Fascinate Textiles
A distinct read of SME-specific danger (liquidity, concentration, forensic flags) — separate from the FinMinutes Score. Higher band = more caution warranted.
- Worsening negative operating cash flows (Rs -10.87 Cr CFO in FY26) despite skyrocketing paper profits (Rs 15.10 Cr PAT)
- Severe working capital lockup with trade receivables rising to Rs 35.28 Cr and inventories reaching Rs 48.13 Cr
- Significant revenue routing through promoter-controlled entities (Arihant Fashion and Karnika Industries)
- Systemic compliance delays, including a 647-day delay in filing statutory auditor appointments with the ROC
- Recent auditor transition to meet peer-review requirements
Educational risk signal grounded in the filing — not a buy/sell call.
First time with SME IPOs? Read the SME IPO guide and the risks before applying.
FinMinutes Deep Business Model & Edge
Fascinate Textiles Limited is an Indian MSME specializing in the manufacturing of readymade garments across urban and semi-urban markets.
What this company actually does — full breakdown ▾
Fascinate Textiles Limited was originally incorporated on February 09, 2017, as 'Fascinate Textiles Private Limited' in Kolkata, West Bengal. Its registered office is located at 3/A Kutul Sahi Road, Barasat, North 24 Parganas, West Bengal. The company specializes in the manufacturing of readymade garments, spanning both urban and semi-urban markets. It currently operates a manufacturing infrastructure facility and proposes to set up an additional manufacturing facility through the purchase of new sewing and other machinery. Since its incorporation, the company has not experienced any time or cost overruns in setting up projects. Its operations are delivered directly to retail and wholesale buyers across its target markets. As of the date of the Red Herring Prospectus, the company has 18 shareholders and is managed by Mr. Vishal Nahar as Managing Director.
Track record in manufacturing of readymade garments and wide distribution reach spanning both urban and semi-urban markets.
The Offer
Follow the Money — Use of Proceeds
- Funding the working capital requirements — ₹25.15 cr
- Prepayment and repayment of all or a portion of certain secured and unsecured loan — ₹2.68 cr
- Funding Capital Expenditure requirement towards setting up additional manufacturing facility — ₹12.35 cr
- General Corporate Purposes
Valuation at the Offer Price
The filing does not print a single headline multiple, so this one is ours: the upper band divided by the latest restated earnings per share — the same arithmetic the “Basis for the Offer Price” section performs. It is struck on pre-issue earnings; where the issue creates new shares, the post-issue multiple is computed in the workings below. This filing names no comparable listed peer, so there is no peer table and no relative multiple on this page. We would rather say that than assemble a peer set the issuer did not stand behind.
FinMinutes IPO Score — How It's Built
Transparent, deterministic, computed from the filing — not an opinion. Open any component below to see exactly what it measures and what it is worth. Components with no disclosed input are dropped from the weighting entirely rather than held at an invented neutral, because a constant inside a weighted average is not neutral — it quietly drags every score toward the middle. Weighted across 4 live components.
70% of the designed weighting had real data behind it on this issue. Not yet scored here: Anchor Quality, Valuation Vs Peers. A lower coverage figure does not mean a worse company — it means we are standing behind less of the picture, and you should read the findings below rather than the headline number.
How this is measured12%
Whether fresh capital actually enters the business. A predominantly offer-for-sale issue is marked down ONLY when the financials are weak. A profitable, cash-rich company selling down is treated as neutral, not penalised, because it does not need the money.
How this is measured32%
Driven by the models battery run on the filing's own restated numbers: the Piotroski fundamental tests (scored out of those we could actually run), the Altman Z-double-prime solvency zone, and the direction of profit across the disclosed period. It is not a single yes/no on last year's profit.
How this is measured6%
A proxy for syndicate strength, based today only on how many lead managers are on the issue: 75 where three or more banks are involved, 60 otherwise. We have not built a bank-by-bank track record, so treat this as a rough signal. When the filing does not disclose the syndicate, this component is dropped from the weighting rather than guessed.
