Sham Foam IPO (11-13 August) Analysis

IPO Analysis | BSE SME | 100% Fixed Price Issue (Pure Fresh Issue) | Regulation 229(2) and 253(3)

Based on Prospectus dated August 5, 2026 | Polyurethane (PU) Foam Manufacturing for Mattress, Furniture and Allied Industries | Ambala, Haryana

STATUS: LIVE FIXED PRICE ISSUE, OPENS TUESDAY AUGUST 11 AND CLOSES THURSDAY AUGUST 13, 2026

Pure Fresh Issue of up to 31,14,000 Equity Shares at a Fixed Price of Rs.130 per Share | Gross Proceeds Rs.4,048.20 Lakhs | No Offer for Sale

RoNW of 40.97% (FY26) Well Above Both Listed Peers (Sheela Foam, Wakefit Innovations) | PAT More Than Doubled in FY26

IMPORTANT DISCLOSURE NOTE:

Sheela Foam Limited, disclosed elsewhere in this Prospectus as one of the Company's 2 listed industry peers, has instituted a pending civil suit (No. 705/2023, Delhi High Court, filed October 4, 2023) against the Company alleging trademark infringement and passing off over the Company's use of 'FEATHER FRESH', seeking a permanent injunction, damages and stock recall, with punitive damages sought aggregating Rs. 2,00,10,000. Two rounds of court-referred mediation have failed to produce a settlement; the matter is next listed for November 27, 2026. Separately, several of the Company's brand names (including the disputed FEATHER FRESH and DECORWELL) are registered in the personal names of a Promoter and a Promoter Group member, not the Company itself, and are used under a resource sharing agreement and NOCs pending formal assignment to the Company. See Section 6 for full detail.

 Sham Foam Limited was incorporated as Sham Foam Private Limited on June 26, 2020 in Haryana, and converted to a public limited company on September 20, 2024. Its CIN is U36104HR2020PLC087011, with its registered office and manufacturing facility in Village Rajpura, Tehsil Shahzadpur, Ambala City, Haryana. The Promoters are Rajinder Kumar Jindal, Sanjeev Kumar Jindal, Monica Jindal, Deepika Jindal, Abhinav Jindal, Kunal Jindal and Charming Fashions Private Limited.

The Company manufactures Polyurethane (PU) Foam, catering primarily to the mattress and furniture industry, with further applications in sports products, seat covers, shoes, innerwear, jackets and related apparel.

It positions itself as a full-stack, vertically integrated business spanning conceptualisation, design and engineering through manufacturing and distribution, and operates a single, ISO 9001:2015 and BIS-certified manufacturing facility spanning 2,04,460 sq. feet with an installed capacity of 15,000 TPA.

The Company sells through a pan-India dealer network of more than 1,300 dealers across 13 states, without maintaining its own retail stores, and does not hold long-term formal contracts with most of its raw material suppliers or dealers.

Revenue from operations grew from Rs.7,372.86 Lakhs in Fiscal 2024 to Rs.9,231.92 Lakhs in Fiscal 2026, while PAT more than doubled in the most recent year, from Rs.358.19 Lakhs in FY 2025 to Rs.865.06 Lakhs in FY 2026, with EBITDA margin also roughly doubling from 5.78% to 11.91% over the same period.

This growth acceleration coincides with an ongoing, disputed trademark infringement suit brought by listed peer Sheela Foam Limited, discussed in Section 6, which investors should weigh alongside the Company's otherwise strong recent financial performance.

Key Basics

Particulars	Details
Document Type	Prospectus dated August 5, 2026, a 100% Fixed Price Issue (not book built). Issue opens Tuesday, August 11, 2026 and closes Thursday, August 13, 2026.
Issue Structure	Pure Fresh Issue of up to 31,14,000 Equity Shares at a Fixed Issue Price of Rs.130.00 per Equity Share, aggregating to Rs.4,048.20 Lakhs Gross Proceeds, of which 1,56,000 shares are reserved for the Market Maker. No Offer for Sale; the Prospectus explicitly states this is not applicable as the entire Issue is a Fresh Issue.
Face Value	Rs.10 per Equity Share. The Fixed Issue Price of Rs.130.00 represents 13 times face value.
Promoters	Rajinder Kumar Jindal, Sanjeev Kumar Jindal, Monica Jindal, Deepika Jindal, Abhinav Jindal, Kunal Jindal and Charming Fashions Private Limited.
Selling Shareholders	Not applicable. This Issue is entirely a Fresh Issue with no Offer for Sale.
Eligibility Route	Regulation 229(2) and 253(3) of the SEBI ICDR Regulations, 2018, as the Company's post-Issue paid-up capital exceeds Rs.10.00 Crore.
Listing Exchange	BSE SME Platform, with in-principle approval dated March 20, 2026.
Lead Managers	Corporate Makers Capital Limited and Navigant Corporate Advisors Limited.
Registrar	Alankit Assignments Limited.
Issue Dates	Opens: Tuesday, August 11, 2026. Closes: Thursday, August 13, 2026.
Listed Peers, One Line	2 listed peers, Sheela Foam Limited and Wakefit Innovations Limited, both much larger; the Company's own RoNW is well above both, though Sheela Foam is also the plaintiff in pending litigation against the Company (see Section 6).

