Sihora Industries coming with IPO to raise Rs 10.56 crore

Sihora Industries

• Sihora Industries is coming out with an initial public offering (IPO) of 16,00,000 equity shares of face value of Rs 10 each for cash at a fixed price of Rs 66 per equity share.
• The issue will open on October 10, 2025 and will close on October 14, 2025.
• The shares will be listed on SME Platform of BSE.
• The share is priced at 6.6 times higher to its face value of Rs 10.
• Book running lead manager to the issue is Sobhagya Capital Options.
• Compliance Officer for the issue is Dhara Jatin Vaghasiya.

Profile of the company

Sihora Industries is engaged in the business of manufacturing and sale of narrow woven fabrics, lace, digitally printed narrow fabrics, woven labels, tapes, zippers, elastics and other textile products, including technical textiles, for use in fashion and industrial sectors. Its operations are headquartered in Surat, Gujarat, which is a textile manufacturing hub. Its business integrates technology with traditional manufacturing processes for apparel clients, proprietary brands, and contract customers. It manufactures customizable products for brands, retailers, wholesalers, and end consumers.

The company operates an integrated textile manufacturing facility located in Surat, Gujarat, which undertakes end-to-end textile manufacturing processes, including yarn processing, weaving, digital printing, embroidery, dyeing, and finishing. The facility includes infrastructure for digital printing (reactive and sublimation), weaving through rapier looms and needle looms, electronic jacquard weaving and standard finishing processes. The integration of multiple manufacturing processes at a single location enables the company to supply products to customers engaged in both branded and non-branded businesses. The presence of multiple production functions within one facility assists in minimizing production delays, ensuring quality compliance, and supporting cost and process efficiencies. This structure also facilitates the execution of varied customer requirements and adherence to delivery timelines.

The manufacturing unit is located in Surat, Gujarat, which provides access to transportation networks, local suppliers, and workforce availability. Raw materials are procured from within Gujarat, which assists in reducing procurement time and associated logistics costs. The concentration of textile industry participants in the region also facilitates access to ancillary services and production inputs. The company has maintained business relationships with its customers and suppliers, which assist in the continuity of business operations and procurement of inputs. The receipt of repeat orders from customers is indicative of established business linkages and supports the company’s operational continuity.

Proceed is being used for:

• Funding capital expenditure towards purchase of additional plant and machinery
• Repayment or prepayment, in full or in part, of borrowings availed by the company from banks and financial Institutions
• Meeting working capital requirements
• General corporate purposes
• Meeting public issue expenses

Industry overview

India’s textiles sector is one of the oldest industries in the Indian economy, dating back to several centuries. The industry is extremely varied, with hand-spun and hand-woven textiles sectors at one end of the spectrum, with the capital-intensive sophisticated mills sector at the other end. The fundamental strength of the textile industry in India is its strong production base of a wide range of fibre/yarns from natural fibres like cotton, jute, silk, and wool, to synthetic/man-made fibres like polyester, viscose, nylon and acrylic.

The market for Indian textiles and apparel is projected to grow at a 10% CAGR to reach $350 billion by 2030. Moreover, India is the world's 3rd largest exporter of Textiles and Apparel. India ranks among the top five global exporters in several textile categories, with exports expected to reach $100 billion. The textiles and apparel industry contributes 2.3% to the country’s GDP, 13% to industrial production and 12% to exports. The textile industry in India is predicted to double its contribution to the GDP, rising from 2.3% to approximately 5% by the end of this decade.

The future of the Indian textiles industry looks promising, buoyed by strong domestic consumption as well as export demand. India is working on various major initiatives to boost its technical textile industry. Owing to the pandemic, the demand for technical textiles in the form of PPE suits and equipment is on the rise. The government is supporting the sector through funding and machinery sponsoring. Top players in the sector are achieving sustainability in their products by manufacturing textiles that use natural recyclable materials.

Pros and strengths

Consistency in quality standards: It follows stringent quality standards in its manufacturing unit to ensure that its products meet required customer standards. These standards ensure the quality consistency of the manufactured product by ensuring that it employs well-trained staff, have sufficient premises and equipment for manufacturing. It has an in-house quality control mechanism carried out by skilled operators under proper quality control and strict supervision. A comprehensive final inspection is conducted on representative samples before packaging. A visual inspection for any defects such as loose threads, stains, colour, dimensions, and fabric quality enables it to offer good quality products that are durable and comfortable to customers that are willing to pay for the desired quality.