How this is measured28%
Starts at 100 and loses points for every material finding: 12 for a flagged finding, 4 for a noted one. Two kinds feed it. DERIVED findings are computed from the filed numbers against stated thresholds — operating cash negative while profit is positive, related-party revenue above 15% of total, revenue rising while profit falls, goodwill above 30% of net worth, receivables growing more than 1.3x faster than sales, cash below half of short-term debt. Those are reproducible: the same filing gives the same answer every time, and the rule is printed beside the finding. READ findings come from the forensic sweep of the notes. Contingent liabilities, related-party intensity, customer concentration, litigation, auditor qualifications, statutory dues, promoter funding. Findings that record the ABSENCE of a problem — no litigation pending, an unmodified audit opinion — deduct nothing. This is the component our forensic read drives directly, and it moves most between companies.
3-Year Financial & Growth Trend
| Metric | FY26 | FY25 | FY24 |
|---|---|---|---|
| Revenue (₹ Cr) | 117.0869 | 60.2473 | 28.8802 |
| Net Profit (₹ Cr) | 15.097 | 5.8111 | 0.4778 |
| PAT Margin | 12.89% | 9.65% | 1.65% |
Market Context
NOT part of the FinMinutes ScoreThe Score above is what the filing says. Everything in this box is what the crowd says. We keep them apart on purpose — every other site blends the two and calls the result a rating. Demand is real information, but it is information about the market, not about the company, and it changes by the hour while the company does not.
Demand and our read of the filing are broadly in the same territory.
Subscription is low early in a book and high at the end, because most bids arrive in the final hours. A number read on day one says more about the clock than the company — which is precisely why it is not in the Score. GMP is unofficial, unregulated, and easily moved. Neither is a recommendation.
Applying, and Who Handles the Allotment
Check allotment status on the registrar’s own portal → We link the registrar directly rather than mirroring the form.
Deep Financials
Revenue, EBITDA and profit are what every listing site prints. Below are the full restated statements as disclosed, the ratios we compute from them, and a DuPont decomposition of the return on equity. A prospectus carries three years, not ten — that is the document’s ceiling, and within it we go as deep as it allows.
Income StatementThe profit and loss as filed, then what we derive from it — kept apart.
Statutory order, exactly as restated in the filing. Finance cost and depreciation sit inside Total Expenses under Ind AS, which is why they are listed among the expense lines here rather than below the total. The expense rows sum to the total. Rows the filing does not disclose separately are omitted rather than left blank.
| Income Statement — as filed (₹ Cr) | FY26 | FY25 | FY24 |
|---|---|---|---|
| Revenue from Operations | 117.09 | 60.25 | 28.88 |
| Other Income | 0.14 | 0.03 | 0.02 |
| Total Income | 117.23 | 60.28 | 28.90 |
| Cost of Materials Consumed | 95.07 | 38.86 | 23.80 |
| Employee Benefit Expense | 4.49 | 3.11 | 1.71 |
| Finance Cost | 2.30 | 1.63 | 0.94 |
| Depreciation & Amortisation | 0.59 | 0.52 | 0.30 |
| Other Expenses | 14.89 | 11.06 | 6.08 |
| Total Expenses | 95.88 | 52.19 | 28.26 |
| Profit Before Tax | 21.34 | 8.08 | 0.64 |
| Tax Expense | 6.25 | 2.27 | 0.16 |
| Profit After Tax | 15.10 | 5.81 | 0.48 |
| EPS - Basic | 14.66 | 5.68 | 0.47 |
| EPS - Diluted | 14.66 | 5.68 | 0.47 |
Below this line the figures are ours, not the filing's. Ind AS has no EBITDA or EBIT line. We reconstruct them from disclosed items — EBIT as profit before tax plus finance cost, less any exceptional item and share of associate profit sitting below the operating line; EBITDA as EBIT plus depreciation. The working is in the Formula Notebook.
| Derived by us (₹ Cr) | FY26 | FY25 | FY24 |
|---|---|---|---|
| EBITDA | 24.15 | 10.01 | 1.68 |
Balance SheetWhat the company owns, owes, and is worth on paper.
