Vama Wovenfab SME IPO

Strengths · 8

• 01Sales have grown extraordinarily fast, from Rs 27.87 crore in FY2024 to Rs 77.76 crore in FY2025 and Rs 214.62 crore in FY2026.
• 02Profit has grown from Rs 2.63 crore in FY2024 to Rs 6.84 crore in FY2025 and Rs 11.55 crore in FY2026.
• 03EBITDA has more than tripled over the same period, from Rs 5.10 crore to Rs 17.86 crore.
• 04Return ratios are very high, with RoNW of 50.37% and RoCE of 31.94%.
• 05The issue is priced at about 15.33 times earnings on an EPS of Rs 22.25.
• 06Its bags go into many different industries, from agriculture and food to cement, fertilisers, chemicals and construction, so demand is not tied to one sector.
• 07The facility processes recycled material alongside fresh polymer, which helps on both cost and sustainability.
• 08The whole issue is fresh capital, with Rs 8.61 crore going into a new shed and machinery and Rs 26.50 crore into working capital.

Risks · 10

• 01The growth is extremely fast and from a very small base. Sales went up nearly eight times in two years, from Rs 27.87 crore to Rs 214.62 crore, which is difficult to sustain and should be understood from the RHP.
• 02The profit margin is thin at 5.38%. Sales of Rs 214.62 crore produced only Rs 11.55 crore of profit.
• 03Borrowing was Rs 25.44 crore against a net worth of Rs 28.69 crore, a debt to equity ratio of 0.89, and it has more than doubled in two years.
• 04A part of the revenue comes from trading plastic granules rather than manufacturing, which earns a lower margin.
• 05Woven sacks are close to a commodity product where buyers switch on price, and there are many manufacturers in this trade.
• 06The sales network is narrow, covering four states and two union territories as of FY2024-25.
• 07The whole business runs from a single unit at Daman, so there is single location risk.
• 08The raw material is polymer, whose price follows crude oil.
• 09Promoter holding will come down from 100% to 72% after the issue.
• 10This is an SME issue. One lot is 400 shares, which is about Rs 1.36 lakh at the upper band of Rs 341, and SME shares usually trade in low volume after listing.

Vama Wovenfab Ltd was started in 2011. It makes woven sack bags and fabric products from polypropylene and high density polyethylene. Woven sacks are the strong plastic bags used to pack and move bulk material such as grain, cement and fertiliser.

Its range covers woven sack bags, coloured woven fabric sheets, loop handle bags, HDPE trampolines and other woven packaging made to a customer's own specification. It also trades in plastic granules, which are the raw material for this kind of manufacturing.

The company supplies customised bulk packaging to business customers across many industries, including agriculture, food and beverages, cement, fertilisers, chemicals, sugar, construction, retail and bulk packaging and logistics. Its manufacturing unit is at Daman and its facility also processes recycled material to make better use of resources. As of FY2024-25 its sales network covered four states and two union territories, with distribution across Maharashtra, Gujarat and Daman.

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