot sizes is fundamental for participation:
| Application Category | Minimum Lots | Minimum Shares | Minimum Investment Amount |
|---|---|---|---|
| Retail (Min/Max) | 1 | 1,000 | ₹1,40,000 (Suggested at Cutoff Price) |
| HNI (Minimum) | 2 | 2,000 | ₹2,80,000 |
A common recommendation for investors is to place bids at the cutoff price to potentially enhance chances of allotment, especially in oversubscribed scenarios. For this IPO, the retail cutoff price bid is estimated around ₹1,40,000.
Financial Performance Overview: Cedaar Textile's Fiscal Health
An examination of the company's financial statements offers crucial insights into its operational efficiency and trajectory. Below is a summary of Cedaar Textile's recent consolidated financial figures (amounts in ₹ Crore):
| Period Ended | 31 Dec 2024 | 31 Mar 2024 | 31 Mar 2023 | 31 Mar 2022 |
|---|---|---|---|---|
| **Assets** | 222.77 | 198.23 | 175.84 | 154.45 |
| **Revenue** | 113.91 | 191.01 | 161.88 | 220.44 |
| **Profit After Tax (PAT)** | 7.06 | 11.05 | 4.59 | 7.99 |
| **EBITDA** | 28.81 | 15.63 | 15.26 | - |
| **Net Worth** | 60.70 | 25.24 | 14.19 | 9.60 |
| **Reserves and Surplus** | 51.17 | 17.74 | 13.94 | 9.35 |
| **Total Borrowing** | 120.63 | 146.15 | 137.01 | 121.01 |
**Key Financial Indicators & Valuation Metrics:**
As of March 31, 2024, Cedaar Textile's market capitalization stands at approximately ₹194.30 Crores. Here are some of its core performance metrics:
| Key Performance Indicator (As of Mar 31, 2024) | Value |
|---|---|
| **Return on Equity (ROE)** | 56.06% |
| **Return on Capital Employed (ROCE)** | 26.90% |
| **Debt/Equity Ratio** | 5.79 |
| **Profit After Tax Margin** | 5.83% |
| **EBITDA Margin** | 15.19% |
| **Price to Book Value (P/BV)** | 4.16 |
The company's Earnings Per Share (EPS) and Price-to-Earnings (P/E) ratios offer further perspectives on its valuation:
| Metric | Pre-IPO | Post-IPO (Annualized FY24) |
|---|---|---|
| **EPS (Rs)** | 11.60 | 7.33 |
| **P/E (x)** | 12.07 | 19.11 |
Note: Pre-IPO EPS is based on pre-issue shareholding and the latest full fiscal year earnings (FY24). Post-IPO EPS is calculated based on post-issue shareholding and annualized earnings for the period ending September 30, 2024.
Objectives of the Issue: Fueling Future Growth
The capital raised through this IPO is strategically earmarked for several key initiatives aimed at bolstering operational capabilities and fostering sustainable expansion:
- **Machinery Modernization:** A substantial portion (₹17.00 Cr) is allocated for upgrading existing machinery, which is vital for enhancing production efficiency and upholding product quality.
- **Sustainable Energy Adoption:** Funds totaling ₹8.00 Cr will be invested in installing a Grid-tied Solar PV Rooftop System for captive evacuation, reflecting a commitment to sustainable practices and reducing operational energy costs.
- **Working Capital Augmentation:** A significant allocation of ₹24.90 Cr is designated to bolster working capital, crucial for maintaining smooth day-to-day operations and supporting future growth initiatives.
- **General Corporate Needs:** The remaining capital will be utilized for general corporate purposes and to cover the expenses associated with the IPO, ensuring overall financial flexibility.
Promoter Structure and Ownership Dynamics
The company's direction is steered by a team of experienced individuals. The key promoters of Cedaar Textile Limited include Rajesh Mittal, Virender Goyal, Bachangada Monnappa Saraswathi, and Monnappa Nachappa Bachangada.
| Shareholding Period | Promoter Holding | Total Shares Outstanding |
|---|---|---|
| **Pre-Issue** | 100% | 95,28,600 |
| **Post-Issue** | 68.66% | 1,38,78,600 |
Note: The adjustment in promoter shareholding is a direct consequence of the issuance of fresh shares to the public as part of the IPO.
