Spunweb Nonwoven Limited, a leading manufacturer of PP spunbond nonwoven fabrics from Morbi, Gujarat, has created a stir in the SME IPO market. Its IPO, worth ₹60.98 crore, saw massive oversubscription of 233.35 times on its final day, indicating strong investor demand.

The IPO was open for subscription from July 14 to July 16, 2025, and the allotment is expected to be finalized by July 17, 2025, with a tentative listing date of July 21, 2025 on the NSE SME platform.

Company Overview: Spunweb’s Leadership in Nonwoven Fabric

Spunweb Nonwoven Limited is one of India’s largest manufacturers of Polypropylene (PP) spunbond nonwoven fabric, operating five cutting-edge production lines across two modern manufacturing units.

The company has:

• State-of-the-art labs and quality control systems

• Advanced infrastructure to support high output and consistent quality

• A diversified customer base across industries requiring high-grade nonwoven fabric

Their facilities reflect commitment to quality, innovation, and scalability.

IPO Structure and Subscription Details

The IPO was a Book Built Issue consisting entirely of a fresh issue of 63.51 lakh equity shares, with a price band of ₹90–₹96 per share.

Key IPO stats:

• Total Issue Size: ₹60.98 crore

• Lot Size: 1,200 shares (minimum 2 lots = ₹2,30,400)

• Market Capitalisation at upper price band (₹96): ₹231.39 crore

• Lead Manager: Vivro Financial Services Pvt Ltd

• Registrar: MUFG Intime India Pvt Ltd

• Market Maker: Rikhav Securities Ltd

Final Day Subscription Status (as of 07:00 PM, July 16):

• Total Subscription: 233.35 times

• This includes demand across QIBs, NIIs, and retail categories.

Such massive oversubscription reflects strong confidence in the company’s fundamentals and IPO pricing.

Anchor Investment Before IPO

Prior to the public offer, Spunweb raised ₹17.31 crore from anchor investors by allotting 18,03,600 shares at ₹96 each. This participation helped establish credibility and initial demand momentum.

Grey Market Premium (GMP) and Listing Outlook

As of July 16:

• IPO Price: ₹96

• Expected Listing Price: ₹116

• GMP (Grey Market Premium): ₹20

• Implied listing gain: ~20.83%

While GMP isn't an official indicator, it gives a general sense of market sentiment, especially for SME IPOs.

Financial Performance and Growth Story

Spunweb has shown impressive growth in recent years. Here’s a financial summary:

Revenue from Operations:

• FY 2023: ₹11,768.01 lakh

• FY 2024: ₹15,424.12 lakh

• FY 2025: ₹22,713.95 lakh

EBITDA:

• FY 2023: ₹1,256.35 lakh

• FY 2024: ₹2,063.49 lakh

• FY 2025: ₹3,201.51 lakh

Net Profit (PAT):

• FY 2023: ₹112.68 lakh

• FY 2024: ₹544.18 lakh

• FY 2025: ₹1,079.22 lakh

These figures reflect consistent operational performance and profitability.

Key Ratios:

• Pre-issue EPS (FY24): ₹6.28

• Post-issue EPS (FY24): ₹4.48

• Pre-issue P/E: 15.28x

• Post-issue P/E: 21.44x

• ROCE: 33.66%

• ROE / RoNW: 31.63%

These metrics signal that the IPO is fairly valued with strong returns for shareholders.

IPO Objectives and Fund Utilisation

Spunweb plans to utilise the IPO proceeds strategically:

1. ₹29 crore – For working capital needs of the company

2. ₹10 crore – Investment into wholly-owned subsidiary SIPL for its working capital

3. ₹8 crore – For partial or full repayment of borrowings

4. Balance – For General Corporate Purposes

This demonstrates a clear roadmap for growth and debt reduction post-listing.

Promoters and Leadership Team

The company is led by Jay Dilipbhai Kagathara and Kishan Dilipbhai Kagathara, who have played a key role in business development and operations.

Supporting them is a highly experienced team:

• Yashpalsinh Ghanshyamsinh Dasondi (GM – Operations): Over 18 years of expertise

• Abhaykumar Narshibhai Fadadu (CFO): 9+ years of experience in accounting and finance

The team’s domain expertise helps maintain operational efficiency and customer relationships.

Risk Factors to Consider

While the IPO looks attractive, investors should be cautious about:

• SME segment volatility

• Unpredictable listing price despite GMP

• Limited liquidity post listing

• Dependence on raw material prices (PP granules)

Also, investors must understand that GMPs are unofficial and highly speculative, especially for SME issues.

Allotment and Listing Process: Step-by-Step

Allotment Date: July 17, 2025
Listing Date (tentative): July 21, 2025

To check your allotment status:

• Visit registrar website (MUFG Intime India Pvt Ltd)

• Select Spunweb Nonwoven Limited IPO

• Enter PAN / Application Number / DP ID

• Click Submit

You’ll see if you’ve been allotted shares.

Should You Invest in Spunweb IPO?

For investors evaluating the IPO:

✅ Apply If You:

• Want short-term listing gains (based on GMP)

• Trust solid financials and growth metrics

• Believe in the long-term potential of nonwoven fabric industry

❌ Avoid If You:

• Are risk-averse (SME IPOs can be volatile)

• Prefer large-cap or mainboard IPOs

• Are uncomfortable with high minimum investment (₹2.3 lakh)

Analyst Verdict:

Given the financial growth, premium GMP, and over 230x subscription, high-risk investors may apply for listing gains. However, as this is a SME IPO, one should remain cautious about post-listing liquidity and volatility.

Disclaimer:
This analysis is for educational and informational purposes only. It does not constitute investment advice or a solicitation to buy or sell any securities. Investors should perform their own due diligence or consult a SEBI-registered financial advisor before making any investment decisions. All data is based on information available as of the publication date and may be subject to change.

The Upcoming IPOs in this week and coming weeks are Monarch Surveyors & Engineering Consultants, TSC India, Swastika Castal, Savy Infra, NSDL.

The Current active IPO are Monika Alcobev.

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