Shree Ram Twistex IPO Makes Dismal Debut with 32.69% Discount, Lists at ₹70 Despite Strong 43.66x Subscription

Shree Ram Twistex Ltd, a company engaged in manufacturing cotton yarns including Compact Ring Spun and Carded Yarns both Combed and Carded used in knitting and weaving for various products such as denim, terry towels, shirting, sheeting, sweaters, socks, bottom wear, home textiles, and industrial fabrics also offering value-added yarns like Eli Twist, Compact Slub Yarns, and Lycra-Blended Yarns operating on business-to-business (B2B) model, made a dismal debut on BSE and NSE on Monday, March 2, 2026. After closing its IPO bidding between February 23-25, 2026, the company commenced trading with a massive discount of 32.69% opening at ₹70.00, touched low of ₹67.00 and trading around ₹69.40.

Shree Ram Twistex Listing Details

Shree Ram Twistex launched its IPO at ₹104 per share with minimum investment of 144 shares costing ₹14,976. The IPO received strong response with subscription of 43.66 times - retail investors at 76.63 times, NII at 220.30 times, QIB weakly subscribed at only 3.94 times, total applications of 5,63,223 indicating massive retail and NII participation despite analyst warning to skip this exorbitantly priced and dicey offer noting higher margins from FY24 raising concerns in highly competitive and fragmented cotton yarn segment.

First-Day Trading Performance

Listing Price: Shree Ram Twistex opened at ₹70.00 representing massive discount of 32.69% from issue price of ₹104.00, touched low of ₹67.00 (down 35.58%), trading around ₹69.40 (down 33.27%), with VWAP at ₹69.98, reflecting extremely negative market sentiment with catastrophic opening discount creating devastating investor losses despite strong subscription with turnover of ₹91.04 lakh, traded volume of 1.30 lakh shares, delivery of 100%, and market capitalisation declining to ₹277.43 crore against pre-IPO market cap of ₹415.74 crore representing erosion of over ₹138 crore in investor wealth.

Growth Drivers and Challenges

Growth Drivers:

Integrated Manufacturing Infrastructure: Fully integrated spinning infrastructure with modern technologies comprising 17 compact ring-spinning machines with 27,744 spindles at Gondal facility supported by five warehouses with combined storage capacity of 9,855 MT ensuring efficient production and storage capabilities.

Diversified Product Portfolio: Wide range of cotton yarns including Compact Ring Spun, Carded Yarns, Eli Twist, Compact Slub Yarns, and Lycra-Blended Yarns catering to diverse applications from denim and shirting to home textiles and industrial fabrics serving textile manufacturers, garment exporters, and fabric processors.

Geographic Reach: Pan-India presence across Gujarat, Rajasthan, West Bengal, Maharashtra, Tamil Nadu, Madhya Pradesh, Punjab, and Dadra and Nagar Haveli with international export capabilities demonstrating established distribution network and customer relationships.

Renewable Energy Focus: IPO proceeds allocation for 6.1 MW solar power plant and 4.2 MW wind power plant for captive use reducing power costs and enhancing sustainability profile.

Challenges:

Catastrophic Listing: Despite 43.66x subscription, opening discount of 32.69% creating devastating investor losses highlighting severe disconnect between subscription frenzy driven by retail/NII and actual institutional assessment with QIB at only 3.94x signaling informed investor caution.

Exorbitant Pricing: Analyst warned issue appears exorbitantly priced at post-IPO P/E of 29.69x recommending to skip this pricey and dicey offer with higher margins from FY24 raising concerns over sustainability in highly competitive cotton yarn segment.

Competitive Segment: Operating in highly competitive and fragmented cotton yarn manufacturing segment with multiple established players limiting pricing power and margin sustainability.

Modest Profitability: RoNW of only 9.05%, ROCE of 10.74%, debt-to-equity of 0.75, total borrowings of ₹60.70 crore indicating moderate financial position with promoter holding declining from 47.07% to 34.59% post-IPO.

Utilisation of IPO Proceeds

Working Capital: ₹44.00 crore for funding working capital requirements representing largest allocation supporting cotton yarn manufacturing operations.

Wind Power Plant: ₹39.00 crore for setting up 4.2 MW wind power plant for captive use reducing power costs.

Debt Repayment: ₹14.89 crore for repayment/prepayment of certain borrowings strengthening balance sheet.

Solar Power Plant: ₹7.35 crore for setting up 6.1 MW solar power plant for captive use enhancing renewable energy infrastructure.

Financial Performance

Revenue: ₹132.27 crore for H1 FY26, ₹256.32 crore for FY25, growth from ₹231.72 crore in FY24 and ₹213.58 crore in FY23, reflecting steady expansion in cotton yarn manufacturing and B2B sales operations across domestic and export markets.

Net Profit: ₹7.00 crore in H1 FY26, ₹8.00 crore in FY25, growth from ₹6.55 crore in FY24 and ₹2.05 crore in FY23, demonstrating improving profitability with post-IPO EPS of ₹3.50 and P/E of 29.69x.