Cedaar Textile Limited, a company focused on sustainable textile manufacturing, is currently in the process of raising ₹60.90 crores through its NSE SME IPO. The company is known for offering an extensive portfolio of eco-friendly yarns, including Melange Yarns, Solid Top Dyed Yarns, and Grey Fancy Yarns, using recycled and organic fibres like cotton and polyester.

The IPO opened on June 30, 2025, and is scheduled to close on July 2, 2025. Despite Cedaar Textile's commitment to sustainability and growth, investor interest remains muted, as reflected by the Day 2 subscription status of just 0.15x.

IPO Structure and Pricing

The Cedaar Textile IPO is a Book Built Issue consisting entirely of a fresh issue of 43.50 lakh equity shares, aggregating to ₹60.90 crores at the upper price band of ₹140. The price band has been fixed at ₹130–₹140 per share, with a lot size of 1,000 shares. The minimum investment for retail investors stands at ₹1,40,000, while HNIs need to invest ₹2,80,000 or more.

At the upper band of ₹140, the market capitalisation of Cedaar Textile will be approximately ₹194.30 crores. The IPO is managed by FAST TRACK FINSEC PRIVATE LIMITED, with SKYLINE FINANCIAL SERVICES PRIVATE LIMITED acting as the registrar. NNM Securities Private Limited is the market maker.

Anchor Investor Participation

Before the IPO opened to the public, Cedaar Textile secured ₹10.94 crores from Anchor Investors at ₹140 per share. The company allocated 7,82,000 equity shares to anchor investors, ensuring early capital inflow and confidence from institutional players.

Subscription Status and Grey Market Sentiment

As of 11:00 AM on July 1, 2025, Cedaar Textile IPO was subscribed only 0.15 times, which is a significantly low figure. Such slow traction suggests investor hesitation, despite a reasonable valuation and steady financials.

Additionally, the Grey Market Premium (GMP) is currently ₹0, suggesting no expected premium on listing. This highlights weak sentiment in the unregulated market, possibly due to subdued demand or market volatility.

GMP Trend Table

Allotment and Listing Dates

The IPO allotment is expected to be finalized on July 3, 2025 (Thursday), and shares will be listed on the NSE SME platform on or around July 7, 2025. Investors can check their allotment status on the registrar’s website using their PAN, application number, or DP ID.

Use of IPO Proceeds

The funds raised through the IPO will be utilized as follows:

1. ₹800.00 lakhs for installing a Grid-tied Solar PV Rooftop System to reduce electricity costs and promote green energy.

2. ₹1,700.00 lakhs for modernizing machinery to enhance efficiency and production capacity.

3. ₹2,490.00 lakhs to meet working capital requirements, reflecting expansion-driven capital needs.

4. Remaining funds for general corporate purposes and issue expenses.

Business Overview

Cedaar Textile specializes in offering a diverse product mix of eco-conscious yarns such as:

• Raw white yarns

• Melange yarns

• Top dyed yarns

• Grey fancy yarns

These products cater to a wide spectrum of clients in both domestic and international markets. Their emphasis on sustainable and environmentally conscious production aligns with global trends in responsible manufacturing.

Promoters and Leadership

The company is spearheaded by two industry veterans:

• Mr. Rajesh Mittal – 28 years of experience

• Mr. Virender Goyal – 33 years of experience

Their leadership has driven Cedaar Textile's growth trajectory, innovation, and market presence.

Financial Performance Snapshot

The company’s financials over the past few years show steady growth, though with a few fluctuations:

• Revenue from Operations:

  • FY2022: ₹22,043.72 lakh

  • FY2023: ₹16,187.94 lakh

  • FY2024: ₹19,101.24 lakh

  • 9M FY25 (Dec 31, 2024): ₹11,390.67 lakh

• EBITDA:

  • FY2022: ₹1,829.30 lakh

  • FY2023: ₹1,726.39 lakh

  • FY2024: ₹2,952.39 lakh

  • 9M FY25: ₹2,208.57 lakh

• Profit After Tax (PAT):

  • FY2022: ₹798.63 lakh

  • FY2023: ₹458.94 lakh

  • FY2024: ₹1,105.05 lakh

  • 9M FY25: ₹706.18 lakh

Despite a dip in FY23, Cedaar Textile recovered strongly in FY24, with significant improvement in EBITDA and PAT margins.

Valuation Metrics and Industry Comparison

The valuation ratios suggest a fairly priced IPO:

• Pre-issue EPS (FY24): ₹14.73

• Post-issue EPS (FY24): ₹7.96

• Pre-issue P/E Ratio: 9.50x

• Post-issue P/E Ratio: 17.58x

• Industry P/E Ratio: ~20.00x

• Annualized EPS: ₹6.78

• Annualized P/E: 20.64x

• ROCE (FY24): 26.90%

• ROE and RoNW (FY24): 56.06%

While profitability and return metrics are strong, the lack of demand in the primary and grey markets raises red flags.

Expert Review: Should You Invest?

Despite strong financials and experienced leadership, the low subscription rate and zero GMP indicate muted market sentiment. Key concerns for investors include:

• Low interest from retail and institutional investors

• Absence of listing premium

• Medium-risk profile in a highly competitive textile sector

• Possible overpricing when compared to demand outlook

For conservative investors, this IPO may not present an attractive listing gain opportunity. The lack of market traction indicates the possibility of either a flat or discounted listing.

Recommendation: Investors are advised to Avoid the Cedaar Textile IPO if aiming for short-term gains. Long-term investors may review again post-listing, depending on market performance and quarterly earnings.

Conclusion

The Cedaar Textile IPO, though built on a foundation of sustainability, modern textile offerings, and robust return ratios, is facing challenges in attracting investors. With minimal grey market activity, and a lukewarm subscription, the IPO lacks the momentum generally associated with a high-potential SME listing.

While the company’s financials and valuations appear solid, the lack of investor confidence is a critical factor. For now, the IPO is best avoided, with the possibility of reconsideration post-listing, based on stock performance and earnings delivery.

Disclaimer:
This IPO review is for educational and informational purposes only. It should not be construed as financial advice or a recommendation to invest. All investments in securities markets are subject to market risks. Please consult with a certified financial advisor before making any investment decisions.

The Upcoming IPOs in this week and coming weeks are Anthem Biosciences, Chemkart India, Meta Infotech, Happy Square Outsourcing Services, Cryogenic OGS, Crizac, .

The Current active IPO are Silky Overseas, Vandan Foods, Pushpa Jewellers, Cedaar Textile, Marc Loire Fashions, Neetu Yoshi, Adcounty Media India.

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