Shreedhar Spinners IPO (23-25 June) Analysis

NSE Emerge SME Platform  |  100% Book Built Fresh Issue (RHP Stage)

Based on Red Herring Prospectus dated June 10, 2026  |  Compact Spun Cotton Yarn Manufacturer  |  Amravati, Maharashtra

STATUS: RHP FILED  |  Fresh Issue: up to 57,88,000 Equity Shares  |  No OFS  |  Bidding Opens June 23, 2026, Closes June 25, 2026  |  NSE Emerge SME Platform  |  Mumbai, Maharashtra

 Shreedhar Spinners Limited (SSL) is a Maharashtra-based manufacturer of compact spun cotton yarn, operating from a single manufacturing facility at Tuljapur, Amravati, Maharashtra. This Red Herring Prospectus (RHP), dated June 10, 2026, updates and supersedes the DRHP previously filed, and incorporates a full additional fiscal year of audited results (Fiscal 2026, year ended March 31, 2026) along with several material developments not present in the earlier draft.

The company's registered office is at 503, Matharu Arcade, Subhash Road, Vile Parle East, Mumbai 400 057, Maharashtra. Its website is www.shreedharspinners.com. Its Corporate Identity Number is U17299MH2020PLC351591.

The single most significant operational update in this RHP is a major capacity expansion: installed spindle capacity increased from 18,240 spindles to 28,608 spindles in January 2026, a 56.8% increase. This expansion had not occurred, nor was it disclosed, in the DRHP analysed previously, which referenced only the original 18,240-spindle base operating near its 98% utilization ceiling.

With the expanded capacity now in place, Fiscal 2026 capacity utilization was reported at 95%, with actual production rising to 6,013 MT against an average estimated annual capacity of 6,350 MT, up from 5,511 MT in Fiscal 2025. This expansion directly addresses the capacity ceiling risk flagged in the DRHP and represents a substantive change to the company's growth trajectory and the rationale for IPO proceeds.

Promoter group has expanded: the RHP discloses six promoters, Shreedhar Cotsyn Private Limited (corporate promoter), Dharmendra Mohandas Goyal, Vishal Agarwal, Sunita Dharmendra Goyal, Pooja Agarwal, and Varesh Goyal, an expansion from the four promoters (Shreedhar Cotsyn Private Limited, Dharmendra Mohandas Goyal, Vishal Agarwal, and Varesh Goyal) disclosed at the DRHP stage.

The addition of Sunita Dharmendra Goyal and Pooja Agarwal as named promoters reflects either a broader formal recognition of the existing family ownership group or a restructuring of promoter classification ahead of listing.

A material new disclosure in this RHP, absent from the DRHP, is a significant share pledge: 76,50,000 Equity Shares, constituting 48.88% of the Company's pre-Issue equity share capital on a fully diluted basis, held by the corporate promoter Shreedhar Cotsyn Private Limited, are pledged in favour of SBICAP Trustee Company Limited pursuant to share pledge agreements dated January 27, 2022 and a first supplemental pledge agreement dated November 17, 2025.

This means close to half of the promoter's pre-Issue shareholding is encumbered as security for the company's financing arrangements, a substantial and previously undisclosed risk factor that materially changes the governance and control risk profile of this investment.

Statutory and KPI certification: the RHP confirms KPI certification by M R B & Associates (Chartered Accountants) by certificate dated June 10, 2026, and notes that the Audit Committee has confirmed no KPIs were selectively disclosed to any investor in the three years preceding this filing, a standard SEBI ICDR governance disclosure.

Key Basics (RHP Stage)

This remains a 100% Fresh Issue with no Offer for Sale component, listing on the NSE Emerge SME platform. The Issue size at the RHP stage is confirmed at up to 57,88,000 Equity Shares, marginally down from the DRHP's 58,00,000 shares. The Price Band and minimum Bid Lot remain undetermined as of this RHP and will be advertised closer to the Bid/Issue Opening Date, in line with standard book-built issue practice, though bidding dates are now confirmed.

