About NAPS Global India Limited

Business Overview

NAPS Global India Limited, incorporated in March 2014, is engaged in the import and wholesale distribution of textiles and garments. The company has positioned itself as a key supplier to garment manufacturers in Maharashtra and other states across India. Operating primarily in a business-to-business (B2B) model, the company procures high-quality fabrics and garments from established suppliers in China and Hong Kong and supplies them to manufacturers and wholesalers in India.

Core Operations and Product Portfolio

The company's operations revolve around two major segments:

1. Fabrics:
   • Cotton fabrics
   • Super-soft velvet fabrics
   • Knitted fabrics
   • Man-made fabrics
   • Linen fabrics
2. Garments:
   • Women’s tops
   • Men’s shirts & t-shirts
   • Kids’ jeans

The company leverages strong supplier networks and market insights to offer trendy designs and color combinations to its customers, ensuring high demand and repeat business.

Market Presence and Supplier Network

• Supplier Base: The company has well-established supply channels in China and Hong Kong, ensuring reliable and cost-effective procurement.
• Customer Base: It primarily caters to garment manufacturers and wholesalers in major Indian textile hubs, including Maharashtra, Gujarat, Karnataka, Punjab, and Madhya Pradesh.
• Operational Strength: The company operates on a just-in-time inventory model, reducing warehousing costs and improving capital efficiency.

As of August 31, 2024, the company had 10 employees. The Bankers to the Company is AXIS BANK LIMITED and YES BANK LIMITED.

Industry Analysis

Global Textile Market

• Market Size: The global textile industry was valued at USD 1,837.27 billion in 2023 and is expected to grow at a CAGR of 7.4% through 2030.
• Key Drivers:
  • Increasing demand for fast fashion and apparel.
  • Growth in technical textiles (used in automobiles, healthcare, and infrastructure).
  • Rising focus on sustainable and eco-friendly textiles.
• Top Global Players: Inditex (Zara), H&M, VF Corporation, China National Textile Corporation.

Indian Textile and Apparel Market

• Contribution to GDP: The Indian textile industry contributes 2.3% to the GDP, 13% to industrial production, and 12% to total exports.
• Projected Growth: The industry is expected to reach USD 350 billion by 2030, with exports projected to touch USD 100 billion.
• Dominant Segments:
  • Man-made textiles lead the imports sector with a 34% market share, valued at $1,859 million.
  • Growth in technical textiles and home furnishings.

Government Policies and Incentives

• Production-Linked Incentive (PLI) Scheme – Encourages investments in textile manufacturing.
• Mega Integrated Textile Region & Apparel (MITRA) Park Scheme – Focuses on building large textile clusters.
• Scheme for Integrated Textile Parks (SITP) – Supports textile infrastructure development.

Competitive Landscape in India

• Major Competitors: Vardhman Textiles, Welspun India, Arvind Ltd., Raymond, Bombay Rayon Fashions Ltd.
• Market Share: The top 5 players hold 35% of the market, while the rest is shared among mid-sized and small textile firms.

Business Strengths

1. Experienced Leadership

• Promoters:
  • Pankaj Jain (Chairman & MD) – Over a decade of experience in garment and textile trading.
  • Ronak Mistry (Whole-time Director & CFO) – Expertise in financial management and business expansion.

2. Strong Financial Growth

• Revenue CAGR: 88.30% growth from ₹1,334.40 lakh (FY 2022) to ₹4,731.29 lakh (FY 2024).
• Profit CAGR: 182.02% increase from ₹18.26 lakh (FY 2022) to ₹145.22 lakh (FY 2024).

3. Supplier and Customer Network

• 98.83% of raw materials are sourced from top 10 suppliers in China, ensuring consistent quality and supply.
• 50.84% of revenue comes from the top 5 customers, showing strong business relationships.

4. Expansion into High-Margin Garment Business

• Transitioning to readymade garments, which offer higher profit margins than fabrics.
• Outsourcing model for manufacturing, reducing capital investment while maximizing returns.

Business Strategies

1. Increasing Working Capital for Expansion

• Enhancing inventory holding to 1-2 months to improve order fulfillment.
• Optimizing supply chain efficiency by negotiating better rates with suppliers and reducing credit periods.

2. Geographic Expansion

• Expanding reach beyond Maharashtra to other high-growth states.
• Maharashtra’s revenue contribution dropped from 95.48% (FY 2023) to 72.27% (FY 2024), indicating successful diversification.

3. Forward Integration into Garment Manufacturing

• Moving into the readymade garment business using an outsourcing model, ensuring higher margins and reduced risk.

4. Digital and E-Commerce Expansion

• Strengthening online presence and digital marketing to expand market reach.

Risk Factors and Concerns

1. High Supplier Concentration Risk

• 98.83% of purchases depend on top 10 suppliers, making the company vulnerable to supply chain disruptions.

2. Revenue Concentration Risk

• 50.84% of revenue comes from top 5 customers, posing a financial risk if customer demand fluctuates.

3. Working Capital and Liquidity Management

• Significant capital tied up in receivables and inventory, affecting cash flow and operational efficiency.

4. Market Competition and Pricing Pressure

• The textile industry has low entry barriers, leading to intense price competition and margin pressures.

5. Regulatory and Economic Risks

• Changes in government policies, import/export regulations, and currency fluctuations could impact business operations.

NAPS Global India Limited is strategically positioned as a leading textile importer and garment supplier in India. With a strong financial foundation, expanding customer base, and forward integration into garment manufacturing, the company aims to leverage high-growth opportunities in the Indian and global textile markets. However, supplier dependency, working capital management, and competitive pricing remain key challenges. The IPO proceeds will play a crucial role in strengthening the company’s financial position and supporting its expansion strategies.