| Balance Sheet (₹ Cr) | FY26 | FY25 | FY24 |
|---|---|---|---|
| Share Capital | 10.30 | 1.41 | 1.41 |
| Reserves & Surplus | 21.14 | 9.04 | 3.05 |
| Net Worth | 31.44 | 10.45 | 4.45 |
| Long-term Borrowings | 6.02 | 5.28 | 3.82 |
| Short-term Borrowings | 20.00 | 12.93 | 8.52 |
| Total Borrowings | 26.02 | 18.21 | 12.33 |
| Trade Payables | 27.29 | 10.16 | 7.54 |
| Current Liabilities | 55.24 | 26.50 | 17.18 |
| Total Liabilities | 92.75 | 42.26 | 25.45 |
| Property, Plant & Equipment | 5.55 | 5.64 | 2.73 |
| Capital Work in Progress | 0.00 | 0.00 | 3.01 |
| Intangible Assets | 0.00 | 0.00 | 0.00 |
| Investments | 0.00 | 0.00 | 0.00 |
| Inventories | 48.13 | 15.47 | 12.70 |
| Trade Receivables | 35.28 | 17.33 | 5.34 |
| Cash & Equivalents | 0.82 | 0.73 | 0.25 |
| Current Assets | 87.14 | 36.54 | 19.58 |
| Total Assets | 92.75 | 42.26 | 25.45 |
Cash FlowWhere the cash actually went. Often the most honest statement of the three.
| Cash Flow (₹ Cr) | FY26 | FY25 | FY24 |
|---|---|---|---|
| Net Cash from Operating Activities | -10.87 | -3.58 | -3.62 |
| Capital Expenditure | 0.49 | 0.42 | 2.81 |
| Net Cash from Investing Activities | -0.46 | -0.37 | -2.67 |
| Net Cash from Financing Activities | 11.42 | 4.43 | 6.22 |
| Net Change in Cash | 0.09 | 0.48 | -0.08 |
Ratio AnalysisProfitability, leverage, liquidity, efficiency and earnings quality — computed by us.
Every ratio below is computed by us from the line items the company disclosed — not copied from anywhere. The arithmetic is standard; the point is that somebody actually did it. Blank cells mean the filing did not disclose the inputs, and we would rather show a gap than invent a number.
| Ratio | FY26 | FY25 | FY24 |
|---|---|---|---|
| Profitability | |||
| EBITDA Margin (%) | 20.6 | 16.6 | 5.8 |
| EBIT Margin (%) | 20.2 | 16.1 | 5.4 |
| PAT Margin (%) | 12.9 | 9.6 | 1.7 |
| Return on Equity (%) | 48 | 55.6 | 10.7 |
| Return on Capital Employed (%) | 41.1 | 33.9 | 9.4 |
| Return on Assets (%) | 16.3 | 13.8 | 1.9 |
| Leverage | |||
| Debt / Equity (x) | 0.83 | 1.74 | 2.77 |
| Net Debt / EBITDA (x) | 1.04 | 1.75 | 7.17 |
| Interest Coverage (x) | 10.3 | 5.96 | 1.68 |
| Liquidity | |||
| Current Ratio (x) | 1.58 | 1.38 | 1.14 |
| Quick Ratio (x) | 0.71 | 0.8 | 0.4 |
| Efficiency | |||
| Asset Turnover (x) | 1.26 | 1.43 | 1.13 |
| Receivable Days | 110 | 105 | 67 |
| Inventory Days | 150 | 94 | 161 |
| Payable Days | 85 | 62 | 95 |
| Cash Conversion Cycle (days) | 175 | 137 | 133 |
| Quality of Earnings | |||
| Operating Cash Flow / PAT (x) | -0.72 | -0.62 | -7.58 |
| Accruals Ratio (%) | 28 | 22.2 | 16.1 |
| Capex / Depreciation (x) | 0.84 | 0.81 | 9.36 |
DuPont DecompositionWhy the return on equity is what it is: margin, efficiency, or leverage.
A headline return on equity tells you what. The DuPont decomposition tells you why — whether the return is earned through margin, through asset efficiency, or simply through leverage. Two companies can post an identical ROE for opposite reasons, and only one of them is safe.
| Component | FY26 | FY25 | FY24 |
|---|---|---|---|
| Net Margin (PAT / Revenue) | 12.9% | 9.6% | 1.7% |
| Asset Turnover (Revenue / Assets) | 1.26x | 1.43x | 1.13x |
| Equity Multiplier (Assets / Net Worth) | 2.95x | 4.05x | 5.71x |
| = Return on Equity | 48% | 55.6% | 10.7% |
| Tax Burden (PAT / PBT) | 0.71x | 0.72x | 0.75x |
| Interest Burden (PBT / EBIT) | 0.9x | 0.83x | 0.4x |
| Operating Margin (EBIT / Revenue) | 20.2% | 16.1% | 5.4% |
Computed from the disclosed statements. Where the filing omits an input, the row is left blank rather than estimated.
