Spunweb Nonwoven IPO Opens July 14 to Raise ₹60.98 Crore for Expansion and Debt Repayment

Spunweb Nonwoven Limited, a manufacturer of nonwoven fabrics used in hygiene, packaging, and agriculture, is opening its Initial Public Offering (IPO) on July 14, 2025. The issue is entirely a fresh issue aimed at raising ₹60.98 crore, with proceeds earmarked to fund working capital requirements, invest in its wholly owned subsidiary, repay borrowings, and for general corporate purposes.

The IPO will close on July 16, 2025, and allotment is expected on July 17, 2025. Shares are proposed to list on the NSE SME platform on July 21, 2025.

Issue Structure and Price Band

The Spunweb Nonwoven IPO will be offered in a price band of ₹90 to ₹96 per equity share with a face value of ₹10 each.

Issue Details:

• Fresh Issue: 63,51,600 equity shares aggregating up to ₹60.98 crore

• No Offer for Sale (OFS) component

• Market Maker Portion: 3,21,600 shares reserved for Rikhav Securities Limited

• Net Offer to Public: 60,30,000 shares

Lot Size:

• 1 lot = 1,200 shares

• Minimum Retail Investment: 2 lots = 2,400 shares = ₹2,30,400

• Minimum HNI Investment: 3 lots = 3,600 shares = ₹3,45,600

Unlike most mainboard IPOs, this SME IPO requires a large minimum ticket size, making it suitable for higher-net-worth retail and non-institutional investors.

Subscription Categories

The IPO allocation will follow these guidelines:

• Qualified Institutional Buyers (QIB): Not more than 50% of the Net Issue

• Retail Investors: Not less than 35% of the Net Issue

• Non-Institutional Investors (NII): Not less than 15% of the Net Issue

Anchor Investors:
The company did not raise funds from anchor investors prior to the IPO opening.

Timeline for Investors

Important Dates:

• IPO Opens: Monday, July 14, 2025

• IPO Closes: Wednesday, July 16, 2025

• Allotment Finalisation: Thursday, July 17, 2025

• Refund Initiation: Friday, July 18, 2025

• Shares Credited to Demat: Friday, July 18, 2025

• Listing Date on NSE SME: Monday, July 21, 2025

Note: Investors must confirm UPI mandates by 5 PM on July 16, 2025.

Company Profile: Leading Nonwoven Fabric Manufacturer

Founded in 2015, Spunweb Nonwoven Limited is engaged in manufacturing spunbond nonwoven fabrics, which are used in multiple applications:

• Hygiene: Diapers, sanitary napkins

• Medical: Surgical masks, protective clothing

• Packaging: Bags, covers

• Agriculture and Construction: Tarpaulins, protective sheets

The company operates a modern manufacturing facility in Rajkot, Gujarat, equipped with Universal Tensile Testing and Rewet Properties Testing systems to ensure consistent product quality.

Exports account for a significant share of revenue, with customers in:

• United States

• United Arab Emirates

• Italy

• Egypt

• Saudi Arabia

• Sri Lanka

• Kenya

• Nigeria

Key clients include RGI Meditech, Millennium Babycares, Sekhani Industries, and Poligof Micro Hygiene India.

Product Portfolio

Spunweb Nonwoven manufactures and supplies:

• Hydrophobic Fabric

• Hydrophilic Fabric

• UV-Treated Fabric

These products serve different sectors with custom specifications as per client requirements.

Competitive Strengths

The company has several differentiators that support growth:

• Among India’s largest spunbond nonwoven fabric manufacturers

• Tailored product solutions for diverse industries

• Strong relationships with clients domestically and globally

• Advanced cleanroom technology in production

• Experienced promoters with proven execution capability

Financial Performance

Spunweb Nonwoven has demonstrated strong growth in revenue and profitability:

FY23–FY25 Financials (₹ Crore):

Key Ratios (FY25):

• ROE: 31.63%

• ROCE: 33.66%

• PAT Margin: 4.75%

• EBITDA Margin: 13.75%

• Debt/Equity: 2.11

Valuation Metrics:

• Pre-issue EPS: ₹6.08

• Post-issue EPS: ₹4.48

• Pre-issue P/E: 15.79x

• Post-issue P/E: 21.44x

• Market Capitalisation at upper price band: ~₹231.39 crore

This data shows solid top-line growth and profitability, though the debt levels remain high.

Objects of the Issue

The company plans to deploy IPO proceeds as follows:

This allocation aims to strengthen the balance sheet, reduce debt, and support future growth.

Promoters and Management

Promoters:

• Jay Dilipbhai Kagathara

• Kishan Dilipbhai Kagathara

Pre-issue holding: 88.50%
Post-issue holding: (To be updated post-allotment)

Risks and Considerations

Before applying, investors should consider:

• Large minimum investment amount (~₹2.3 lakh), making it less accessible to small retail investors

• High debt-equity ratio, which could impact cash flows

• Competitive pressure from domestic and international players

• Exposure to export market fluctuations

Recommendation

The IPO offers an opportunity to invest in a profitable, fast-growing nonwoven fabric manufacturer with significant export exposure. However, investors should carefully weigh high leverage and valuation multiples, as the post-issue P/E of ~21x appears fully priced relative to peers.

Our view:

• Suitable for investors with a higher risk appetite seeking exposure to India’s expanding nonwoven fabric sector

• Conservative investors may consider waiting for listing and operational updates before committing capital

  Disclaimer:

  This article is intended for informational and educational purposes only and does not constitute investment advice. Readers are advised to consult their financial advisor before making any investment decisions. Investments in securities are subject to market risks. Please read all related documents carefully before applying for the IPO. The data provided is based on publicly available information and may be subject to change.

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