Unveiling Rachit Prints IPO: A Deep Dive into the Specialty Fabric Manufacturer
The Indian financial landscape is buzzing with new opportunities, and Rachit Prints Ltd. is set to make its debut with an SME IPO. This offering presents an exciting prospect for investors keen on the specialty fabric sector, particularly those catering to the growing mattress industry. Let's embark on a comprehensive analysis of Rachit Prints, its business model, the specifics of its IPO, financial health, and potential outlook.
**Rachit Prints: Weaving Quality into Mattress Fabrics**
Established in 2003, Rachit Prints Limited has carved a niche for itself in the manufacturing of specialty fabrics. The company's core expertise lies in producing a diverse range of fabrics specifically designed for the mattress industry.
Operating on a Business-to-Business (B2B) model, Rachit Prints supplies its high-quality knitted, printed, and warp knit fabrics, alongside pillow fabrics and binding tapes, to prominent mattress brands. Their impressive client roster includes industry leaders like Sleepwell, Kurlon Enterprises, and Prime Comfort Products, showcasing their strong market presence and product reliability. Beyond manufacturing, the company also engages in trading comforters and bedsheets, diversifying its revenue streams.
**Diverse Product Portfolio:**
- Knitted Fabric: Primarily circular knitted fabric made from polyester yarns, widely utilized in home furnishings and mattresses.
- Warp Knit: Characterized by vertically interlocking loops, offering unique textile properties.
- Printed Fabric: Polyester printed fabrics for mattresses, created using advanced printing techniques for aesthetic appeal.
- Flame Resistant Fabric: Specialty fibers that inherently resist burning, or fabrics treated with chemicals to extinguish flames, enhancing safety.
**Key Business Strengths:**
- Experienced Management Team: A seasoned leadership guiding the company's growth.
- Advanced Knitting Technology: Utilizing modern techniques for efficient and high-quality production.
- Strategic Alliances: Strong partnerships with leading brands ensure consistent demand.
- Government Support: Benefiting from potential government incentives for the textile manufacturing sector.
**Rachit Prints IPO: Key Offering Details**
The Rachit Prints IPO is structured as a book-built issue, entirely comprising a fresh issuance of shares. This means the funds raised will go directly to the company, primarily to fuel its growth and strategic objectives.
| Aspect | Details |
|---|---|
| Issue Type | Book Building IPO |
| Listing Exchange | BSE SME |
| Face Value | ₹10 per share |
| Price Band | ₹140 to ₹149 per share |
| Total Issue Size | 13,08,000 shares (aggregating up to ₹19.49 Cr) |
| Sale Type | Fresh Capital |
**Important Dates for Investors:**
Mark your calendars for these crucial dates related to the Rachit Prints IPO:
**Allocation and Investment Opportunities**
**Share Reservation Across Categories:**
The IPO has allocated shares across various investor categories to ensure broad participation.
| Investor Category | Shares Offered | Percentage |
|---|---|---|
| Market Maker | 66,000 | 5.05% |
| Qualified Institutional Buyers (QIB) | 26,000 | 1.99% |
| Non-Institutional Investors (NII / HNI) | 6,08,000 | 46.48% |
| Retail Individual Investors (RII) | 6,08,000 | 46.48% |
| Total Shares Offered | 13,08,000 | 100.00% |
**Investment Lot Sizes:**
The minimum application quantity for Rachit Prints IPO is 1,000 shares. The investment amounts vary by investor category:
| Investor Category | Lots (Min) | Shares (Min) | Amount (Min) |
|---|---|---|---|
| Individual Investors (Retail) | 2 | 2,000 | ₹2,98,000 |
| Small HNI (S-HNI) | 3 | 3,000 | ₹4,47,000 |
| Big HNI (B-HNI) | 7 | 7,000 | ₹10,43,000 |
**Financial Overview: A Snapshot of Performance**
Rachit Prints Ltd. has demonstrated promising financial growth, particularly in recent years. Between the financial years ending March 31, 2024, and March 31, 2025, the company reported a 13% increase in revenue and a substantial 125% surge in Profit After Tax (PAT).