Document Type	Red Herring Prospectus (RHP) dated June 10, 2026. Bidding dates confirmed; Price Band to be announced before the Bid/Issue Opening Date.
Issue Type	100% Book Built Fresh Issue of up to 57,88,000 Equity Shares of face value Rs.10 each. No OFS. Company receives full net proceeds after issue expenses. Subject to finalisation of basis of allotment.
Face Value	Rs.10 per Equity Share
Listing Platform	NSE Emerge (SME platform of NSE), under Chapter IX of SEBI ICDR Regulations, 2018. In-principle approval received from NSE dated March 17, 2026. Designated Stock Exchange: NSE Emerge.
Promoters	Shreedhar Cotsyn Private Limited, Dharmendra Mohandas Goyal, Vishal Agarwal, Sunita Dharmendra Goyal, Pooja Agarwal, and Varesh Goyal. An expanded promoter group of six versus four at the DRHP stage.
Promoter Share Pledge	76,50,000 Equity Shares (48.88% of pre-Issue capital), held by Shreedhar Cotsyn Private Limited, are pledged in favour of SBICAP Trustee Company Limited as loan security. This is a new and material disclosure absent from the DRHP.
Market Maker	3,86,000 Equity Shares of the Public Issue are reserved for subscription by the Market Maker, as mandated for NSE Emerge SME IPOs.
BRLM	Marwadi Chandarana Intermediaries Brokers Private Limited (sole Book Running Lead Manager).
Registrar	MUFG Intime India Private Limited (formerly Link Intime India Private Limited). Contact: Shanti Gopalkrishnan.
Anchor Bidding	Monday, June 22, 2026 (one Working Day prior to Bid/Issue Opening Date, subject to participation by Anchor Investors).
Bid/Issue Opens	Tuesday, June 23, 2026.
Bid/Issue Closes	Thursday, June 25, 2026. QIB bidding may close one Working Day earlier at the Company's discretion in consultation with the BRLM.
Listed Industry Peers	AB Cotspin India Limited and Siddhi Cotspin Limited, both formally disclosed as comparable listed industry peers in this RHP, a disclosure not present in the DRHP, which stated no peer comparison was yet available.

 The Net Proceeds deployment plan is essentially unchanged from the DRHP, with only minor figure revisions, confirming the use-of-proceeds rationale remains stable through to the RHP stage.

Object	Amount (Rs. Lakhs)	Details
Funding Incremental Working Capital	2,103.60	To fund working capital requirements for Fiscal 2027 and Fiscal 2028. As of April 30, 2026, the company held a fund and non-fund based working capital loan sanctioned amount of Rs.2,775.00 lakhs, against which Rs.2,044.63 lakhs was outstanding. Marginally revised from the DRHP's Rs.2,103.52 lakhs.
Purchase of Machineries at Amravati Facility	494.77	Capital expenditure for additional spinning machinery, automation systems, and related equipment at the existing manufacturing facility. Revised modestly from the DRHP's Rs.472.88 lakhs.
General Corporate Purposes	[TBD]	Capped at the lower of 15% of Gross Proceeds or Rs.10 crore (Rs.1,000 lakhs), unchanged from the DRHP-stage cap structure, per SEBI ICDR Regulations for SME issuers.
Issue Related Expenses	[TBD]	BRLM fees, registrar fees, legal fees, printing, advertising, and listing fees. To be finalised upon determination of the Issue Price.
TOTAL FRESH ISSUE (up to 57,88,000 shares)	[TBD]	100% Fresh Issue. No OFS. Total amount depends on the finalised Issue Price within the Price Band.

The use-of-proceeds rationale is stronger at this stage given the company has already executed a major capacity expansion (18,240 to 28,608 spindles) ahead of the IPO, financed presumably through the elevated debt levels discussed below. The Rs.494.77 lakh machinery allocation from IPO proceeds may represent a further incremental expansion or completion of the recently commissioned capacity, though the RHP does not explicitly clarify whether this spending is distinct from or related to the spindle expansion already completed in January 2026.

