Fascinate Textiles IPO (11-13 August) Analysis

IPO Analysis | NSE Emerge | 100% Book Built Offer (Fresh Issue and Offer for Sale) | Regulation 229(2) and 253(1)

Based on Red Herring Prospectus dated July 23, 2026 | Readymade Garments Manufacturing (Menswear, Womenswear, Childrenswear) | Barasat, West Bengal

STATUS: LIVE RHP, BIDDING OPENS AUGUST 11 AND CLOSES AUGUST 13, 2026 | NO ANCHOR INVESTOR PORTION

Fresh Issue: up to 34,57,600 Equity Shares | Offer for Sale: up to 8,36,000 Equity Shares by Promoter Group Selling Shareholder Neetu Nahar (Nil WACA) | NSE Emerge Platform

Revenue Grew Over 4x and PAT Over 31x in 2 Years | RoNW of 48.02% (FY26) Exceeds Both Listed Peers | Negative Operating Cash Flow in All 3 Disclosed Fiscal Years

 Fascinate Textiles Limited was incorporated as Fascinate Textiles Private Limited on February 9, 2017 in Kolkata, West Bengal, and converted to a public limited company on May 21, 2025. Its CIN is U17299WB2017PLC219383, with its registered and corporate office in Barasat, North 24 Parganas, West Bengal. The Promoters are Vishal Nahar, Chirag Ahuja, Rishabh Nahar, Narinder Kumar Ahuja and Vishal Nahar HUF.

The Company manufactures readymade garments, with its product range spanning menswear, womenswear and childrenswear, including t-shirts, joggers, vests, leggings, shorts and infant wear, with a significant portion of output focused on children's garments. All operations are based in West Bengal, and a significant portion of revenue is generated from the Eastern and Southern parts of India.

Revenue from operations grew from Rs.2,888.02 Lakhs in Fiscal 2024 to Rs.11,708.69 Lakhs in Fiscal 2026, more than a 4 times increase in 2 years, while PAT grew from Rs.47.78 Lakhs to Rs.1,509.70 Lakhs over the same period, an increase of more than 31 times.

This is among the steepest growth trajectories in this report series, and, as discussed in Section 4, is accompanied by a genuinely persistent, unresolved negative operating cash flow pattern across all 3 disclosed fiscal years, which investors should weigh carefully alongside the growth headline.

Key Basics

Particulars	Details
Document Type	Red Herring Prospectus (RHP) dated July 23, 2026, noted as subject to update upon filing with the RoC. Bid or Offer opens August 11, 2026 and closes August 13, 2026. The Company and Selling Shareholder have explicitly stated there is no Anchor Investor portion for this Offer.
Issue Structure	100% Book Built Offer comprising a Fresh Issue of up to 34,57,600 Equity Shares by the Company and an Offer for Sale of up to 8,36,000 Equity Shares by a single Promoter Group Selling Shareholder, aggregating to up to 42,93,600 Equity Shares, of which 2,15,200 shares are reserved for the Market Maker. Face value Rs.10 per share.
Face Value	Rs.10 per Equity Share.
Promoters and Selling Shareholder	Promoters: Vishal Nahar, Chirag Ahuja, Rishabh Nahar, Narinder Kumar Ahuja and Vishal Nahar HUF. The entire Offer for Sale is being sold by Neetu Nahar, a Promoter Group Selling Shareholder, at a Weighted Average Cost of Acquisition of Nil (Rs.0), meaning her entire sale proceeds represent pure gain with no cash cost basis.
Eligibility Route	Regulation 229(2) and 253(1) of Chapter IX of the SEBI ICDR Regulations, 2018.
Listing Exchange	Emerge Platform of the National Stock Exchange of India (NSE Emerge).
BRLM	Affinity Global Capital Market Private Limited.
Registrar	Cameo Corporate Services Limited.
Bid or Offer Dates	Opens: August 11, 2026. Closes: August 13, 2026. No Anchor Investor Bid Date, as the Company has confirmed no anchor participation for this Offer.
Listed Peers, One Line	2 listed peers (Iris Clothings Limited and Kewal Kiran Clothing Limited), explicitly flagged by the Company itself as not strictly comparable given differences in nature and turnover of business.

A distinctive structural feature of this offer is the explicit absence of an Anchor Investor portion, unusual relative to most other RHPs in this report series, which typically include at least a modest anchor allocation and bidding date ahead of the general public issue. The entire Offer for Sale is conducted by a single Promoter Group member (not an individual Promoter) at a Nil cost basis.

How Will the IPO Money Be Used?

