Saraswati Saree Depot IPO sees healthy demand on day 1, subscribed 4.37 times

Saraswati Saree Depot IPO

Kolhapur-based Saraswati Saree Depot's initial public offering has garnered healthy demand from investors, subscribing 4.37 times on the first day of bidding on August 12 despite market volatility.

The sarees and other women’s apparel supplier intends to raise Rs 160.02 crore through its maiden public issue at the upper price band. It is a combination of fresh issuance of 64.99 lakh shares worth Rs 104 crore and an offer-for-sale (OFS) of 35.01 lakh shares worth Rs 56.02 crore by promoters.

The price band for the public issue, which closes on August 14, has been fixed at Rs 152-160 per share.

Investors bought 4.37 crore equity shares on Monday, against the issue size of 1 crore shares, the subscription data on the exchanges showed. Non-institutional investors (NII - high networth individuals) were at the forefront, picking 12.62 times the allotted quota.

Retail investors followed the NIIs, buying 5.39 times the portion set aside for them, while qualified institutional buyers also turned active on the first day, bidding 1.19 times the reserved portion.

Saraswati Saree Depot claimed to be a key player in sarees wholesale (B2B) segment. It is also involved in the wholesale business of other women’s apparel wear such as kurtis, dress materials, blouse pieces, lehengas, and bottoms. More than 90 percent of its total revenues are generated from sale of sarees.

The company recorded net profit at Rs 29.5 crore for the fiscal year 2024, growing 28.5 percent from Rs 23 crore in the previous fiscal despite muted growth in topline, backed by healthy operating numbers. Revenue from operations for the year at Rs 610.9 crore increased by 1.5 percent from Rs 601.9 crore in the previous year.

EBITDA (earnings before interest, tax, depreciation and amortisation) grew by 18.7 percent on-year to Rs 40.4 crore with margin expanding by 95 bps to 6.61 percent in the year ended March 2024.

Saraswati Saree Depot is going to utilise Rs 81 crore out of the net fresh issue proceeds for its working capital requirements, and the remainder funds for general corporate purposes, while the offer-for-sale money will go to promoters, the selling shareholders.