| Price | Lot Size | Issue Date | Issue Size |
|---|---|---|---|
| ₹ 152 to ₹ 160 | 90 | 12th Aug, 2024 – 14th Aug, 2024 | ₹160.01 Cr |
About Saraswati Saree Depot Ltd IPO
Founded in 1966, Saraswati Saree Depot Ltd. (SSDL) has established itself as a leading player in the saree wholesale market in India. The company, which operates out of its expansive 169,120 sq. ft. complex in Uchgaon, Kolhapur, and a smaller unit in Ulhasnagar, specializes in the wholesale distribution of sarees and a range of other women’s apparel, including kurtis, lehengas, and bottoms. SSDL’s product catalog features over 300,000 SKUs sourced from more than 900 weavers across key Indian hubs such as Surat, Varanasi, and Kolkata. The company serves over 13,000 unique customers annually and achieved sales exceeding Rs. 600 crores in FY24. With its core business heavily focused on sarees, which account for over 90% of its revenue, SSDL has successfully adapted to evolving consumer preferences by emphasizing quality and premium offerings. The annual “Utsav” event, which contributes 13-15% to the company’s revenue, highlights its commitment to customer engagement and product excellence.
Objective of the Saraswati Saree Depot Ltd IPO
The company proposes to utilize the net proceeds towards the funding of the following objects:
- Funding working capital requirements of the company;
- General corporate purposes.
Rationale To Invest In Sarswati Saree Depot Ltd IPO
Robust supplier network and strategic bulk sourcing fuel the company’s market reach and competitive edge
Saraswati Saree Depot Ltd. (SSDL) has built strong connections with over 900 weavers and suppliers across major textile hubs in India, including Surat, Varanasi, Madurai, and Kolkata. This extensive network supports SSDL’s expansive product catalog, which features more than 300,000 unique SKUs, offering a wide variety of sarees and women’s apparel. The company has successfully diversified its customer base, with the top 10 customers contributing between 7.9% and 8.9% of total revenues over the past three fiscal years, showcasing a broad and varied clientele. Similarly, the top 10 suppliers account for 22.9% to 26.8% of total purchases, reflecting strong supplier relationships and a strategic approach to minimize dependency on any single source. Operating mainly in the southern and western regions of India – Maharashtra, Goa, Karnataka, and Tamil Nadu, SSDL served over 13,000 unique customers in FY24. By leveraging bulk purchasing, SSDL effectively optimizes costs, reduces supply chain risks, and secures better pricing. This strategy ensures a consistent inventory, competitive pricing, and a diverse product range, allowing the company to meet a wide array of customer needs and maintain a competitive edge.
Diverse product range enhances the company’s market position and customer appeal
Saraswati Saree Depot Ltd. offers an extensive and diverse product portfolio that includes over 300,000 unique SKUs spanning various categories of women’s apparel. The company’s core focus is on sarees, which are available in a wide range of styles and specifications. These sarees are categorized by occasion (casual, wedding, festive, party), fabric types (silk, cotton, georgette, and blends), weaves (Banarsi, Kanjivaram, Patola, and more), patterns (woven, printed, floral, geometric), and ornamentations (zari, sequins, floral embroidery). This extensive categorization allows SSDL to cater to a broad spectrum of customer preferences and ensures that there is a suitable option for every occasion and style. In addition to its comprehensive saree collection, SSDL also offers a variety of other women’s apparel, including kurtis, dress materials, blouse pieces, lehengas, bottoms, and various accessories. This wide range of products helps the company to mitigate the risk of over-reliance on any single product category and strengthens its competitive edge by providing a broad selection to its customers. By offering such a diverse product range, SSDL meets the evolving demands of its clientele and maintains its position as a versatile and comprehensive supplier in the women’s apparel market
Valuation of Sarswati Saree Depot Ltd IPO
Saraswati Saree Depot Ltd. operates a distinctive B2B saree wholesale model, offering an extensive range of over 300,000 SKUs sourced from more than 900 weavers to a network of over 13,000 semi-wholesalers and retailers. The company’s core business focuses heavily on sarees, which generate more than 90% of its revenue. Recently, SSDL has diversified its product offerings to include kurtis, dress materials, and branded men’s suiting and shirting, which now contribute to the remaining revenue. Financially, SSDL has demonstrated robust growth over the past three fiscal years. In FY22, the company reported a revenue of Rs. 5,496 million and a net profit of Rs. 123 million. This grew to Rs. 6,109 million in revenue and Rs. 296 million in net profit in FY24. The company reported a healthy ROCE of 64.5% in FY24 and reduced its borrowings to Rs. 435 million in FY24 from Rs. 666 million in FY22. The company has maintained positive growth in both revenue and profit, with current EPS of Rs. 8.9. Given the company’s strategic focus on strengthening inventory management, expanding into men’s ethnic wear, and enhancing its e-commerce presence, we remain optimistic on the company’s growth prospects. Considering its reasonable valuation with a P/E of 17.9x based on FY24 earnings, we recommend a “SUBSCRIBE” rating to the issue from a medium to long-term perspective.
