Sonaselection India IPO

Strengths · 8

• 01Sales have grown more than four times in two years, from Rs 121.31 crore in FY2024 to Rs 316.47 crore in FY2025 and Rs 517.60 crore in FY2026.
• 02Profit has grown strongly, from Rs 13.10 crore in FY2024 to Rs 18.56 crore in FY2025 and Rs 34.02 crore in FY2026.
• 03EBITDA has tripled over the same period, from Rs 28.49 crore to Rs 84.77 crore.
• 04Return on net worth is high at 39.05%, with RoCE of 19.69%.
• 05The issue is priced moderately at about 16.53 times earnings on an EPS of Rs 5.99.
• 06The installed processing capacity of 82.44 million metres a year is substantial for a company of this size.
• 07Running both its own manufacturing and job work processing means the plant can be kept busy even when its own order book is light.
• 08The whole issue is fresh capital, with Rs 80 crore repaying borrowings and the rest going into plant and machinery at the Bhilwara facility.

Risks · 8

• 01Debt is very high. Total borrowing was Rs 258.24 crore against a net worth of Rs 104.16 crore as on 31 March 2026, a debt to equity ratio of 2.48, and it has risen every year from Rs 144.60 crore in FY2024.
• 02The company is very young. It was set up only in February 2022, so it has under five years of history and has not been tested through a textile downturn.
• 03The profit margin is thin at 6.58%.
• 04Even after using Rs 80 crore of the issue to repay borrowings, a large loan will remain on the books.
• 05Dyeing and finishing uses a lot of water and produces effluent, so the company carries pollution control and environmental compliance risk.
• 06The entire operation is at one facility in Bhilwara, so there is single location risk.
• 07Cotton and yarn prices move sharply and cannot always be passed on to fabric buyers.
• 08Promoter holding will come down from 86.21% to 64.52% after the issue.

Sonaselection India Limited was set up in February 2022. It is an integrated fabric manufacturing and processing company, which means it both makes fabric and does the finishing work that turns raw cloth into a saleable product.

It manufactures 100% cotton fabric, cotton lycra or stretch fabric, cotton blends and polyester blends. It also processes fabric for others, covering 100% cotton, cotton blends, polyester viscose and polyester fabrics. The company started as a job work processor, that is doing finishing work on other people's cloth for a fee, and moved to a manufacturing led model after buying an established textile processing unit in 2022. It then commissioned its own cotton fabric processing plant in July 2024.

Its facility is at Bhilwara in Rajasthan, spread over about 49,540 square metres, with an installed processing capacity of 82.44 million metres a year. The main processes carried out there are bleaching, dyeing and finishing. It runs a mixed model of its own manufacturing along with job work processing, and handles quality control, grading, packing and outbound logistics to each customer's specification.

Interested in this IPO? Check the live subscription status or browse all upcoming mainboard IPOs.