GMP IPO Watch
Shree Ram Twistex IPO: Spinning a Green Future in the Cotton Yarn Sector
Shree Ram Twistex, a specialized B2B cotton yarn manufacturer from Gujarat, is set to launch its ₹110.24 crore Mainboard IPO on February 23, 2026. With a focus on high-margin "Eli Twist" yarns and a massive pivot toward 100% captive renewable energy, this blog breaks down the ₹95–₹104 price band and the company’s staggering 22% profit growth.
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1. Business Overview: The Compact Spinning Edge
Founded in 2013, Shree Ram Twistex operates a state-of-the-art facility in Gondal, Rajkot. Unlike traditional spinning mills, they focus on high-quality Compact Ring Spun yarns that are essential for premium textiles.
Product Moat: They produce specialized yarns (Ne 8 to Ne 40) used in high-end denim, terry towels, and industrial fabrics.
The "Eli Twist" Factor: Their value-added yarns (Eli Twist, Slub, and Lycra-blended) command higher margins than generic cotton yarn.
Marquee Clients: They maintain long-term B2B relationships with industry giants like Welspun Living and Jindal Worldwide.
2. IPO Timelines & Lot Details
This is a 100% Fresh Issue, meaning no promoters are selling their shares; all the money raised will be used to grow the company.
| Event / Detail | Information |
|---|---|
| IPO Opening Date | Monday, February 23, 2026 |
| IPO Closing Date | Wednesday, February 25, 2026 |
| Price Band | ₹95 to ₹104 per share |
| Minimum Lot Size | 144 Shares |
| Min. Retail Investment | ₹14,976 |
| Total Issue Size | ₹110.24 Crore |
| Allotment Date | Thursday, February 26, 2026 |
| Tentative Listing Date | Monday, March 2, 2026 |
3. Financials: Strong Growth, Improving Margins
The company’s financial trajectory shows a significant shift toward efficiency:
Revenue: Grew 10% to ₹255 crore in FY25.
Profitability (PAT): Jumped 22% to ₹8 crore in FY25. More impressively, they reported a PAT of ₹7 crore in just the first half of FY26, indicating a massive margin expansion.
Return on Equity (ROE): Currently stands at a healthy 15.8%.
Valuation: At the upper price band of ₹104, the P/E ratio is approximately 29x, placing it in a competitive position compared to premium peers like Ambika Cotton Mills.
4. Grey Market Premium (GMP) Update
As of February 18, 2026:
Current GMP: ₹0 (Flat).
Market Sentiment: While the GMP is currently quiet, analysts expect interest to pick up as the company is a "Mainboard" entrant with a strong ESG (Environmental, Social, and Governance) story due to its solar and wind projects.
5. Strategic "Use of Proceeds": The Energy Pivot
In the textile industry, power accounts for roughly 6-8% of total costs. Shree Ram Twistex is using a majority of the IPO funds to eliminate this expense:
₹46.85 Crore: Setting up a 6.1 MW Solar plant and a 4.2 MW Wind power plant for captive use.
₹14.89 Crore: Repayment of existing debt to reduce interest burden.
₹44.00 Crore: Funding working capital for higher-volume production.
6. Investor Analysis: Pros & Cons
Strengths:
100% Captive Power: Once the solar/wind projects are live, their operating margins are expected to see a permanent structural boost.
No OFS: Promoters are keeping their skin in the game; the entire issue stays within the company.
High-Tech Moat: Use of European technology ensures lower wastage and higher quality than localized competitors.
Risks:
Customer Concentration: A significant portion of revenue comes from a few large clients like Welspun.
Geographic Risk: Over 90% of revenue is currently generated within Gujarat.
Cotton Prices: Like all spinners, they are vulnerable to the volatility of raw cotton commodity prices.
7. Conclusion
Shree Ram Twistex is more than just a textile mill; it is an efficiency play. By using the IPO to become energy-independent and doubling down on value-added yarns, the company is positioning itself for a higher valuation tier. For investors, the H1 FY26 profit surge is a strong signal of things to come.