Object	Estimated Amount (Rs. Lakhs)	Substantiation
Funding working capital requirements	2,515.24	The largest identified Object by a wide margin, consistent with the Company's own disclosed working capital strain (see Section 4); based on internal management estimates and not independently appraised by a bank or financial institution.
Prepayment and repayment of secured and unsecured loans	267.77	A specific rupee figure disclosed; the summary reviewed here does not include a lender-by-lender certified schedule of the kind seen in some other reports in this series.
Capital expenditure for setting up an additional manufacturing facility	1,235.41	A specific rupee figure disclosed; supporting documentation such as chartered engineer certification was not located in the summary reviewed here.
General corporate purposes and Offer-related expenses	[TBD]	To be finalised upon determination of the Offer Price; standard SME cap conventions apply.

The dominant Object by far is working capital (Rs.2,515.24 Lakhs, well over half of the disclosed Net Offer Proceeds allocation), which directly reflects the Company's own disclosed history of cash being tied up in fast-growing trade receivables and inventory, discussed in Section 4.

The additional manufacturing facility capital expenditure (Rs.1,235.41 Lakhs) is comparatively modest relative to the scale of the Company's recent revenue growth, and the debt repayment Object is the smallest of the three.

As with all RHPs at this stage, none of the fund requirements have been independently appraised, and the Gross Proceeds, Net Proceeds and General Corporate Purposes figures remain undetermined until the Offer Price is fixed.

Financial Performance

P&L and Key Metrics (Rs. Lakhs unless stated)

Particulars	FY 2026	FY 2025	FY 2024
Revenue from operations	11,708.69	6,024.73	2,888.02
Total income	11,722.80	6,027.68	2,889.59
Total income growth (%)	94.48	108.60	32.17
Operating EBITDA	2,400.39	998.18	163.06
Operating EBITDA margin (%)	20.50	16.57	5.65
Profit after tax	1,509.70	581.11	47.78
PAT growth (%)	159.80	1,116.17	33.91
PAT margin (%)	12.89	9.65	1.65
Return on net worth / RoNW (%)	48.02	55.63	10.73
Return on equity (%)	54.82	42.41	11.66
Return on capital employed (%)	72.08	78.00	13.31
Debt to equity ratio (times)	0.83	1.74	2.77
NAV per equity share (Rs.)	30.52	74.19	31.68

Cash Flow Highlights (Rs. Lakhs)

Particulars	FY 2026	FY 2025	FY 2024
Net cash from / (used in) operating activities	(1,087.37)	(357.52)	(362.34)
Trade receivables (year-end balance)	3,527.74	1,733.03	533.79
Inventories (year-end balance)	4,812.93	1,546.60	1,270.32

This is one of the fastest-growing companies in this entire report series, and the growth is dramatic by any measure: total income nearly doubled in FY26 alone (94.48% growth) on top of a 108.60% jump in FY25, while PAT grew from a near-breakeven Rs.47.78 Lakhs in FY24 to Rs.1,509.70 Lakhs in FY26, an increase of more than 31 times in 2 years. EBITDA margin also improved substantially, from 5.65% to 20.50%, and the Debt-Equity ratio has fallen sharply (2.77 to 0.83 times) as profitability has scaled.

Investors should treat this rate of growth as exceptional rather than a stable baseline to extrapolate forward; a deceleration to more moderate, sustainable growth rates in future years would not be unusual for a company that has scaled this quickly off a small base.

The most important caveat in this report is cash flow, and unlike several other companies in this series where a headline 'negative cash flow' risk factor turned out to be a benign artifact of capital expenditure, here the negative operating cash flow is genuine, persistent and driven by core working capital strain: net cash used in operating activities was negative in every one of the last 3 fiscal years (Rs.(362.34) Lakhs, Rs.(357.52) Lakhs and Rs.(1,087.37) Lakhs respectively), and the Company's own detailed disclosure attributes this to trade receivables and inventory growing faster than the business converts profit into cash.

Trade receivables grew from Rs.533.79 Lakhs to Rs.3,527.74 Lakhs and inventories from Rs.1,270.32 Lakhs to Rs.4,812.93 Lakhs over the same 3 years, both far outpacing revenue growth in percentage terms in the most recent year. This is a genuine quality-of-earnings concern rather than a one-off or misleadingly labelled item, and is precisely why working capital is, appropriately, this Offer's single largest Object.

How Does It Compare to Peers?

Company	PAT FY26 (Rs. Lakhs)	Diluted EPS (Rs.)	P/E (times)	RoNW (%)	NAV/Share (Rs.)
Fascinate Textiles Limited	1,509.70	14.66	N/A (Price TBD)	48.02	30.52
Iris Clothings Limited	1,619.24	0.85	37.24	37.24	11.42
Kewal Kiran Clothing Limited	15,229.00	23.03	21.71	13.60	181.66

The RHP discloses 2 listed peers, Iris Clothings Limited and Kewal Kiran Clothing Limited, but the Company itself explicitly cautions that, given the nature and turnover of its business, these peers are not strictly comparable and are included only for broader reference.