Financial Performance

Note: All figures in Rs. lakhs unless stated. This RHP presents full audited results for Fiscal 2026 (year ended March 31, 2026), Fiscal 2025, and Fiscal 2024, a meaningful upgrade in disclosure quality compared to the DRHP, which presented only a six-month stub period (H1 FY2026) as its most recent data point. Restated Financial Statements. The full-year FY2026 results reveal both stronger absolute profitability and a substantially more leveraged balance sheet than the DRHP-stage figures suggested.

Revenue, EBITDA, and Profitability

Metric	FY2026 (Rs. L)	FY2025 (Rs. L)	FY2024 (Rs. L)
Revenue from Operations	14,637.10	13,426.66	12,613.85
Revenue Growth % YoY	+9.02%	+6.44%	N/A
Other Income	17.81	15.94	21.31
Total Income	14,654.91	13,442.60	12,635.16
Cost of Materials Consumed	11,415.48	10,552.41	10,193.11
Employee Benefit Expenses	611.57	528.66	464.25
Finance Costs	648.53	584.73	640.17
Depreciation and Amortisation	400.64	337.24	331.26
Other Expenses	1,233.83	1,063.31	853.45
Total Expenses	13,907.75	13,029.89	12,230.08
Profit Before Tax	747.16	412.71	405.08
Tax Expense	130.02	71.18	69.88
Profit After Tax (Restated)	617.14	341.53	335.20
PAT Growth % YoY	+80.71%	+1.89%	N/A
EBITDA	1,761.65	1,310.50	1,340.91
EBITDA Margin %	12.04%	9.76%	10.63%
PAT Margin %	4.22%	2.54%	2.66%
Return on Equity %	24.64%	18.33%	21.99%
Return on Capital Employed %	9.34%	N/A	N/A
RoNW % (Weighted Average: 19.27%)	20.74%	16.79%	19.81%
Basic and Diluted EPS (Rs.)	4.03	2.28	2.23
Net Asset Value per Share (Rs.)	19.01	13.56	11.28
Working Capital Days	46	26	29
Inventory Turnover Ratio (times)	4.76	6.26	7.48
Debt to Equity Ratio (times)	3.89	3.21	3.67
Return on Assets %	3.59%	3.34%	3.63%

Fiscal 2026 shows a marked improvement in profitability relative to the DRHP-stage trajectory. Revenue grew 9.02% to Rs.14,637.10 lakhs, an acceleration from the 6.44% growth seen in Fiscal 2025, consistent with the benefit of the expanded 28,608-spindle capacity coming online during the year.

EBITDA margin expanded meaningfully from 9.76% (FY2025) to 12.04% (FY2026), and PAT surged 80.71% year-on-year to Rs.617.14 lakhs, the strongest absolute profit the company has reported. Basic and Diluted EPS nearly doubled from Rs.2.28 to Rs.4.03. RoNW improved to 20.74% (FY2026) from 16.79% (FY2025), with a weighted average RoNW of 19.27% across the three years presented.

However, the most important figure in this updated financial picture is the Debt to Equity Ratio, which stood at 3.89x in Fiscal 2026, up from 3.21x in Fiscal 2025, and remains elevated relative to 3.67x in Fiscal 2024. As of April 30, 2026, total outstanding indebtedness stood at Rs.11,637.79 lakhs, comprising both secured and unsecured borrowings.

This level of leverage, nearly four times the company's equity base, is a structurally significant risk that was understated in the DRHP, which only disclosed H1 FY2026 data without the benefit of full-year context or the more recent April 2026 indebtedness figure. Working capital days also rose sharply from 26 days (FY2025) to 46 days (FY2026), and the inventory turnover ratio declined from 6.26 times to 4.76 times, both indicating a slower-moving, more capital-intensive working capital cycle that aligns with the recent capacity expansion.