What is the Saraswati Saree Depot Ltd. IPO?
Saraswati Saree Depot IPO is a book built issue of Rs 160.01 crores. The issue is a combination of fresh issue of 0.65 crore shares aggregating to Rs 104.00 crores and offer for sale of 0.35 crore shares aggregating to Rs 56.02 crores.
How to apply for the Saraswati Saree Depot Ltd. IPO through Stoxbox?
To apply for the Saraswati Saree Depot Ltd. IPO through StoxBox one can apply from the website and also from the app. Click here
When will the Saraswati Saree Depot Ltd. IPO open?
Saraswati Saree Depot Ltd. IPO is opening on 12th August 2024.
What is the lot size of the Saraswati Saree Depot Ltd. IPO?
The Lot Size of Saraswati Saree Depot Ltd. IPO is 90 equity shares
When is the Saraswati Saree Depot Ltd. IPO allotment date?
The allotment Date for Saraswati Saree Depot Ltd. IPO is 16th August 2024
When is the Saraswati Saree Depot Ltd. IPO listing date?
The listing Date for Saraswati Saree Depot Ltd. IPO is 20th August 2024
What is the minimum investment required for the Saraswati Saree Depot Ltd. IPO?
In the Retail segment the minimum investment required is Rs. 14,400
What is the maximum investment allowed for the Saraswati Saree Depot Ltd. IPO?
In the Retail segment the maximum investment requirement is Rs. 187,200
What are the risks associated with investing in the Saraswati Saree Depot Ltd. IPO?
- Vulnerability due to high dependence on saree sales: The company’s heavy reliance on saree sales, which account for over 90% of its revenue, makes it highly susceptible to fluctuations in demand and changes in consumer preferences, with the risk that any failure to anticipate or adapt to these shifts could result in reduced sales, obsolete inventory, pricing pressures, and a negative impact on its financial performance and operational stability.
- Competitive market: Saraswati Saree Depot Ltd. faces intense competition in the largely unorganized saree market, with threats from both regional players and larger brands. The company’s focus on women’s apparel, which makes up 40% of the market, exposes it to risks from changing consumer preferences and market trends, potentially impacting its profitability and market share.
When will the Saraswati Saree Depot Ltd. IPO shares be credited to my Demat account?
The Saraswati Saree Depot Ltd. IPO be credited to the account on allotment date which is 19th August 2024
Where can I find the Saraswati Saree Depot Ltd. IPO prospectus?
The prospectus of Sanstar IPO prospectus can be find on the website of SEBI, NSE and BSE
What are the important dates related to the Saraswati Saree Depot Ltd. IPO?
| IPO Open Date | Monday, August 12, 2024 |
|---|---|
| IPO Close Date | Wednesday, August 14, 2024 |
| Basis of Allotment | Friday, August 16, 2024 |
| Initiation of Refunds | Monday, August 19, 2024 |
| Credit of Shares to Demat | Monday, August 19, 2024 |
| Listing Date | Tuesday, August 20, 2024 |
| Cut-off time for UPI mandate confirmation | 5 PM on August 14, 2024 |
