A Gujarat-based cotton yarn manufacturer hits the market with a Rs 170 crore fresh issue
Aastha Spintex Ltd., a Gujarat-based textile manufacturer established in 2013, opens for subscription on June 29 with the issue closing on July 1. The company is engaged in manufacturing and trading of carded, combed, and compact combed cotton yarns and cotton bales, operating an integrated spinning and ginning facility at Halvad, Morbi, Gujarat.
Swastika Investmart recommends subscribing, though some independent analysts view the pricing as aggressive.
What the Company Does
Aastha Spintex produces 100% cotton yarns in counts ranging from Ne 26 to Ne 40, catering to a wide spectrum of end uses including denim, terry towels, shirting, sweaters, socks, home textiles, and industrial fabrics. It operates exclusively in the B2B segment, supplying textile manufacturers, yarn exporters, and bulk purchasers.
The company’s integrated model generates additional revenue streams — cotton seeds separated during ginning are sold for oil extraction and animal feed, while cotton waste by-products from spinning are sold to non-woven fabric makers.
Within Gujarat, the company sells directly, while the majority of sales outside the state (including exports) are routed through a reseller arrangement with 7 Seas Impex. Investments in solar and wind power now meet around 80% of its energy needs, helping reduce power costs. As of December 31, 2025, it had 205 employees.
The central strategic move is the proposed acquisition of 100% equity in Falcon Yarns Pvt. Ltd., a Gujarat-based cotton yarn manufacturer. As Swastika Investmart notes in its report, “the acquisition of Falcon Yarns is expected to more than double spinning capacity from 7,700 MT to 17,457 MT per annum, supporting future revenue growth.” Falcon recorded revenue of roughly Rs 220–249 crore across the last three financial years.
Issue Details
| Particulars | Details |
|---|---|
| Issue Opens | June 29, 2026 |
| Issue Closes | July 1, 2026 |
| Listing Date | July 6, 2026 (BSE & NSE) |
| Price Band | Rs 125 – Rs 136 per share |
| Face Value | Rs 10 |
| Issue Size | Rs 170 crore (entirely Fresh Issue) |
| Total Shares | 1,25,00,000 shares |
| Market Lot | 110 shares |
| Post-Issue Market Cap | Rs 600.33 crore (at upper cap) |
| Issue Constitutes | 28.32% of post-IPO equity |
| QIB / NII / Retail Split | 20% / 40% / 40% |
| BRLMs | BOI Merchant Bankers, PNB Investment Services |
| Registrar | Bigshare Services Pvt. Ltd. |
Objects of the Issue
The bulk of the proceeds — around Rs 111.51 crore — will fund part of the purchase consideration for the Falcon Yarns acquisition, with a further Rs 10 crore towards Falcon’s working capital as inter-corporate deposits, and the balance for general corporate purposes.
Financial Performance
| Particulars (Rs cr) | FY23 | FY24 | FY25 | 9M FY26 |
|---|---|---|---|---|
| Total Income | 239.69 | 305.67 | 352.17 | 314.02 |
| EBITDA Margin | 4.84% | 11.20% | 13.16% | — |
| Net Profit | 1.06 | 16.29 | 22.92 | 17.56 |
| PAT Margin | 0.44% | 5.34% | 6.53% | 5.60% |
| RoCE | 4.58% | 18.95% | 18.89% | 12.13% |
Revenue has grown steadily and both EBITDA and PAT margins have improved markedly since FY23. As Swastika puts it, revenue grew from around Rs 239 crore in FY23 to Rs 351 crore in FY25 “while PAT surged from Rs 1 Cr to Rs 23 Cr, reflecting a strong turnaround.” That said, the sudden jump in the bottom line from FY24 onwards raises questions over sustainability, given the highly competitive and fragmented nature of the cotton yarn segment.
Valuation and Peer Comparison
At the upper band of Rs 136, the issue is valued at a P/E of around 26x on FY25 earnings (and roughly 25.7x on annualised FY26 earnings), and at a P/B of about 1.86x on post-IPO NAV. Swastika takes a more favourable view of the valuation, stating that “at around 18.78x FY25 P/E, the IPO appears reasonably valued considering its growth profile and improving margins,” and recommends a Subscribe for medium-to-long-term investors.
| Company | EPS (Rs) | P/E (x) | RoNW (%) | Revenue (Rs cr) |
|---|---|---|---|---|
| Aastha Spintex | 8.29 | 18.78 | 18.93 | 352.17 |
| Ambika Cotton Mills | 114.83 | 14.25 | 7.27 | 702.02 |
| Lagnam Spintex | 7.28 | 11.15 | 10.64 | 605.56 |
| Pashupati Cotspin | 0.82 | 106.54 | 8.35 | 636.70 |
Note that these peers are not strictly comparable on a like-for-like basis, and against most of them the pricing looks demanding.
Risks to Consider
Earnings are exposed to cotton price volatility, which can swing margins sharply in a thin-margin business. The company operates from a single manufacturing facility, making it vulnerable to any disruption at that location. A major portion of sales outside Gujarat and exports depends on a single reseller, 7 Seas Impex, creating concentration risk. The sudden improvement in profitability from FY24 raises sustainability concerns in a fragmented, competitive segment, and any demand shift from cotton yarn to synthetic fibres could pressure sales. Finally, the Falcon Yarns acquisition carries integration and execution risk, and much of the IPO’s value proposition hinges on it completing smoothly.