Balance Sheet

Balance Sheet Item	FY2026 (Rs. L)	FY2025 (Rs. L)	FY2024 (Rs. L)
Equity Share Capital	1,565.00	1,500.00	1,500.00
Reserves and Surplus	1,410.69	533.55	192.02
Net Worth / Shareholders' Funds	2,975.69	2,033.55	1,692.02
Long-Term Borrowings	8,808.16	4,890.48	4,772.07
Total Non-Current Liabilities	9,047.67	5,017.00	4,823.87
Trade Receivables (approx.)	1,621.20	1,175.11	905.50
Total Assets / Total Equity and Liabilities	17,211.97	10,231.57	9,227.88

Net worth grew strongly from Rs.1,692.02 lakhs (FY2024) to Rs.2,975.69 lakhs (FY2026), a 75.9% increase over two years, driven by retained profits and the Reserves and Surplus line growing from Rs.192.02 lakhs to Rs.1,410.69 lakhs. However, Long-Term Borrowings grew even faster in absolute terms, from Rs.4,772.07 lakhs (FY2024) to Rs.8,808.16 lakhs (FY2026), an 84.6% increase, which explains the worsening debt-to-equity ratio despite genuine equity growth.

Total Assets nearly doubled from Rs.9,227.88 lakhs (FY2024) to Rs.17,211.97 lakhs (FY2026), reflecting the scale of the capacity expansion investment, financed predominantly through debt rather than equity, which is consistent with the elevated leverage ratios discussed above.

Listed Peer Comparison: New Disclosure in This RHP

Unlike the DRHP, which stated no listed industry peer comparison was available, this RHP formally discloses two listed comparable companies: AB Cotspin India Limited and Siddhi Cotspin Limited, both standalone cotton yarn spinning businesses, with financial data as of their respective latest available financial statements for Fiscal 2026.

Metric	SSL (FY2026)	AB Cotspin India	Siddhi Cotspin	Notes
Total Revenue (Rs. Lakhs)	14,654.91	30,145.70	47,827.11	Both peers larger by revenue
Face Value (Rs.)	10	10	10
Profit After Tax (Rs. Lakhs)	617.14	1,326.12	964.08	SSL PAT smallest of the three
EPS, Basic and Diluted (Rs.)	4.03	33.69	6.39	AB Cotspin notably higher EPS
P/E Ratio	(Issue Price basis)	6.06x	4.38x	Both peers trade at low single-digit P/E
RoNW %	20.74%	8.65%	7.08%	SSL has the highest RoNW of the three
NAV per Share (Rs.)	19.01	69.15	55.82	Both peers have meaningfully higher NAV

This peer comparison is a meaningful new data point for valuation. SSL's Return on Net Worth of 20.74% in Fiscal 2026 substantially exceeds both AB Cotspin India (8.65%) and Siddhi Cotspin (7.08%), suggesting SSL generates superior returns on its equity base despite being the smallest of the three by revenue.

However, both listed peers trade at very modest P/E multiples of 6.06x and 4.38x respectively, reflecting the broader market's generally low valuation of cotton yarn spinning businesses given the sector's commodity-linked, thin-margin characteristics.

If SSL prices its Issue at a comparable multiple to its listed peers, applying a P/E range of 4.38x to 6.06x to the Fiscal 2026 EPS of Rs.4.03 would imply an indicative price range of approximately Rs.17.6 to Rs.24.4 per share, though the company and BRLM retain full discretion in setting the actual Price Band, and SSL's superior RoNW could justify a premium to this peer range.

Key Risks: Updated and New Disclosures in This RHP

l  Nearly half of promoter shareholding is pledged as loan security: 76,50,000 Equity Shares, representing 48.88% of the Company's pre-Issue equity share capital on a fully diluted basis and held by the corporate promoter Shreedhar Cotsyn Private Limited, are pledged in favour of SBICAP Trustee Company Limited pursuant to pledge agreements dated January 27, 2022 and November 17, 2025.

This disclosure did not appear in the DRHP analysed previously. In the event of default or non-compliance with financing terms, the lender may invoke the pledge and dispose of these shares, which could materially alter the shareholding pattern, dilute promoter control, and adversely affect the market price of the Equity Shares post-listing. This is now one of the most significant governance and control risks for prospective investors to weigh.

l  Debt-to-equity ratio of 3.89x in Fiscal 2026, the highest across the three years presented, with total outstanding indebtedness of Rs.11,637.79 lakhs as of April 30, 2026: this is a substantially elevated leverage position for a company of this size, nearly four times its equity base.