Quality of EarningsWhat the statements say when you read them against each other.
What the statements say once you read them against each other. These are observations, not verdicts — every one is arithmetic on the numbers the company itself disclosed, and each is stated so you can go and check it in the filing.
- In FY26 the company reported a profit of 15.10 cr while operating cash flow was NEGATIVE at -10.87 cr. Reported earnings did not convert into cash. This is the single divergence most worth understanding in any set of accounts, and the filing is the place to look for why.
- Receivable days rose from 67 in FY24 to 110 in FY26. The company is booking revenue faster than it is collecting it, which ties up cash and raises the question of who is not paying.
- Between FY24 and FY26 revenue grew 305% while profit grew 3060%. Profit expanding at several times the rate of revenue is not automatically a concern — operating leverage does exactly this — but it is worth confirming from the filing whether the gap comes from genuine margin expansion or from one-off items.
- Interest coverage was 10.3x in FY26. Debt servicing is comfortably covered by operating profit.
Forensic ModelsBeneish, Altman and Piotroski — plus our own final-year check.
Beneish M-Score
7 of 8 inputsAn eight-variable model built to detect earnings manipulation, and built to run on exactly two consecutive years — which is what a prospectus gives us. It belongs here more than anywhere: a company about to list has the maximum possible incentive to have dressed up the very years it is about to show you. A score above −1.78 is the threshold at which the model says the accounts merit a closer look. It is a screening signal, not an accusation, and it was calibrated on listed companies elsewhere. Read the eight components, not just the total.
| Component | Value | What it captures |
|---|---|---|
| DSRI Days Sales in Receivables Index (Receivables_t / Sales_t) / (Receivables_t-1 / Sales_t-1) | 1.047 | Above 1 means receivables grew faster than sales. Revenue may be being recognised ahead of collection. |
| GMI Gross Margin Index GrossMargin_t-1 / GrossMargin_t | 1.888 | Above 1 means margins deteriorated. A firm with worsening prospects has more incentive to manipulate. |
| AQI Asset Quality Index AQ_t / AQ_t-1, where AQ = 1 - (CurrentAssets + PPE) / TotalAssets | — | Above 1 means a rising share of assets is soft (neither current nor fixed) — capitalised costs can hide here. |
| SGI Sales Growth Index Sales_t / Sales_t-1 | 1.943 | Growth is not manipulation. But high-growth firms face more pressure to keep the streak going. |
| DEPI Depreciation Index DepRate_t-1 / DepRate_t, where DepRate = Dep / (Dep + PPE) | 0.877 | Above 1 means assets are being depreciated more slowly — a quiet way to lift reported profit. |
| SGAI SG&A Index (SGA_t / Sales_t) / (SGA_t-1 / Sales_t-1), SGA proxied as employee cost + other expenses | 0.704 | A proxy, because filings rarely break out SG&A cleanly. Read it as a direction, not a precise figure. |
| LVGI Leverage Index Leverage_t / Leverage_t-1, where Leverage = (CurrentLiab + LongTermDebt) / TotalAssets | 0.878 | Above 1 means leverage rose. Debt covenants create pressure to hit numbers. |
| TATA Total Accruals to Total Assets (PAT - CashFromOperations) / TotalAssets | 0.28 | The gap between reported profit and cash generated. The single heaviest term in the model — and the one that catches profit that never became cash. |
The filing does not disclose every input the model needs, so we withhold the composite score rather than substitute a guess. The components we could compute are above.
Altman Z″-Score (emerging markets)
Z″ = 8.32 · SafeA distress-prediction model. We use the Z″ variant deliberately: the original Z was calibrated on American manufacturers and misleads badly on Indian services companies. Above 2.6 is the safe zone, 1.1 to 2.6 is grey, below 1.1 is the distress zone. Like every model of its kind it is a screen, not a prophecy.
| X1 — Working Capital / Total Assets | 0.344 |
| X2 — Retained Earnings / Total Assets | 0.228 |
| X3 — EBIT / Total Assets | 0.255 |
| X4 — Net Worth / Total Liabilities | 0.339 |
| Z″ = 3.25 + 6.56·X1 + 3.26·X2 + 6.72·X3 + 1.05·X4 | 8.32 |
Piotroski F-Score (adapted)
4 / 8Nine yes-or-no tests of fundamental strength — except we run eight. One of the original nine asks whether the company issued new shares, which is plainly absurd to ask of a company whose entire purpose at this moment is to issue shares. We drop that test, and we would rather tell you that than quietly fudge it.