| Particulars (₹ Crore) | Mar 31, 2025 | Mar 31, 2024 | Mar 31, 2023 |
|---|---|---|---|
| Assets | 26.09 | 19.02 | 23.27 |
| Total Income | 41.78 | 37.11 | 32.39 |
| Profit After Tax (PAT) | 4.56 | 2.03 | 0.32 |
| EBITDA | 7.23 | 4.27 | 2.01 |
| Net Worth | 12.31 | 5.46 | 3.43 |
| Reserves and Surplus | 8.68 | 3.55 | 1.52 |
| Total Borrowing | 9.23 | 6.38 | 14.79 |
**Key Valuation Metrics:**
As of March 31, 2025, Rachit Prints IPO's market capitalization stands at ₹73.55 Crores. Analyzing other key performance indicators offers further insight:
| Metric | Value |
|---|---|
| Return on Equity (ROE) | 51.34% |
| Return on Capital Employed (ROCE) | 29.61% |
| Debt/Equity Ratio | 0.75 |
| Return on Net Worth (RoNW) | 37.06% |
| PAT Margin | 10.94% |
| EBITDA Margin | 17.33% |
| Price to Book Value | 4.24 |
| Valuation Parameter | Pre IPO | Post IPO |
|---|---|---|
| EPS (Rs) | 12.57 | 9.24 |
| P/E (x) | 11.85 | 16.12 |
**Promoter Group and Shareholding**
The company is promoted by Mr. Anupam Kansal, Ms. Naina Kansal, and Ms. Rose Kansal, who have been instrumental in its journey. Their commitment is reflected in their substantial shareholding.
- Pre-Issue Shareholding: 92.09%
- Post-Issue Shareholding: 67.69%
**Utilisation of IPO Proceeds: Fueling Future Growth**
The capital raised from the IPO is earmarked for strategic initiatives that are crucial for Rachit Prints' continued expansion and operational efficiency:
- Working Capital Requirement: ₹9.50 Crores will be allocated to meet the company's day-to-day operational needs, ensuring smooth functioning and growth.
- Capital Expenditure for Expansion: ₹4.40 Crores will be invested in purchasing new plant and machinery, crucial for expanding production capacity and upgrading technology.
- Partial Debt Pre-payment: ₹1.32 Crores will be used for partial pre-payment of existing term loans, which can improve the company's financial leverage.
- General Corporate Purposes: Funds will also be utilized for various general corporate needs, providing flexibility for unforeseen requirements and strategic initiatives.
**Strategic Assessment: Rachit Prints SWOT Analysis**
A thorough SWOT analysis helps in understanding Rachit Prints' current standing and future potential within the competitive landscape.
Strengths:
- Niche Market Expertise: Specialization in mattress fabrics provides a focused competitive edge.
- Strong B2B Relationships: Established clientele with leading mattress brands ensures stable demand.
- Modern Production Capabilities: Leveraging advanced knitting technology for efficiency and quality.
- Experienced Leadership: A capable management team with deep industry knowledge.
- Positive Financial Trajectory: Demonstrated significant growth in revenue and profitability.
Weaknesses:
- Dependency on Key Clients: A B2B model can create reliance on a few large customers.
- SME Listing Challenges: May face lower trading volumes and liquidity compared to mainboard listings.
- Limited Historical Data: Relatively shorter public financial record for detailed long-term analysis.
- Raw Material Price Sensitivity: Vulnerability to fluctuations in polyester yarn prices.
Opportunities:
- Booming Mattress Market: India's growing population and rising disposable incomes drive demand for mattresses and related components.
- Product Innovation: Scope to introduce new specialized fabrics (e.g., cooling, anti-bacterial) for mattresses.
- Geographic Expansion: Potential to expand into new domestic markets or explore export opportunities.
- Automation & Efficiency: Further investment in technology can boost production efficiency and reduce costs.
Threats:
- Intense Competition: Facing rivalry from both organized and unorganized players in the textile and fabric manufacturing sector.
- Economic Volatility: Downturns can impact consumer spending on home furnishings and mattress upgrades.
- Regulatory Changes: Changes in trade policies, environmental regulations, or textile-specific norms could affect operations.
- Supply Chain Disruptions: Potential risks from global supply chain issues affecting raw material availability or costs.
**Key IPO Intermediaries and Company Contact**
The successful execution of the Rachit Prints IPO is supported by experienced intermediaries:
- Book Running Lead Manager: Khambatta Securities Ltd.
- Registrar: Maashitla Securities Pvt.Ltd.
- Market Maker: Prabhat Financial Services Ltd.
**Rachit Prints Ltd. Contact Details:**
For direct inquiries regarding the company, interested parties can reach out using the following details:
B-9, 10 & 11, Udyog Puram, Delhi Road, Partapur, Meerut, Uttar Pradesh, 250103
Phone: +91-8958342975
Email: cs@rachitprints.co.in
Website: rachitprints.co.in
**Conclusion: Evaluating Rachit Prints' Future**
The Rachit Prints IPO offers a chance to invest in a growing company with a strong foundation in the specialized mattress fabric industry. With a demonstrated track record of increasing revenues and profits, strategic use of IPO proceeds for expansion and debt reduction, and an experienced management team, Rachit Prints positions itself as an interesting proposition. However, as with any investment, potential investors are encouraged to conduct their own thorough due diligence, considering the industry dynamics, competitive landscape, and their individual risk appetite before making an investment decision.