Smooth flow of operations: Established relationship with customers and suppliers ensures stability in demand and an uninterrupted supply of raw materials. It has maintained long-standing relationship with its major customers. It is successful in building a strong client base for its business. Its existing relationships help it to get repeat business from its customers. This has helped it to maintain a long-term working relationship with its customers and improve its customer retention strategy. Long-term relations are built on trust and continuous maintaining of the requirements of the customers. It forms basis of further expansion for the company, as it is able to monitor a potential product/ market closely.

Market diversification: Selling its products to demanding customers has gained it valuables insights into customer trends, customer preferences and competitor strategies. It uses such knowledge to improve product quality and processes, enhancing the company’s competitiveness both domestically and internationally. Growth oriented business has led it to investment in technology upgrade, quality control, employee training to meet industry quality standards and customer requirements. Such upgradation benefits the entire industry and improves productivity and efficiency.

Risks and concerns

Depend on limited number of customers:  A significant portion of its revenue is derived from a limited number of customers. Its top five customers contributed 49.68%, 57%, 56.82%, 48.57%, and 43.93% of its total revenue during the period April 1, 2025 to August 31, 2025, Fiscal 2025, the period October 18, 2023 to March 31, 2024, the period April 1, 2023 to October 17, 2023, and Fiscal 2023, respectively, based on its Restated Financial Statements. Any loss of such major customers or a significant reduction in their demand could materially and adversely affect its business, financial condition, cash flows, and results of operations.

Rely on top five suppliers: Its manufacturing operations are significantly dependent on the timely and consistent supply of raw materials from a limited number of suppliers. Its top five suppliers contributed 67.50%, 43.30%, 58.60%, 58.33%, and 50.60% of its total purchases during the period April 1, 2025 to August 31, 2025, Fiscal 2025, the period October 18, 2023 to March 31, 2024, the period April 1, 2023 to October 17, 2023, and Fiscal 2023, respectively, based on its Restated Financial Statements. Any delay or failure by these suppliers to deliver raw materials in a timely manner, or at acceptable prices and specifications, could adversely affect its production schedules, lead to increased operational costs, and impact its ability to fulfill customer orders. 

Geographical constrains: Its sole manufacturing facility is located in Surat, Gujarat, and it does not currently have any additional manufacturing units in other parts of India. As a result, its operations are significantly dependent on the economic, regulatory, and infrastructural conditions prevailing in this region. Any adverse local developments such as natural disasters (floods, earthquakes, etc.), political unrest, labor shortages or strikes, epidemics, power supply disruptions, transportation delays, or changes in local laws and policies may interrupt or delay its manufacturing and supply chain activities.

Outlook

The company is engaged in the manufacturing and sale of narrow woven fabrics and industrial textiles such as laces, tapes, elastics, zippers and ribbons. Its manufacturing unit operates on promoter-owned infrastructure and is equipped with modern machinery, with further automation planned through the Issue proceeds. On the concern side, its operations are heavily dependent on the procurement of polyester yarn, which constitutes approximately 52.12% and 60.16% for FY 2024-25 and period from April 1, 2025 to March 31, 2025 respectively of its total raw material cost. Any disruption in the availability, quality, or price of this raw material could adversely impact its business operations, profitability, and financial condition. 

The company is coming out with an IPO of 16,00,000 equity shares of face value of Rs 10 each for cash at a fixed price of Rs 66 per equity share to mobilize Rs 10.56 crore. On performance front, the company’s revenue from operations has increased by 25.96% from Rs 1,156.09 lakh in the year ended on March 31, 2024 to Rs 1,456.20 lakh in the year ended on March 31, 2025. Profit after Tax (PAT) Increased to Rs 187.26 lakh in FY 2024-25 from Rs 59.67 lakh in the FY 2023-24.

Meanwhile, it proposes to increase its marketing efforts in exploring new products and new markets and also maintain and establish relationship with its customers. Enhancing its presence in additional segments will enable it to reach out to a larger audience. It considers factors such as cultural differences, logistic challenges and market demand for its products and customize few of the products to suit the preferences of the target markets. This may involve adjusting designs, sizes, colors, materials and packaging to align with local tastes and cultural norms. Understanding the preferences of the target market is crucial for successful sales. Through a combination of increased capacities, reduced costs, wider range of products and services adhering to industry standards, marketing initiatives, competitive pricing and more efficient use of resources, it intends to expand its footprint and become a preferred supplier in variety of segments.