- ✓Positive return on assets
- ✗Positive operating cash flow
- ✓Return on assets improving
- ✗Cash flow exceeds profit (quality of earnings)
- ✓Long-term leverage decreasing
- ✓Current ratio improving
- ✗Gross margin improving
- ✗Asset turnover improving
The Final-Year Check
oursNot from any textbook. The hockey stick in the last year before a filing is the oldest pattern in this business, and nobody publishes it. So we measure it: how the final disclosed year compares with the years behind it. Real acceleration looks exactly the same on the page as a flattering one — which is precisely why it is worth naming rather than assuming either way.
- Cash conversion fell sharply in the final year: operating cash flow was -0.72x profit in FY26, against -0.62x in FY25. Profit rose; the cash behind it did not follow at the same rate.
Ratios Nobody Prints
- Contingent liabilities / Net worth: 0%
Contingent liabilities of 0.01 cr against a net worth of 31.44 cr — 0% of what the company is worth on paper. These are obligations that sit off the balance sheet but could land on it. What they consist of matters as much as the size: a corporate guarantee to a subsidiary is a different animal from a disputed tax demand, and the filing says which. - Related-party revenue / Total revenue: 3.3%
3.3% of revenue in FY26 came from entities connected to the promoters. Revenue you sell to yourself is not the same as revenue you won in the market. - Cash / Short-term borrowings: 0.04x
Short-term borrowings of 20.00 cr against cash of 0.82 cr. Debt that must be refinanced within a year is only comfortable while lenders stay comfortable. - Promoter remuneration / PAT: 1.6%
Managerial remuneration to the promoter group was 0.24 cr against a profit of 15.10 cr. This is a legitimate cost — but it is also a route by which value leaves a company before it ever reaches a minority shareholder.
The Formula NotebookEvery number above, with the working shown. Check us.
Every number we publish, with the working shown. The formula, the same formula with this company’s actual figures put into it, the answer, and what it is for. Check us. That is the point.
PAT ÷ Net Worth15.10 ÷ 31.44What the company earned on the money shareholders have in it. The headline measure of return — and the one the DuPont section takes apart.
EBIT ÷ (Net Worth + Total Borrowings)23.64 ÷ (31.44 + 26.02) = 23.64 ÷ 57.46Return on ALL the capital in the business, borrowed as well as owned. Unlike ROE, it cannot be flattered by taking on debt.
EBITDA ÷ Revenue24.15 ÷ 117.09Operating profitability before the effects of debt, tax and depreciation. What the business earns from the act of trading.
Total Borrowings ÷ Net Worth26.02 ÷ 31.44How much the company has borrowed against what it owns. High is not automatically bad — ask whether the borrowing is being serviced comfortably.
EBIT ÷ Finance Cost23.64 ÷ 2.30How many times over operating profit covers the interest bill. Below about 2x, a meaningful share of what the business earns is going to lenders rather than owners.
(Trade Receivables ÷ Revenue) × 365(35.28 ÷ 117.09) × 365How long the company waits to be paid. Rising receivable days mean revenue is being booked faster than it is collected — which is where a great many accounting problems begin.
Inventory Days + Receivable Days − Payable Days150 + 110 − 85How long cash is tied up in the operating cycle before it comes back. The longer it is, the more working capital the business must fund.
Cash from Operations ÷ PAT-10.87 ÷ 15.10Did the profit turn into cash? Profit is an opinion; cash is a fact. When this sits well below 1x for long, the two are drifting apart, and the filing is where you find out why.
(PAT − Cash from Operations) ÷ Total Assets(15.10 − -10.87) ÷ 92.75 = 25.97 ÷ 92.75The share of reported profit that exists on paper rather than in the bank. It is also the heaviest single term in the Beneish model, for good reason.
Price × Post-issue Shares₹151.00 × 13,760,900 sharesWhat the whole company is being valued at, if the issue prices at the top of the band.
