Saraswati Saree Depot Limited IPO

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They are a leading player in the sarees wholesale (B2B) segment, with their roots in the sarees business dating back to 1966. Besides sarees, they also engage in the wholesale business of other women’s apparel, including kurtis, dress materials, blouse pieces, lehengas, and bottoms.

Sarees, an ethnic wear garment originating in India, are popular for both casual and festive occasions. Typically ranging from six to nine yards in length, sarees can be worn in various styles. Indian women commonly wear silk, cotton, and synthetic fiber sarees, among other blends. The saree market has seen significant demand growth from the wedding and celebration wear segments in recent years. This market shift is driven by consumers seeking higher quality and premium products, leading to an increase in sales of higher-priced sarees.

The saree industry in India is projected to grow at a 5-6% CAGR from Fiscal 2023 to Fiscal 2028, reaching Rs 625-650 billion by Fiscal 2028 (Source: CRISIL Report). Traditionally dominated by small retail shops and unorganized players with loyal customer bases, the saree market is now witnessing organized retailers tapping into the demand for branded and quality products.

With rising aspirations and disposable incomes among India’s middle class, organized retailers are targeting the mid to premium saree market. This trend is further driven by the Indian population’s growing preference for branded apparel, creating opportunities for organized branded players to launch products catering to this demand.

Objects of the Saraswati Saree Depot Limited IPO:

The company intends to utilize the net proceeds from the issue towards the funding of the following objects: i. Funding working capital requirements of the company. ii. General corporate purposes. Total number of share issue is :- i. Fresh issue is 6,499,800 shares, ii. Offer for sale is 3,501,000 shares.

Saraswati Saree Depot Limited IPO Details:

Open Date: Aug 12 2024
Close Date: Aug 14 2024
Total Shares: 10,000,800
Face Value: ₹ 10 Per Equity Share
Issue Size: 160.01 Cr.
Lot Size: 90 Shares
Issue Price: ₹ 152 - 160 Per Equity Share
Listing At: NSE,BSE
Listing Date: Aug 20 2024

Promoters And Management:

Shankar Dulhani, 56, is the Chairperson and Executive Director of the Company, associated since its inception. Formerly a partner at "M/s. Saraswati Sadi Depot," he completed high school with the Maharashtra State Board of Secondary Education. With over 38 years of experience in the apparel industry, he has deep expertise in saree manufacturing, marketing, and business development, driving the Company’s continuous growth. His leadership is pivotal in decision-making, strategy formulation, and business development. Vinod Dulhani, 45, has been the Managing Director and CEO of the Company since its inception. Formerly a partner at "M/s. Saraswati Sadi Depot," he completed his higher secondary education with the Maharashtra State Board. With over 27 years of experience in the apparel industry, he is a second-generation business member. Vinod oversees product development, business development, operations, and administration, and has played a key role in building networks with weaving houses across India and enhancing departmental efficiency. Mahesh Dulhani, 53, has been the Executive Director of the Company since its inception. A former partner at "M/s. Saraswati Sadi Depot," he completed his higher secondary education with the Maharashtra State Board. With over 30 years of experience in the apparel industry, Mahesh specializes in brand creation and management. He currently oversees the Company's sales operations, manages customer relations, and directs marketing functions.

Financials of Saraswati Saree Depot Limited IPO:

Particulars ( In Crores )
2022
2023
2024
Revenue from Operations 550 602 611
Other Income 1 2 2
Total Revenue 550 604 613
Purchases of Stock-in-trade 573 548 549
Change in Work-In-Progress -76 -17 -15
Employees Benefit Expenses 10 10 10
Other Expenses 22 27 27
EBITDA 22 36 42
OPM (%) 3.92% 5.91% 6.87%
Depreciation & Amortisation 0.6 1 1
EBIT 21 35 41
Finance Cost 4 4 2
PBT 16 31 39
Tax 4 8 10
PAT 12 23 30
NPM (%) 2.24% 3.81% 4.82%
No.of Shares 3.95 3.95 3.95
EPS 3.10 5.80 7.45

Comparison With Peers:

Name of the Company Revenue (In Crore) PAT (In Crore) EPS ( in Rs) P/E CMP Mcap (In Crore)
Saraswati Saree Depot Limited 611 30 7.45 21.5 160 634
Go Fashion (India) Ltd 763 83 15.33 70.9 1,118 6,038
Sai Silks (Kalamandir) Limited 1,374 101 6.58 23.4 154 2,369
* All the data is as per FY24.

Recommendation on Saraswati Saree Depot Limited IPO:

Review and Recommendation of Saraswati Saree Depot by team IZ is 4/10. 1. Saraswati Saree Depot Private Limited, a key player in the B2B wholesale sarees segment, has a rich heritage that dates back to 1966. Over the decades, the company has evolved to become a leading supplier of sarees and other women’s apparel such as kurtis, dress materials, blouse pieces, lehengas, and bottoms. 2. Product Offering and Market Presence The saree, an iconic ethnic garment originating from India, is the flagship product of Saraswati Saree Depot. Sarees are versatile, worn on both casual and festive occasions, and are available in a variety of fabrics such as silk, cotton, synthetic fibers, and blends. 3. The company sources its sarees from a network of more than 900 weavers and suppliers across major manufacturing hubs in India, including Surat, Varanasi, Mau, Madurai, Dharmavaram, Kolkata, and Bengaluru. These long-standing relationships ensure a steady supply of high-quality products, allowing the company to maintain an extensive catalog with over 300,000 SKUs. 4. Competitive Landscape The apparel market is highly competitive, with numerous brands and retailers vying for market share. This intense competition, coupled with market saturation, presents challenges in terms of brand differentiation, pricing strategies, and customer loyalty. 5. The Revenue has Increased from Rs.550 Crores in FY22 to Rs.611 Crores in FY24. 6. The EBITDA has Increased from 22 Crores in FY22 to 42 Crores in FY24. 7. The PAT has Increased from 12 Crores in FY22 to 30 Crores in FY24. 8. As per FY24, CFO/EBITDA is 1.00, and EPS is 7.45, 9. Market Capitalization is 634 Crores and P/E is 21.5x based on FY24.

Lead Manager of Saraswati Saree Depot Limited IPO:

  1. Unistone Capital Pvt Ltd

Registrar of Saraswati Saree Depot Limited IPO:

  1. Bigshare Services Private Limited

Company Address:

Saraswati Saree Depot Limited Sr No.144/1 Manademala, Near Tawade Hotel, Gandhinagar Road, Uchagaon, Kolhapur – 416005 Phone: +919271009858 Email: cs@saraswatisareedepotlimited.com Website: https://www.saraswatisareedepot.com/home

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