Saraswati Saree Depot IPO subscription status: The initial public offering of Saraswati Saree Depot Ltd is off to a positive start with the retail and non-institutional investors portion being fully subscribed amid subdued market conditions. At 15:00 IST, Saraswati Saree Depot IPO subscription status was 3.03 times.
The IPO received bids for 3,03,31,350 shares against 1,00,00,800 shares on offer, according to BSE.
The portion for retail investors attracted 4.04 times subscription while the quota for non-institutional investors (NII) got subscribed 6.87 times. The qualified institutional buyers (QIB) portion has been booked 1.18 times.
Saraswati Saree Depot IPO has reserved not more than 50% of the shares in the public issue for QIB, not less than 15% for NII, and not less than 35% of the offer is reserved for retail investors.
The initial share sale which has opened today (Monday, August 12), has set its price band in the range of ₹152 to ₹160 per equity share of the face value of ₹10 each. The offering, which ends on Wednesday, August 14, allows investors to place bids for up to 90 shares, or multiples of that number.
The company in an advertisement on financial express stated that the price to earnings ratio based on basic and diluted EPS for fiscal 2024 for the company at the floor price is 17.04 times at the cap price is 17.94 times as compared to the average industry peer group P/E ratio of 46.57 times.
As per the red herring prospectus (RHP), the company’s listed peers are Go Fashion (India) Ltd (with a P/E of 71.80 times), and Sai Silks (Kalamandir) Ltd (with a P/E of 21.34 times).
From March 31, 2024, to March 31, 2023, Saraswati Saree Depot Limited’s profit after tax (PAT) climbed by 29% while revenue increased by 2%.
The Kolhapur-based firm was founded in 1966 and first focused on the saree industry. Today, it also sells various women’s clothing items in bulk, including kurtis, dress materials, blouse pieces, lehengas, and bottoms.
The firm has established connections in major cities such as Surat, Varanasi, Mau, Madurai, Dharmavaram, Kolkata, and Bengaluru by sourcing sarees from various producers around India.
Saraswati Saree Depot is run out of two Maharashtra locations: Ulhasnagar and Kolhapur.
Strength and Weakness
| Strength | Weakness |
| They have a highly diversified customer base. In Fiscals 2023 and 2022, their revenues from their top 10 customers represented 8.89% and 7.90%, respectively, of their total revenues. | Their business is highly concentrated on the sale of women’s sarees. Any changes in consumer preferences could have a disruptive effect on the survival of the business. |
| Their raw material sourcing is also highly diversified. In Fiscals 2023 and 2022, their purchases from their top 10 suppliers represented 22.83% and 26.98%, respectively, of their total purchases. | They operate out of two stores in Maharashtra, which are located at Kolhapur and Ulhasnagar. Any local social unrest, natural disaster or breakdown of services could have an adverse effect on their business and financial condition. |
| The saree products offered at their stores are highly diversified in terms of occasion, fabric, weave, pattern and ornamentations. They also have a wide variety of non-saree apparel products. | Their business is subject to seasonality. Lower revenues in the peak season of any fiscal year may adversely affect their overall business for the year. |
Saraswati Saree Depot IPO details
The promoter group’s offer for sale (OFS) of 35 lakh equity shares and a new issue of up to 65 lakh equity shares make up the IPO.
The IPO size is set at ₹160 crore at the upper end of the price range. The firm intends to cover working capital needs and other corporate objectives using the net proceeds from the new issuance. Bigshare Services is the issue registrar, while Unistone Capital is the book running lead manager for the offer.
The shareholders being sold by the promoters are Tejas, Amar, Shevakram, and Sujandas Dulhani, each of whom is offering 700,200 equity shares. 350,100 equity shares each are being sold by Tushar and Nikhil Dulhani.