Market Cap + Total Borrowings − Cash207.79 + 26.02 − 0.82What it would actually cost to buy the whole business: you take on its debt and you get its cash. This is the number a buyer cares about, and it is the reason a P/E on its own can mislead.
Enterprise Value ÷ EBITDA232.99 ÷ 24.15The multiple that includes debt. Two companies on the same P/E — one debt-free, one heavily borrowed — are not the same investment, and only this number tells you so.
Market Cap ÷ PAT207.79 ÷ 15.10The familiar multiple. Useful, but blind to debt — read it alongside EV/EBITDA, never instead of it.
EBIT × (1 − tax rate) ÷ (Net Worth + Debt − Cash)NOPAT ÷ Invested CapitalWhat the business earns on the capital actually at work in it. We do not compare this to a cost of capital: that would need a beta, an unlisted company has none, and inventing one would be theatre.
P/E ÷ trailing PAT growth (%)13.76 ÷ 159.8%PEG was designed for FORWARD growth. This one uses TRAILING growth, because that is all a prospectus gives us — and the final year before an IPO is very often the best year the company will have for a while. A low PEG here may say more about the timing of the filing than about the price. We show it because it was asked for; we show the growth denominator beside it so it cannot mislead you quietly.
Workspace
The numbers are already loaded. Move the offer price and watch every multiple move with it. Set your own growth and margin and see what they imply two years out. These are your assumptions, not our forecast — we have no view on what this company will earn, and the moment we published one we would be doing something we are not registered to do. What we can do is put the arithmetic in front of you and get out of the way.
Price defaults to the top of the band. Margin defaults to what the company actually reported in FY26.
Projections are arithmetic on the inputs you typed. They are not a forecast, not a recommendation, and not a view on whether this offer is worth taking. Educational only.
Institutional Alpha: DRHP Deep Dive
Aggressive Revenue and Profit Expansion Decoupled from Cash Realization
Fascinate Textiles reported nearly a 30-fold expansion in net profits to Rs 15.10 Cr in FY26. However, its operating cash flows deteriorated further to negative Rs -10.87 Cr. Working capital is heavily locked up in uncollected debtors (Rs 35.28 Cr) and inventory (Rs 48.13 Cr), representing a classic high-risk 'dressed bride' pre-IPO setup.
Source: p. 35, 36, 165Significant Related-Party Dependencies and Compliance Lapses
The company exhibits extreme reliance on promoter group entities, routing Rs 3.81 Cr of sales through Arihant Fashion and Rs 20.35 Cr through Karnika Industries in FY26. This dependency is accompanied by profound internal control and compliance lapses, including a 647-day delay in registering the statutory auditor's appointment with the ROC.
Source: p. 54, 55, 62, 315, 316Shareholding, Syndicate & Leadership
Leadership & Skin in the Game
Leadership: Mr. Vishal Nahar
Litigation: Direct Tax against Company: 1 case of Rs 0.0008 Cr (TDS demands u/s FY24-25 and Prior Years 17-18, 18-19). Promoters, Directors, Group Companies: Nil.
Auditor / RPT Flags: None disclosed
🔍 Forensic Findings — What the Footnotes Say
Findings from across the filing — the notes, MD&A, related-party disclosures, contingent liabilities, CARO and litigation, alongside the risk section itself. Each carries where it was found, so you can see which were buried and which were disclosed. Findings marked derived are computed from the filed numbers against a stated rule, shown beside them.
The company reported massive PAT growth to Rs 15.10 Cr in FY26 (up from Rs 5.81 Cr in FY25 and Rs 0.48 Cr in FY24) alongside revenue expanding to Rs 117.09 Cr. However, Cash Flow from Operations (CFO) collapsed to negative Rs -10.87 Cr in FY26 (compared to negative Rs -3.58 Cr in FY25 and Rs -3.62 Cr in FY24), driven by trade receivables ballooning to Rs 35.28 Cr and inventories swelling to Rs 48.13 Cr.
p. 35, 36, 165The company conducts material operations with promoter-controlled entities. It executed sales of Rs 3.81 Cr in FY26 to Arihant Fashion (a promoter-controlled entity that performs a core sales function) and has outstanding receivables of Rs 70.11 Lakhs. It also registered Rs 20.35 Cr of sales with Karnika Industries Ltd (promoter group entity) in FY26. Unsecured loan movements are active with promoters, with Narinder Kumar Ahuja holding a closing loan balance of Rs 26.91 Lakhs from the company.
