Saraswati Saree Depot IPO: Review, valuation, Date & GMP

Saraswati Saree Depot Ltd IPO - Complete Overview

Saraswati Saree Depot IPO a Mainboard IPO is a book-built issue of Rs.160.01 crore by Saraswati Saree Depot Limited that was founded in 1996. The company produces and distributes women's clothing in the wholesale (B2B). The saree market is the company's main business. Besides, it deals in the wholesale of various items of women's clothing, including bottoms, lehengas, kurtis, dress materials, and blouse pieces.

India is the 3rd largest exporter of clothing and textiles worldwide. India's saree industry increased at a 3-4% CAGR from FY 2018 to 2020. By FY 2028, the sector is expected to grow at a CAGR of about 5 to 6%, reaching an estimated value of about Rs.625-Rs.650 billion.

The company frequently purchases sarees and other women's clothing items from over 900 vendors and weavers located in various Indian states. The company currently has over 300,000 distinct SKUs listed in its product catalog. With a focus on Maharashtra, Goa, Karnataka, and Tamil Nadu, the company primarily distributes its goods in the southern and western regions. As of FY 2023, it had served over 15,000 distinct clients. Product categories for sarees, such as occasion, fabric, weaving, and embellishment, are available at the corporate stores. More than 90% of the business's Revenue is generated from the saree sales.

The company plans to launch its IPO on 12 August 2024.

Saraswati Saree Depot IPO Overview

Saraswati Saree Depot IPO of Rs.160.01 crore comprises a fresh issue of 0.65 crore Shares worth Rs.104 crore and an offer for sale (OFS) of 0.35 crore Shares amounting to Rs.56.02 crore out of which 35% is allocated to retail investors, 50% to institutional investors and 15% to non-institutional investors. The IPO will be available to investors on August 12, and conclude on August 14. The anticipated listing date for the IPO is Tuesday, August 20, and it will be held on the BSE and NSE. Saraswati Saree Depot IPO price band is between Rs.152 to Rs.160 for each Share.

If You want to apply for the IPO, Click Here to Open a Demat Account.

 

Company Financial

Saraswati Saree Depot Limited's revenue rose by 1.50%, while profit after tax (PAT) increased by 28.52% during the FYs ending March 31, 2024, and March 31, 2023. 

Below is the synopsis of the company's financial data for the financial year that concluded on 31 March 2024.

• The company’s total revenue is over Rs.6,12.58 crore.

• The net worth of the company is Rs.64.90 crore.

• The company's EBITDA is Rs.41.14 crore.

• The total assets of the company are Rs.2,05.93 crore.
  
  

(Amount in Crore)

Period	31 Mar 2024	31 Mar 2023	31 Mar 2022
Total Assets	205.93	188.85	169.93
Total Revenue	612.58	603.52	550.31
PAT	29.52	22.97	12.31
Net worth	64.90	35.38	12.41
Total borrowings	43.48	41.43	66.62

 

 

Revenue Bifurcation

Below is the revenue breakdown for various activities.

(Amount in crore)

Net Cash flow in various Activities	31 Mar 2024	31 Mar 2023	31 Mar 2022
Net Cash Flow Operating Activities	-8.54	35.19	-41.21
Net Cash Flow Investing Activities	-0.23	-4.37	-3.78
Net Cash Flow Financing Activities	-0.40	-29.00	62.12

 

Store-wise Revenue Bifurcation For The Last Three Fiscals

(Values in %)

Segment	FY 2024	FY 2023	FY 2022
Kolhapur	88.32	87.31	86.28
Ulhasnagar	11.68	12.69	13.72

Product-wise Revenue Bifurcation For The Last Three Fiscals

(Values in millions)

Product	FY 2024	FY 2023	FY 2022
Sarees	5,550.05	5,533.60	5,001.34
Kurtis	321.61	241.03	264.09
Blouse Pieces	93.97	81.36	72.32
Pant & Shirt Pieces	68.47	67.61	60.88
Others	74.95	95.32	97.13

 

The Objective of The Issue

The company desires to use the Net Proceeds from the Issue to fulfill its following goals:

• Working capital needs.

• General Corporate Purposes.
  
  

Peers of Saraswati Saree Depot Limited

Company Name	Face Value (Rs.)	EPS (Rs.)	P/E (x)
Go Fashion (India) Ltd	10	15.32	71.80
Sai Silks (Kalamandir) Limited	10	7.51	21.34

 

Evaluation

The price of this Saraswati Saree Depot IPO is Rs.152 to Rs.160 for each Share.

Evaluation of P/E Ratio

Considering the FY 2024, with an EPS of Rs.8.92 from the last year, the resulting P/E ratio is 17.93x.

Considering the weighted EPS of Rs.7.39 for the last three years, the P/E ratio is 21.65x.

Comparative Analysis with Listed Peers

The average P/E Ratio of the industry is 46.57x.

