Shlokka Dyes Makes Poor Debut with 6.04% Discount, Lists at ₹85.50 Against Weak Subscription

Shlokka Dyes Limited, a manufacturer of reactive dyes and pigments specializing in synthetic organic dyes for the textile industry with a 5,000 sq. meter manufacturing facility in Gujarat having an annual capacity of 9,000 MT, made a disappointing debut on BSE SME on October 17, 2025. After closing its extended IPO bidding between September 30-October 14, 2025, the company commenced trading with a 1.10% discount opening at ₹90 and declining to ₹85.50 with losses of 6.04%.

Shlokka Dyes Listing Details

Invest in Indian Markets and Unlock Future Potential With 5paisa!

Open Account Now

Shlokka Dyes Limited launched its IPO at ₹91 per share (revised down from the original ₹95-100 price band) with a minimum investment of 2,400 shares costing ₹2,18,400. The IPO received weak response with a subscription of just 1.12 times despite an 11-day extended bidding period - retail investors at poor 0.65 times, QIB at modest 1.02 times, and NII at moderate 2.24 times.

First-Day Trading Performance Outlook

• Listing Price: Shlokka Dyes share price opened at ₹90 representing a discount of 1.10% from the issue price of ₹91, and declined further to ₹85.50, delivering losses of 6.04% for investors reflecting negative market sentiment towards the textile dyes sector.

Growth Drivers and Challenges

Growth Drivers:

- Diversified Product Portfolio: Wide range of dyes including reactive dyes (M-X, H&P, HE, VE, RR), direct dyes, basic dyes, and digital printing dyes serving textile, leather, and paper industries with ISO certifications ensuring quality standards.

- Integrated Manufacturing: Manufacturing facility covering 5,000 sq. meters with a 5,731.81 sq. meter factory in Gujarat having an annual capacity of 9,000 MT, stringent quality control through in-house HPLC lab, and an integrated production process providing operational advantages.

- Strong Financial Performance: Impressive PAT growth of 104% to ₹10.01 crore and revenue growth of 68% to ₹103.45 crore in FY25, exceptional ROE of 36.82%, strong ROCE of 36.14%, demonstrating operational leverage and margin expansion.

Challenges:

- Revenue Inconsistency Concerns: Despite overall growth from FY23 to FY25, the top line declined sharply in FY24 indicating business volatility, operating in a highly competitive and fragmented textile dyes segment requiring continuous market share defense.

- Aggressive Valuation Metrics: Post-issue P/E of 19.46x and price-to-book value of 5.04x appearing aggressively priced despite strong recent growth, elevated debt-to-equity ratio of 1.02, modest PAT margin of 9.68% requiring sustained performance to justify valuations.

Utilisation of IPO Proceeds

- Capacity Enhancement: ₹6.13 crore for capital expenditure towards plant and machinery expanding the production capacity beyond the current 9,000 MT annual capacity.

- Debt Reduction and Working Capital: ₹11.50 crore for debt repayment improving financial leverage from the elevated 1.02x debt-to-equity ratio, and substantial ₹28.00 crore for working capital requirements supporting operational scale-up.

- General Corporate Purposes: Supporting business operations and strategic initiatives in the competitive textile dyes manufacturing sector.

Financial Performance of Shlokka Dyes

• Revenue: ₹103.45 crore for FY25, showing strong growth of 68% from ₹61.69 crore in FY24, though the revenue had declined sharply in FY24 from ₹8.80 crore in FY23 indicating business inconsistency concerns.
• Net Profit: ₹10.01 crore in FY25, representing exceptional growth of 104% from ₹4.92 crore in FY24, demonstrating substantial operational leverage and margin expansion benefits in the reactive dyes manufacturing business.
• Financial Metrics: Exceptional ROE of 36.82%, strong ROCE of 36.14%, elevated debt-to-equity ratio of 1.02, healthy PAT margin of 9.68%, solid EBITDA margin of 18.05%, price-to-book value of 5.04x, and an estimated market capitalisation of ₹194.82 crore.