Because this is a Fixed Price Issue, the Issue Price, Gross Proceeds and full Net Proceeds allocation are all already determined and disclosed, unlike the RHPs elsewhere in this series still awaiting price discovery.

The most distinctive and important feature of this offer, beyond its pricing structure, is that one of the Company's own disclosed listed peers, Sheela Foam Limited, is simultaneously the plaintiff in active litigation against the Company over trademark use, a genuinely unusual overlap investors should weigh carefully.

How Will the IPO Money Be Used?

Object	Estimated Amount (Rs. Lakhs)	Substantiation
Capital expenditure for civil construction and purchase of machinery and equipment at the existing manufacturing facility	1,471.65	A specific rupee figure disclosed as part of the fully resolved Net Proceeds table (since this is a Fixed Price Issue); no independent third-party appraisal or chartered engineer certificate referenced in the summary reviewed here.
Working capital requirements	1,425.00	A specific rupee figure disclosed; based on internal management estimates.
General corporate purposes	603.85	Capped at 15% of Gross Proceeds or Rs.1,000 Lakhs, whichever is lower; here already quantified since this is a Fixed Price Issue.

Because this is a Fixed Price Issue, the full Net Proceeds table is already resolved: Rs.4,048.20 Lakhs of Gross Proceeds, less Rs.547.70 Lakhs of Issue-related expenses, leaving Rs.3,500.50 Lakhs of Net Proceeds split precisely across the 3 Objects above with no blank [TBD] figures remaining.

The capital expenditure Object is directed at the Company's existing single facility (civil construction plus machinery) rather than a new greenfield site, which somewhat limits execution complexity relative to companies building new plants from scratch, though the summary reviewed here does not indicate any independent chartered engineer certification of the underlying cost estimate.

Financial Performance

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

Particulars	FY 2026	FY 2025	FY 2024
Revenue from operations	9,231.92	8,114.82	7,372.86
Total income	9,238.71	8,162.06	7,389.18
EBITDA	1,099.87	469.17	443.00
EBITDA margin (%)	11.91	5.78	6.01
Net profit before tax	1,044.42	442.95	363.14
Profit for the period (PAT)	865.06	358.19	296.64
PAT margin (%)	9.37	4.41	4.02
Return on net worth / RoNW (%)	40.97	28.74	33.40
NAV per equity share (Rs.)	25.21	14.88	10.70

 Cash Flow Highlights (Rs. Lakhs)

Particulars	FY 2026	FY 2025	FY 2024
Net cash from operating activities	1,277.71	21.64	730.22
Net cash used in investing activities	(210.43)	(30.55)	(71.87)
Net cash used in financing activities	(527.85)	(96.47)	(440.27)
Net increase / (decrease) in cash and cash equivalents	539.43	(105.37)	218.09

Independently recomputed, revenue grew a modest 10.06% in FY25 before accelerating to 13.77% in FY26, but the more striking shift is in profitability: PAT nearly doubled from FY25 to FY26 (Rs.358.19 Lakhs to Rs.865.06 Lakhs), and EBITDA margin roughly doubled from 5.78% to 11.91% over the same single year, both reconciling with the Prospectus's own disclosed figures. RoNW has been volatile but ended the track record strong, dipping from 33.40% (FY24) to 28.74% (FY25) before rising sharply to 40.97% (FY26).

On cash flow, the Company's own Risk Factors are titled around 'negative cash flows', but as with a small number of other companies in this series, this refers only to investing activities (driven by ordinary fixed asset additions in all 3 years) and financing activities (driven by loan and interest repayments, not distress).

Operating cash flow was positive and substantial in every year of the disclosed track record, including a particularly strong Rs.1,277.71 Lakhs in FY 2026, and overall net cash increased in 2 of the 3 years, dipping only modestly (Rs.105.37 Lakhs) in FY25. Readers should not mistake the risk factor's headline framing for an operating cash flow problem; the underlying business has been genuinely cash generative from operations throughout.

How Does It Compare to Peers?

Company	Revenue (Rs. Lakhs)	Basic EPS (Rs.)	P/E (times)	RoNW (%)	NAV/Share (Rs.)
Sham Foam Limited	9,231.92	12.58	10.33 (at Issue Price)	40.97	25.21
Sheela Foam Limited (standalone)	2,96,227.00	11.96	64.50	4.48	266.69
Wakefit Innovations Limited (standalone)	1,48,894.30	6.03	21.22	22.90	343.00

The Prospectus discloses 2 listed peers, Sheela Foam Limited and Wakefit Innovations Limited, both dramatically larger than Sham Foam by revenue (roughly 32 times and 16 times respectively). Sham Foam's RoNW of 40.97% is well above both peers (4.48% and 22.90%), though this partly reflects Sham Foam's much smaller, more recently built equity base relative to these much larger, more mature companies, a dynamic that can inflate RoNW for smaller, fast-growing issuers.