Particulars	P/E Ratio (x)
Highest	71.80
Lowest	21.34
Average	46.57

In simple words, the P/E ratio of Saraswati Saree Depot IPO (17.93x and 21.65x), compared with the industry’s average P/E of 46.57x, has an undervaluation. Hence the price of the Share seems fairly priced for the investors when considered based on the average P/E ratio of the industry.

 

Detailed Video

 

IPO's Strengths 

• Varied client and supplier base.

• A wide range of products.

• Capability to purchase in bulk.

• Knowledgeable managers and promoters.

• Current connections with suppliers and clients.

• A cooperative and knowledgeable workforce.

 

IPO’s Weaknesses

• The company is mostly focused on selling women's sarees, thus changes in the market could have an impact on it. Any change in customer preferences could harm its operations, financial situation, and business.

• The company runs its business out of two locations in Kolhapur and Ulhasnagar, Maharashtra. Any local social disturbance, natural disaster, service outage, or other natural disaster in Maharashtra or its surrounding areas, together with any production disruption or store closure, might have a substantial negative impact on the company and financial situation.

• The company's wholesale business means that they don't have direct access and visibility with the end users of their products, which could harm its capacity to produce end-user awareness and brand loyalty.

• In each of the product categories, there are numerous smaller, unorganized competitors operating standalone store markets in a highly competitive and divided industry. If the company is unable to effectively compete, it could harm its business.

• The seasons affect the business. Reduced sales during the fiscal year's holiday season could harm the company's operations, finances, and prospects.

 

IPO GMP Today

The most recent GMP for Saraswati Saree Depot's IPO is Rs.40.

Saraswati Saree Depot IPO timetable (Tentative)

The IPO is scheduled from August 12 to August 14, 2024, with allotment on August 16, 2024,  refund initiation on August 19, 2024, and listing on August 20, 2024.

Events	Date
IPO Opening Date	August 12, 2024
IPO Closing Date	August 14, 2024
IPO Allotment Date	August 16, 2024
Refund Initiation	August 19, 2024
IPO Listing Date	August 20, 2024

 

Saraswati Saree Depot IPO Details 

The IPO with a face value of Rs.10 per Share is set to start on August 12, 2024, close on August 14, 2024, and offers a total issue size of 10,000,800 Shares at Rs.152 to Rs.160 per Share with a Lot size of 90 Shares and will be listed at BSE and NSE.

IPO Opening & Closing Date	August 12, 2024 to August 14, 2024
Face Value	Rs.10 per Share
Issue Price	Rs.152 to Rs.160
Lot Size	90 Shares
Issue Size	10,000,800 Shares (aggregating up to Rs.160.01 crores).
Offer for Sale	3,501,000 Shares (aggregating up to Rs.56.02 crores).
Fresh Issue	6,499,800 Shares (aggregating up to Rs.104.00 crores)
Listing at	BSE, NSE
Issue Type	Book Built Issue IPO
Registrar	Bigshare Services Pvt Ltd

 

 

Saraswati Saree Depot IPO Lot Details 

The IPO allows retail investors to invest in a minimum and maximum of 1 Lot (90 Shares) amounting to Rs.14,400, and 13 Lots (1170 Shares) amounting to Rs.187,200 respectively, while for HNI investors, the minimum Lot is 14 (1,260 Shares) amounting to Rs.201,600.

Minimum Lot Investment (Retail)	1 Lot
Maximum Lot Investment (Retail)	13 Lots
S-HNI (Min)	14 Lots
S-HNI (Max)	69 Lots
B-HNI (Min)	70 Lots

Saraswati Saree Depot IPO Reservation

Institutional Share Portion	50%
Retail Investors Share Portion	35%
Non Institutional Shares Portion	15%

 

 

Promoters and Management of Saraswati Saree Depot Limited 

• Mr. Shankar Dulhani

• Mr. Mahesh Dulhani

• Mr. Rajesh Dulhani

• Mr. Vinod Dulhani
  
  

Saraswati Saree Depot IPO Lead Managers

• Unistone Capital Pvt Ltd

 

Dividend Policy

The company has not paid any dividend in the last 3 Fiscals.

 

Conclusion

The company has experienced negative cash flow in operating, investing activities, and financing activities in the last few fiscal years. To fulfill its objectives, the company is currently conducting an IPO for the public.

We believe the information offered in this blog helps you learn about the company's financial performance. So this blog will be very useful to you if you are looking for information about the approaching IPO since it will give you reliable information about the company's, insights, financials, and past performance. If this informative blog piques your interest, you may be interested in reading our other related and useful posts on our website.

Finowings IPO Analysis

Hope you enjoyed the Finowings IPO Analysis. We tried our best to give every required detail about the company that you should know before applying to the IPO. 

You must consult your financial advisor before making any financial decisions. 

To Apply for the IPO, Click Here.

To Read the Prospectus of the Company Click Here to Download the DRHP.

Disclaimer: This IPO analysis is only for informational purposes and should not be considered as investment advice. Always do your research and consult with a financial advisor.

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