Shree Ram Twistex IPO

Indian Cotton Yarn Industry Overview

India is one of the largest producers and exporters of cotton yarn globally, supported by abundant cotton availability, skilled labour, and strong export demand.

Market Size & Growth

Regulatory Landscape

• Minimum Support Price (MSP) for cotton

• PLI & ATUFS schemes

• Export-import policies governed by DGFT

Future Outlook

Demand for value-added, sustainable, and energy-efficient yarn manufacturing is expected to rise, benefiting organized players like Shree Ram Twistex Limited

What the Company Does

Shree Ram Twistex Limited manufactures cotton yarn using modern spinning technology and sells to:

• Textile processors

• Weaving units

• Fabric manufacturers

Target Customers

Value Chain Position

Raw Cotton → Spinning → Yarn → Fabric/Garments

Key Business Risks

• Volatility in cotton prices

• Power and fuel cost fluctuations

• Dependence on key customers

Financial Risks

• Moderate leverage levels

• Working capital intensive operations

Operational Risks

• Machinery downtime

• Regulatory non-compliance

• Skilled labour availability

Promoter Details

The promoters have not changed control in the last five years, ensuring stability and continuity

As per the RHP, the company does not have any group or associate companies under SEBI ICDR definitions

Board Committees

• Audit Committee

• Nomination & Remuneration Committee

• Stakeholders’ Relationship Committee

• CSR Committee

The governance framework aligns with SEBI LODR norms and Companies Act requirements.

Outstanding Litigations

The pending GST case pertains to an E-way bill procedural dispute and is not considered material to business continuity

Management focuses on:

• Capacity utilisation optimization

• Energy cost reduction

• Operational efficiency

• Stable customer base expansion

The IPO proceeds will be utilised for:

• Working capital requirements

• General corporate purposes

• Strengthening balance sheet

The issue price will be determined through the book-building process, considering:

• EPS of ₹2.37 (FY25)

• ROE & ROCE

• Peer group valuation multiples

The company has not declared dividends historically and may retain earnings for growth

• Capital gains tax as per holding period

• Dividend taxed in hands of shareholders

• STT applicable on secondary market trades

A. List of Related Parties Identified

1. Promoters & Key Managerial Personnel

2. Entities Related Through Promoters / Directors

B. Nature of Related Party Transactions

The company’s related party transactions fall into the following specific categories:

• Remuneration to Directors / KMP

• Sale / Purchase of goods or services

• Reimbursement of expenses

• Lease / rent payments (if any)

• Outstanding balances (payables / receivables)

C. Transaction-Wise Details (₹ in Lakh)

1. Remuneration Paid to Promoters & KMP

Nature: Salary, allowances, and managerial remuneration
Approval: Board & shareholders, as per Companies Act, 2013
Observation: No excess or irregular remuneration reported

2. Transactions with Promoter-Related Entities

Nature:

• Sale / purchase of goods

• Services aligned with core textile operations

Key Point:

• Transactions are routine, revenue-linked, and not capital in nature

• No preferential pricing disclosed

3. Reimbursement of Expenses

• No mark-ups

• No personal expenses routed through company books

D. Outstanding Balances with Related Parties

• No unsecured loans given to promoters

• No corporate guarantees to promoter entities

E. Compliance & Governance Safeguards

F. Key Investor Observations (Important)

• No diversion of IPO proceeds to related parties

• No promoter loans written off

• No abnormal or non-recurring related party items

• Transactions are operational, recurring, and business-linked

• Disclosures are transparent and complete

• Voting rights

• Dividend entitlement

• Participation in surplus assets

• Transferability

All disclosures are compliant with:

• SEBI ICDR Regulations

• Companies Act, 2013

• SEBI LODR Regulations