Anchor Investor Participation: A Sign of Confidence
The participation of anchor investors is often viewed as a positive signal, indicating institutional confidence in the IPO. Cedaar Textile IPO successfully secured ₹10.95 crore from anchor investors on June 27, 2025.
| Anchor Investor Detail | Information |
|---|---|
| **Anchor Bid Date** | June 27, 2025 |
| **Shares Allotted to Anchors** | 7,82,000 |
| **Anchor Portion Value** | ₹10.95 Crore |
| **Lock-in Period for 50% Shares** | Ends August 2, 2025 (30 Days from allotment) |
| **Lock-in Period for Remaining Shares** | Ends October 1, 2025 (90 Days from allotment) |
Strategic Analysis: SWOT of Cedaar Textile
To offer a comprehensive perspective, let's conduct a SWOT analysis, examining the Strengths, Weaknesses, Opportunities, and Threats pertinent to Cedaar Textile Limited.
**Strengths:**
- **Seasoned Leadership:** A robust team of qualified and experienced management and employees provides a strong foundation for strategic decision-making.
- **Consistent Financial Track Record:** The company has demonstrated stable revenue generation and profitability over recent fiscal periods.
- **Diversified Product Portfolio:** Its ability to manufacture various yarn types, including melange, solid top-dyed, and grey fancy yarns, allows it to cater to a broad spectrum of market demands.
- **Strong Client Relationships:** Serving prominent domestic and international fashion brands underscores its market acceptance and product quality.
- **Commitment to Sustainability:** The planned investment in a solar PV system indicates a proactive step towards operational cost efficiency and environmental responsibility.
**Weaknesses:**
- **Elevated Debt-to-Equity Ratio:** A high debt/equity ratio of 5.79 suggests a significant reliance on borrowed capital, which can introduce financial risk, although IPO proceeds are partly aimed at working capital needs.
- **Raw Material Price Sensitivity:** Dependence on a variety of fibers for production exposes the company to potential price volatility and supply chain disruptions.
- **Capital-Intensive Operations:** The nature of textile manufacturing demands substantial capital expenditures for machinery and operational maintenance.
- **Revenue Fluctuations:** Despite overall profitability, historical revenue figures show some variability across reporting periods.
**Opportunities:**
- **Growing Textile Market:** The Indian textile industry continues to exhibit growth, propelled by both domestic consumption and export demand.
- **Technological Upgrades:** Funds from the IPO dedicated to machinery modernization can lead to improved efficiency, increased output, and enhanced product quality, thereby strengthening competitiveness.
- **Market Expansion:** With augmented capacity and improved working capital, the company could explore venturing into new geographical markets or specialized textile segments.
- **Aligning with Green Trends:** The focus on solar energy resonates with the global shift towards sustainability, potentially attracting eco-conscious clients and investors.
- **Government Support:** Favorable government policies and initiatives for the textile sector could provide additional momentum for growth.
**Threats:**
- **Intense Market Competition:** The textile industry is characterized by high competition from a multitude of organized and unorganized players.
- **Raw Material Price Volatility:** Unpredictable fluctuations in the prices of key fibers like cotton and polyester can significantly impact profit margins.
- **Economic Downturns:** Broader economic slowdowns or reduced consumer purchasing power can directly affect the demand for textile products.
- **Regulatory Changes:** Modifications in environmental regulations, labor laws, or international trade policies could affect operational costs and compliance requirements.
- **Shifting Fashion Trends:** Rapid changes in fashion trends necessitate agile adaptation of product lines, requiring flexible manufacturing capabilities.
Essential Information: Contact & Registrar Details
For any queries related to Cedaar Textile Limited or its IPO, please find the relevant contact information below:
**Cedaar Textile Limited - Corporate Contacts:**
- **Address:** KSSIDC Plot No B-34, Industrial Estate, Yelahanka New Town, Bangalore Urban, Karnataka, 560064
- **Phone:** +91 9815610607
- **Email:** Info@cedaartextile.com
**IPO Registrar Information:**
The registrar for the Cedaar Textile IPO is responsible for managing the meticulous processes of share allotment and refund distribution.
- **Registrar Firm:** Skyline Financial Services Private Ltd
- **Phone:** 02228511022
- **Email:** ipo@skylinerta.com
Concluding Thoughts: Evaluating the Cedaar Textile IPO
The Cedaar Textile IPO offers a gateway into a textile manufacturing company distinguished by its established operations, a versatile product range, and ambitious plans for modernization and sustainable development. While the company showcases consistent financial performance and is guided by an experienced management team, prospective investors should also meticulously evaluate factors such as its debt profile and the inherently competitive dynamics of the textile industry.
As with all investment opportunities, it is paramount to conduct thorough personal due diligence. Reviewing the Red Herring Prospectus (RHP) in detail and comprehensively assessing the prevailing market conditions are crucial steps. A balanced understanding of the company's strengths, an honest acknowledgment of its weaknesses, and a careful evaluation of both opportunities and threats within the textile sector will empower you to arrive at an informed and confident decision regarding this upcoming SME IPO.
We wish you successful investing!