Financing agreements contain restrictive covenants requiring prior lender approval for matters including changes to the Board or management, and promoters have extended personal guarantees on certain financing arrangements that may not continue after the Offer is completed. Combined with the share pledge disclosure above, this paints a meaningfully more leveraged and encumbered financial picture than the DRHP-stage data suggested.

l  Sharp spike in employee attrition rate to 55.89% in Fiscal 2026, up from 30.77% (FY2025) and 22.97% (FY2024): this dramatic increase in staff turnover, more than doubling over two years, raises questions about workplace stability, potential wage pressure, and operational continuity risk, particularly as the company simultaneously ramped up a major capacity expansion requiring stable, experienced personnel.

High attrition during a period of operational scaling is a meaningful execution risk that was not evident in the DRHP-stage disclosures.

l  Working capital cycle has lengthened materially: working capital days increased from 26 days (FY2025) to 46 days (FY2026), and the inventory turnover ratio declined from 6.26 times to 4.76 times over the same period.

This slower working capital cycle, occurring precisely as the company scaled up production on its newly expanded capacity, increases the funding burden on the business and is a direct contributor to the rising debt levels discussed above, reinforcing the importance of the Rs.2,103.60 lakh working capital allocation from IPO proceeds.

l  Single manufacturing facility risk persists despite capacity expansion: the spindle expansion from 18,240 to 28,608 occurred at the same Amravati facility, meaning the company's entire production base, now larger and more capital-intensive than before, remains concentrated at one site. Any disruption, fire, or operational failure at this single facility carries even greater financial consequence now given the larger asset base and elevated debt levels.

l  Customer, geographic, and supplier concentration risks from the DRHP remain materially unchanged and are not separately re-quantified with updated Fiscal 2026 figures in the extracted sections reviewed, meaning investors should refer to the full RHP risk factors section for current period concentration percentages before forming a final view.

l  Limited operating history remains a consideration, now extended through a fourth fiscal year (FY2026) of commercial operations since the November 2022 production start, providing a somewhat longer track record than at the DRHP stage but still a relatively young manufacturing operation by listed-company standards.

Positives to Note: Strengthened Since the DRHP

l  Major capacity expansion already executed and delivering results: the spindle base grew 56.8% from 18,240 to 28,608 in January 2026, and Fiscal 2026 results already reflect the benefit, with production rising to 6,013 MT (95% utilization on the expanded base) and revenue growth accelerating to 9.02%. This is a substantively de-risked growth story compared to the DRHP stage, where the capacity ceiling was a live constraint; the company has since acted on it.

l  PAT grew 80.71% year-on-year in Fiscal 2026, with EPS nearly doubling from Rs.2.28 to Rs.4.03: this is a materially stronger profitability outcome than the DRHP-stage trajectory implied, with EBITDA margin expanding from 9.76% to 12.04% and RoNW improving to 20.74%, the highest of the three years presented and notably superior to both disclosed listed peers.

l  New listed peer disclosure shows SSL's RoNW of 20.74% substantially exceeds both AB Cotspin India (8.65%) and Siddhi Cotspin (7.08%): despite being the smallest of the three companies by revenue, SSL is generating superior returns on shareholder equity, a genuinely favourable comparative data point that was not available for investor assessment at the DRHP stage.

l  Confirmed bidding timeline provides execution certainty: with Anchor Investor bidding on June 22, 2026 and the public Bid/Issue Period running June 23 to June 25, 2026, this Issue has progressed substantially from the DRHP stage toward an actual, near-term listing event, reducing the process and timing uncertainty that characterised the earlier draft filing.

l  Net worth nearly doubled from Rs.1,692.02 lakhs (FY2024) to Rs.2,975.69 lakhs (FY2026), demonstrating that despite the elevated leverage, the company is also building a genuinely larger equity base through retained earnings, which should continue to improve the debt-to-equity trajectory if Fiscal 2026's profitability levels are sustained or improved in Fiscal 2027.

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