Sihora Industries Makes Modest Debut with 1.06% Premium, Lists at ₹66.70 Against Weak Subscription

Sihora Industries Limited, a manufacturer of narrow woven fabrics, lace, digitally printed fabrics, woven labels, tapes, zippers, and elastics with an integrated manufacturing facility in Surat covering yarn processing, weaving, digital printing, embroidery, dyeing, and finishing, made a modest debut on BSE SME on October 17, 2025. After closing its IPO bidding between October 10-14, 2025, the company commenced trading with a 6.06% premium opening at ₹70 but moderated to ₹66.70 with gains of just 1.06%.

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Sihora Industries Listing Details

Sihora Industries Limited launched its IPO at ₹66 per share with a minimum investment of 4,000 shares costing ₹2,64,000. The IPO received weak response with a subscription of just 1.27 times - retail investors at 1.37 times and NII at 1.18 times.

First-Day Trading Performance Outlook

• Listing Price: Sihora Industries share price Opened at ₹70 representing a premium of 6.06% from the issue price of ₹66, but quickly moderated to ₹66.70, delivering minimal gains of just 1.06% for investors reflecting cautious market sentiment towards the textile sector.

Growth Drivers and Challenges

Growth Drivers:

• Integrated Manufacturing: End-to-end textile manufacturing facility in Surat covering yarn processing, weaving, digital printing, embroidery, dyeing, and finishing processes combining modern technology with traditional craftsmanship for quality production.
• Diversified Product Portfolio: Comprehensive range including lace, rapier looms (converted into label looms), needle looms, zippers, elastic, PP-FDY Niwar Tape, and technical specialized zippers catering to fashion and industrial textile requirements.
• Strong Financial Performance: Impressive PAT growth of 214% to ₹1.87 crore and revenue growth of 30% to ₹15.06 crore in FY25, exceptional ROE of 35.60%, strong ROCE of 31.93%, healthy PAT margin of 12.86%, and solid EBITDA margin of 22.61%.

Challenges:

• Aggressive Valuation Metrics: Post-issue P/E of 32.77x appearing aggressively priced, price-to-book value of 4.68x, tiny paid-up equity capital of ₹5.33 crore indicating longer gestation period for migration to the main board representing a "High Risk/No Return" proposition.
• Limited Scale Operations: Extremely small revenue base of ₹15.06 crore, tiny equity capital post-IPO, elevated debt-to-equity ratio of 0.98, and operating in a highly competitive and fragmented textile products segment requiring significant scaling.

Utilisation of IPO Proceeds

• Capacity Expansion: ₹2.00 crore for capital expenditure towards purchase of additional plant and machinery expanding production capabilities in narrow woven fabrics and related products.
• Debt Reduction and Working Capital: ₹2.58 crore for debt repayment improving financial leverage from the 0.98x debt-to-equity ratio, and ₹3.50 crore for additional working capital requirements supporting operational scale-up.
• General Corporate Purposes: ₹1.55 crore supporting business operations and strategic initiatives in the competitive textile products manufacturing sector.

Financial Performance of Sihora Industries

• Revenue: ₹15.06 crore for FY25, showing steady growth of 30% from ₹11.62 crore in FY24, reflecting increasing market demand for narrow woven fabrics and textile products.
• Net Profit: ₹1.87 crore in FY25, representing exceptional growth of 214% from ₹0.60 crore in FY24, demonstrating substantial operational leverage and margin expansion benefits in the textile manufacturing business.
• Financial Metrics: Exceptional ROE of 35.60%, strong ROCE of 31.93%, elevated debt-to-equity ratio of 0.98, healthy PAT margin of 12.86%, solid EBITDA margin of 22.61%, price-to-book value of 4.68x, and an estimated market capitalisation of ₹35.53 crore (marginally higher than the ₹35.16 crore pre-listing estimate due to the modest premium).