The industry P/E range disclosed (21.22 to 64.50 times, average 42.86 times) sits well above Sham Foam's own implied P/E of 10.33 times at the fixed Rs.130 Issue Price, though direct comparability is limited given the scale gap.

Investors should also note that Sheela Foam Limited, disclosed here as a comparable listed peer, is simultaneously the plaintiff in active litigation against Sham Foam described in Section 6, an unusual dynamic worth bearing in mind when interpreting this comparison.

Key Risks

l Sheela Foam Limited, one of only 2 listed peers disclosed elsewhere in this Prospectus, has instituted a pending civil suit (Delhi High Court, No. 705/2023, filed October 4, 2023) alleging trademark infringement and passing off over the Company's use of 'FEATHER FRESH', also alleging that one of the Company's Directors was previously a distributor for Sheela Foam and adopted the disputed mark dishonestly. Sheela Foam seeks a permanent injunction, rendition of accounts, stock recall and damages (including punitive damages) aggregating Rs.2,00,10,000. Two rounds of court-ordered mediation (August and November 2025) have failed to produce a settlement, and the matter is next listed for November 27, 2026; the Company disputes the claim's merit but the outcome remains genuinely uncertain.

l Several of the Company's core brand names, including the disputed FEATHER FRESH and also DECORWELL, are registered in the personal names of Promoter Sanjeev Kumar Jindal and Promoter Group member Parwati Devi, not the Company itself, and are used under NOCs and a resource sharing agreement; assignment applications to transfer these trademarks into the Company's own name were only filed in March 2026 and remain pending, and one device trademark remains unregistered altogether (application accepted and advertised, not yet granted).

l Revenue is dependent on a concentrated customer base (top 10 customers contributed 25.06% to 28.02% of revenue across the 3 disclosed years) and a concentrated geographic and single-product base (PU Foam), and the Company has no formal, long-term contracts with most suppliers or dealers.

l The Company has a documented, recurring history of delayed Registrar of Companies filings spanning every fiscal year from 2020-21 through 2025-26 (MGT-14, PAS-3, CHG-1, ADT-1, DPT-3, INC-27, AOC-4, DIR-12), including a DPT-3 filing delayed until January 2026 for a 2022-23 obligation, indicating an ongoing rather than fully resolved compliance gap.

l The Registered Office cum manufacturing facility is entirely on leased premises, leased specifically from a Promoter (Mr. Rajinder Kumar Jindal), concentrating both operational and related-party lease risk in a single site with no owned backup facility.

l There have been instances of delayed payment of statutory dues, and the Company's manufacturing operations are concentrated at a single facility, so any shutdown or accident there would directly affect the whole business.

l The Company depends significantly on its Promoters, Key Managerial Personnel and Senior Management, and has entered into related party transactions in the past (including the trademark resource sharing and facility lease arrangements with Promoters) and may continue to do so.

l The home comfort products and PU foam manufacturing industry is competitive, and the Company's principal raw materials (Toluene diisocyanates and polyols) are sourced partly from overseas suppliers in Hong Kong, Thailand and Singapore, exposing it to currency and international supply chain risk.

l The Company depends on third-party transportation providers for delivery of inputs and products, and on maintaining accurate demand forecasting to manage inventory.

l Certain finished products, such as pillows, are manufactured on a job-work basis through third-party manufacturers rather than in-house, introducing quality and supply dependency on external parties for part of the product range.

l Conflicts of interest may arise from common business activities undertaken by the Company and its Group Companies.

l The average cost of acquisition of Equity Shares held by the Promoters is disclosed as lower than the Issue Price, a standard disclosure item for offerings at this scale.

Positives to Note

l Profitability accelerated sharply in the most recent fiscal year: PAT nearly doubled from Rs.358.19 Lakhs (FY25) to Rs.865.06 Lakhs (FY26), and EBITDA margin roughly doubled from 5.78% to 11.91% over the same single year.

l RoNW of 40.97% in FY 2026 is well above both disclosed listed peers, Sheela Foam Limited (4.48%) and Wakefit Innovations Limited (22.90%), despite both being dramatically larger, more established companies.

l The Company has been operating cash flow positive in every year of its 3 year disclosed track record, including a particularly strong Rs.1,277.71 Lakhs in FY 2026, indicating that reported profit has been backed by genuine cash generation rather than accounting adjustments.

l Because this is a Fixed Price Issue, the Issue Price, Gross Proceeds and full Net Proceeds allocation are all precisely disclosed with no blank valuation figures remaining, giving investors complete clarity on deal economics ahead of application, unlike the RHPs elsewhere in this series still awaiting price discovery.

l The Company holds ISO 9001:2015 and BIS certification for its manufacturing facility and has built a pan-India dealer network exceeding 1,300 dealers across 13 states, indicating an established, functioning distribution base rather than one still being built out.

l The Company has categorically denied the allegations in the Sheela Foam litigation, has actively participated in 2 rounds of court-ordered mediation, and offers a specific, substantive defence (that 'Feather' is a widely used descriptive term in the industry, citing multiple other registered marks using the word), rather than remaining passive in the face of the claim.

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