Kewal Kiran Clothing is a far larger, branded apparel company (roughly 10 times Fascinate's PAT) with a lower RoNW (13.60%), while Iris Clothings is closer in absolute PAT terms but has a much smaller NAV per share, reflecting a different capital structure.

On RoNW, Fascinate's 48.02% is the highest of the 3, though this should be read cautiously given the Company's own comparability caveat, its extremely rapid recent growth, and the small, recently expanded equity base that RoNW is measured against, all factors that can inflate this ratio for a fast-scaling smaller company relative to larger, more stable peers.

Key Risks

l The Company has recorded negative net cash flow from operating activities in every one of the last 3 disclosed fiscal years (Rs.(362.34) Lakhs, Rs.(357.52) Lakhs and Rs.(1,087.37) Lakhs), driven by trade receivables and inventory both growing substantially faster than the Company converts profit into cash (receivables up more than 6.6 times and inventory up more than 3.8 times from FY24 to FY26). This is a genuine, unresolved working capital strain rather than a one-off or misleadingly framed item, and is the specific reason working capital is this Offer's largest single Object.

l Revenue and profit growth have been extraordinarily rapid (total income up 94.48% in FY26 alone, PAT up more than 31 times over 2 years), a rate of growth the Company's own Risk Factors and this report both caution is unlikely to be sustainable at this pace, making historical performance a weak guide to future results.

l The Company's Debt-Equity ratio, while improving sharply, remains a disclosed standalone risk factor, and the Company has taken Promoter guarantees on its secured debt facilities, linking personal Promoter exposure to Company borrowings.

l A significant portion of revenue is generated from the Eastern and Southern parts of India, and the Company is substantially dependent on a concentrated set of key customers and suppliers for raw materials, without necessarily long-term contractual commitments.

l There is a documented history of delayed statutory filings across many years and categories (GSTR returns delayed by as much as 61 days in individual instances, alongside EPF, ESIC and Registrar of Companies filing delays spanning Fiscal 2017-18 through recent years).

l There is no Anchor Investor portion for this Offer, which is unusual relative to most other reports in this series and removes one signal (anchor institutional demand ahead of the public issue) that investors elsewhere in this series have been able to observe before bidding.

l The Company has entered into related party transactions with Promoters, Directors and Promoter Group entities in the past and may continue to do so; while stated to be at arm's length and Section 188 compliant, more favourable terms with unrelated parties cannot be assured.

l The business is both manpower and machine intensive, and cost of production is exposed to fluctuations in raw material prices (fabrics, cotton yarn, dyes and chemicals).

l Income and sales are subject to seasonal fluctuations, and the Company depends on third-party transport providers for delivery of raw materials and finished goods.

l The industry is highly competitive, and the Company's ability to compete effectively against both organised and unorganised players is not guaranteed.

l A small number of Promoter Group members acquired shares at Rs.900 to Rs.949 per share in early 2025 shortly before receiving a much larger allotment at nil cost in August 2025 (consistent with a bonus issue), a detail investors may wish to note when assessing recent capital structure changes.

l The Company is dependent on its Promoters, Directors and Key Managerial Personnel, and is exposed to fraud, theft or employee negligence risk typical of a manufacturing operation.

Positives to Note

l The Company has demonstrated an exceptional growth trajectory, with revenue growing more than 4 times and PAT more than 31 times over the 2 years from FY24 to FY26, alongside a substantial improvement in EBITDA margin from 5.65% to 20.50%.

l The Debt-Equity ratio has improved sharply and consistently, from 2.77 times in FY24 to 0.83 times in FY26, indicating meaningful deleveraging alongside the Company's profitability growth.

l RoNW of 48.02% in FY26 is the highest among the 3 companies in the disclosed comparison set, including a much larger, established branded apparel peer (Kewal Kiran Clothing Limited), albeit with the comparability caveats noted in Section 5.

l The Company has provided a detailed, transparent breakdown of the specific drivers behind its negative operating cash flow (receivables, inventory, loans and advances) rather than a generic disclosure, giving investors a clear, itemised basis to assess the underlying working capital dynamics.

l The largest Object of this Offer, working capital funding, is directly aligned with the Company's own disclosed operational need, rather than an unrelated or opportunistic use of proceeds.

l The Company's product range spans multiple garment categories and age groups (menswear, womenswear, childrenswear), providing some diversification within the readymade garments segment rather than dependence on a single product line.

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