p. 314, 315, 316The company has disclosed persistent delays in deposit of statutory dues and filings for GST, EPF, and ESIC. Furthermore, there were severe procedural and secretarial filing delays with the Registrar of Companies (ROC), including a 647-day delay in filing Form ADT-1 for the appointment of the statutory auditor, and delays in filing returns of allotment (Form PAS-3) ranging up to 31 days.
p. 54, 55, 62On August 12, 2025, one year prior to the offer, the company issued 88,31,394 bonus shares in a 6:1 ratio, which severely depressed the promoters' average acquisition costs to single digits (ranging from Rs 1.43 to Rs 5.55 per share). Additionally, on August 18, 2025, Vishal Nahar transferred 17,00,000 shares to Neetu Nahar by way of a gift.
p. 73, 136, 144, 146Statutory auditor was changed from M/s Soumen And Associates to M/s Jain Sonu & Associates on September 30, 2023, preceding the IPO.
p. 98Direct Tax against Company: 1 case of Rs 0.0008 Cr (TDS demands u/s FY24-25 and Prior Years 17-18, 18-19). Promoters, Directors, Group Companies: Nil.
p. 3, 14, 35, 36 and 2 moreOperating cash flow was negative ₹10.87 cr in FY26 while the company reported a profit after tax of ₹15.10 cr. Profit that does not arrive as cash has to be funded from somewhere else.
rule: CFO<0 & PAT>0Revenue grew, the related-party share of it grew, and operating cash flow fell, all in FY26. No one of these is evidence on its own. Together they are the pattern worth understanding before the other numbers on this page.
rule: sales↑ + RPT share↑ + CFO↓Short-term borrowings of ₹20.00 cr against cash of ₹0.82 cr. Debt that must be refinanced within a year is comfortable only while lenders stay comfortable.
rule: cash < 0.5x short-term debtCompany's Claims vs Reality
We stress-test each claim against the filing's own data.
While the company has scaled its top-line to Rs 117.09 Cr, its actual cash collection cycle is deteriorating, with operating cash flow collapsing to negative Rs -10.87 Cr in FY26. Furthermore, a substantial portion of its sales are routed through promoter group entities like Arihant Fashion and Karnika Industries, making the standalone business highly dependent on related-party channels.
p. 35, 36, 245, 316Live Subscription Status
Total subscription is fed live from the exchange data feed. The category split (QIB, NII, retail) is not carried by that feed and is added by hand where it is material — so it is shown only when we have actually verified it, rather than left as blanks.
Allotment Status
Check your allotment on the registrar's portal → Registrar: Cameo Corporate Services
Allotment is decided by the registrar, not by us and not by the exchange. In an oversubscribed retail book, allotment is by lottery, so a large application does not improve your odds beyond one lot. If money stays blocked after the refund date, the mandate expiry (30 Sep 2026) is the date to raise with your bank.
Analyst Q&A: Burning Questions
Facts from the filing. No recommendation — that layer arrives once our Research Analyst registration is live.
How are the Net Fresh Issue proceeds being utilized?
The net proceeds of the fresh issue are allocated towards funding incremental working capital requirements (Rs 25.15 Cr), capital expenditure for setting up an additional manufacturing facility (Rs 12.35 Cr), prepayment/repayment of certain secured and unsecured loans (Rs 2.68 Cr), and general corporate purposes.
p. 33, 34, 65, 66Who are the promoters and what is their cost of acquisition?
The promoters are Mr. Vishal Nahar, Mr. Chirag Ahuja, Mr. Rishabh Nahar, Mr. Narinder Kumar Ahuja, and Vishal Nahar HUF. Following a 6:1 bonus issue in August 2025, their average costs of acquisition per share are Rs 4.08, Rs 5.55, Rs 2.05, Rs 1.43, and Rs 5.55, respectively.
p. 83Are there material related party sales or loan balances?
Yes. The company routed Rs 3.81 Cr of sales in FY26 through promoter-controlled Arihant Fashion (with Rs 70.11 Lakhs outstanding receivable) and Rs 20.35 Cr through Karnika Industries Ltd. It also has outstanding borrowing balances of Rs 26.91 Lakhs from promoter Narinder Kumar Ahuja as of FY26.
p. 315, 316Does operating cash flow align with reported profitability?
