A Ludhiana-based, three-decade-old textile manufacturer opens its Rs 53.27 crore NSE SME issue on August 24 — an integrated yarn-to-cloth model, a blanket-led product mix, a solar-and-deleveraging use of proceeds, but a heavy Punjab concentration
A textile manufacturer producing fabrics, blankets, winter textiles and garments plans to raise Rs 53.27 crore via an SME listing on NSE SME.
Madhur Knit Crafts Ltd, incorporated in 1997 and operating an integrated yarn-to-cloth model out of Ludhiana, Punjab, opens for subscription on August 24 with the issue closing on August 27.
Madhur Knit Crafts Ltd operates in textile manufacturing, producing fabrics, blankets, winter textiles, garments and other textile products. The company runs an integrated yarn-to-cloth manufacturing model, taking raw yarn through knitting, dyeing, printing, finishing and other value-added processes to serve consumer, industrial and institutional markets.
The product mix is led decisively by knitted cloth and blankets. In the eleven months to February 28, 2026, Knitted Cloth contributed Rs 17,197.23 lakh, Blanket Rs 1,199.71 lakh, Job Work Rs 691.39 lakh, Scrap Rs 198.33 lakh and Garments Rs 182.39 lakh, for total revenue of Rs 19,469.05 lakh. The mix underlines that this is fundamentally a knitted-fabric and winter-textiles business, weighted toward home and consumer textiles.
The customer base is B2B and shows recurring characteristics. Retained customers contributed 66.55% of operating revenue in the eleven-month FY26 period and 77.00% in FY25, supporting revenue visibility and repeat business. Customer concentration itself is fairly spread — the top 1 customer accounted for 5.97% of revenue in the FY26 period (down from 14.11% in FY25), the top 5 for 24.86%, and the top 10 for 34.14%.
The company is led by Managing Director and Promoter Mr. Arun Gupta, who has over four decades of experience in the textile and yarn industry, completed his Higher Secondary education from the CBSE Board and holds a Business Mastery Program certification from Business Coaching India, New Delhi. The promoters are Arun Gupta, Piyush Gupta and Chirag Gupta.
Issue Details
| Particulars | Details |
|---|---|
| Issue Opens | August 24, 2026 |
| Issue Closes | August 27, 2026 |
| Listing | NSE SME |
| Listing Date | September 1, 2026 |
| Price Band | Rs 95 – Rs 100 per share |
| Issue Size | Rs 53.27 crore |
| Fresh Issue | 53,27,693 shares (entirely fresh) |
| QIB | Not more than 50% |
| Retail | Not less than 35% |
| NII | Not less than 15% |
| Min. Application (Retail) | 2 lots / 2,400 shares / Rs 2,40,000 |
| Lead Manager | SKI Capital Services Ltd. |
| Market Maker | NNM Securities Pvt. Ltd. |
| Registrar | Skyline Financial Services Pvt. Ltd. |
The issue is entirely a fresh issue. Proceeds are earmarked for prepaying or repaying a portion of outstanding borrowings (Rs 2,085.00 lakh), working capital (Rs 1,591.65 lakh), capital expenditure on a rooftop solar plant (Rs 367.50 lakh), and general corporate purposes.
Post-issue, promoters’ holding falls from 98.01% to 70.54%.
Price Band Analysis
At the upper price band of Rs 100, Madhur Knit Crafts is valued at a post-issue P/E of 15.17x and a P/B of 4.40x, which the lead manager frames as a reasonable valuation. The pitch leans on tailwinds in Indian textile manufacturing — rising domestic consumption, demand for value-added and winter textiles, export opportunities, and increasing adoption of integrated and automated manufacturing.
On the pre-issue numbers, the company reports a NAV (FY25) of Rs 22.75, EPS (FY25) of Rs 8.51, and a pre-issue P/E of 11.75x.
Financial Performance
| Particulars (Rs lakh) | FY24 | FY25 | 11M-FY26 (to Feb’26) |
|---|---|---|---|
| Revenue from Operations | 10,838.45 | 17,163.50 | 19,469.05 |
| EBITDA | 804.40 | 2,327.52 | 2,567.62 |
| EBITDA Margin (%) | 7.42 | 13.56 | 13.19 |
| PAT | 170.43 | 1,103.25 | 1,235.23 |
| PAT Margin (%) | 1.57 | 6.43 | 6.34 |
| RoE (%) | 10.49 | 37.42 | 28.33 |
| RoCE (%) | 13.09 | 33.49 | 31.11 |
| EPS (Rs) | 1.41 | 8.51 | 9.20 |
| Debt to Equity | 3.56 | 2.28 | 1.69 |
Revenue from operations grew sharply, from Rs 10,838.45 lakh in FY24 to Rs 17,163.50 lakh in FY25, and further to Rs 19,469.05 lakh in the eleven months to February 28, 2026. The profit trajectory is the eye-catching part: PAT jumped from Rs 170.43 lakh in FY24 to Rs 1,103.25 lakh in FY25, with EBITDA margin more than doubling from 7.42% to 13.56% over that span and holding near 13% in the FY26 period.
Return ratios have moved up in step, with RoE at 28.33% and RoCE at 31.11% in the FY26 period, and the balance sheet has deleveraged — debt-to-equity falling from 3.56x in FY24 to 1.69x by February 2026. The FY25 profit surge, from a thin 1.57% PAT margin in FY24, is the number most worth scrutinising, since a jump of that size immediately ahead of a listing raises the question of how sustainable those margins are in a highly competitive and fragmented textile segment.
Peer Comparison (as of FY25)
| Company | EPS (Rs) | P/E | RoNW (%) | NAV (Rs) |
|---|---|---|---|---|
| Madhur Knit Crafts Ltd. | 8.51 | 11.75 | 37.42 | 22.75 |
| Kaytex Fabrics Ltd. | 12.79 | 4.69 | 14.96 | 79.27 |
Risks to Consider
Geographic concentration is the standout risk. The company is heavily dependent on Punjab, which contributed 98.18% of total revenue in the eleven months to February 28, 2026, up from 94.04% in FY25 and 93.35% in FY24 — leaving operations exposed to region-specific economic, environmental and operational disruptions.
Cash-flow quality is a real concern. Despite reporting positive book profits, the company recorded negative cash flows from operations in each of the last three fiscal years — Rs 4.78 lakh in FY23, Rs 367.70 lakh in FY24, and Rs 255.82 lakh in FY25 — indicating a need for continued focus on operating cash-flow generation even as reported profits rose.
Margin sustainability warrants caution. PAT margin expanded from 1.57% in FY24 to 6.43% in FY25 and held near 6% in the FY26 period; a jump of that magnitude just before the issue raises the question of whether the recent profitability can persist in a fragmented, price-competitive textile market.
Related-party overlap is a governance flag. Sister group company Star Cottex Limited operates in the manufacturing and trading of similar textile products, and despite operating independently, the overlapping business activities may create potential conflicts over business opportunities, customers and resource allocation.
Product concentration is meaningful — knitted cloth alone accounts for the overwhelming majority of revenue, so any slowdown in that category or in the seasonal winter-textiles cycle could hit the top line.
SME-platform risks apply — the fresh-issue structure, the sizeable minimum retail commitment of Rs 2.40 lakh, and typically thinner post-listing liquidity all add to the risk profile, alongside the flat-to-zero grey market and soft opening-day demand.