No. Reported PAT increased to Rs 15.10 Cr in FY26, but Cash Flow from Operations was deeply negative at Rs -10.87 Cr. This mismatch is driven by uncollected bills (trade receivables reached Rs 35.28 Cr) and a massive inventory buildup of Rs 48.13 Cr.
p. 35, 36, 165What structural market parameters apply to this offer?
The offer consists of a Fresh Issue of up to 34,57,600 shares and an OFS of up to 8,36,000 shares on the NSE Emerge platform. Giriraj Stock Broking Private Limited acts as the market maker with up to 2,15,200 shares reserved. Minimum application lot size is 800 shares.
p. 3, 4, 37, 64, 89, 115, 263, 282, 352What Earlier Investors Paid
Early capital takes real risk and is fairly rewarded for it — a large multiple built over many years is normal. What deserves a closer look is a steep step-up in a short window: a round priced cheaply only months before the offer.
| Shareholder | Priced at | When | vs IPO price |
|---|---|---|---|
| Subscribers to MoA (Vikash Jain, Neetu Nahar, Bandana Nahar, Kanta Jain, Oindrila Chowdhury) | ₹10.00 | 2017-02-09 | 15.1x |
| An early round from roughly 10 years ago, at roughly 15.1x the offer price. A multiple of that size built over that long reflects the risk taken and the time elapsed. That is the normal reward for early capital, not a red flag. | |||
| Existing Shareholders | ₹10.00 | 2017-02-20 | 15.1x |
| An early round from roughly 10 years ago, at roughly 15.1x the offer price. A multiple of that size built over that long reflects the risk taken and the time elapsed. That is the normal reward for early capital, not a red flag. | |||
| Jishu Chowdhury, Neetu Nahar, Bandana Nahar | ₹15.00 | 2021-03-23 | 10.1x |
| An early round from roughly 6 years ago, at roughly 10.1x the offer price. A multiple of that size built over that long reflects the risk taken and the time elapsed. That is the normal reward for early capital, not a red flag. | |||
| Anil Singh Nahar (Takeover of Business of M/s. RA Fashion) | ₹24.00 | 2021-11-25 | 6.3x |
| An early round from roughly 5 years ago, at roughly 6.3x the offer price. A multiple of that size built over that long reflects the risk taken and the time elapsed. That is the normal reward for early capital, not a red flag. | |||
| Rishabh Nahar, Chirag Ahuja, Vishal Nahar (Takeover of Business of M/s. Raiment Lifestyle & S R Creation) | ₹61.00 | 2024-02-29 | 2.5x |
| Existing Shareholders (Bonus Issue 6:1) | — | 2025-08-12 | — |
| Allotted below the band — 1 entries | |||
| Rights Issue Allottees (Neha Modi, Ashish Purekha, Amish Shah, Samir Patra, Amish Shah HUF, Chitra Chandak, Abdur Rahaman, Diwakar Gaggar) | ₹850.00 | 2025-07-04 | as disclosed |
The 1 allotments listed under “allotted below the band” are shown at their as-disclosed per-share price. They are not adjusted for any later bonus issue or share split, so where a company has issued bonus shares the raw multiple understates the true return and can even read as a loss when none was made. We show them as filed and decline to compute a misleading multiple.
Prices are as stated in the filing’s allotment history and are not adjusted for later bonus issues or share splits. Where a company has issued bonus shares, the multiples above understate the true return and can even read as losses. Adjusting for that is on our list; until it is done we would rather show the raw disclosure and tell you its limits than publish a confident number that is wrong.
Lock-in Expiry Calendar
Shares held before the IPO cannot be sold immediately; they unlock in tranches. When a tranche unlocks, more shares become eligible to trade. Retail investors are frequently caught unaware by these dates. The schedule below follows from the listing date; quantities are shown only where the filing discloses them.
- 24 Aug 2029promoterlocked-in for a period of three years from the date of Allotment
- 24 Aug 2027otherlocked in for a period of one year from the date of allotment of Equity Shares in the Offer
An unlock means more shares may be sold — not that they will be, and not that the price will move. We state the dates; what you do with them is your call.
Educational, grounded entirely in the company's filings (DRHP/RHP). Not investment advice. FinMinutes does not provide buy/sell recommendations.
