Madhur Knit Crafts
A distinct read of SME-specific danger (liquidity, concentration, forensic flags) — separate from the FinMinutes Score. Higher band = more caution warranted.
- Dressed bride financials: standalone profits skyrocketed 6.5x in FY25 to ₹11.03 Cr, but operating cash flow was negative (₹-2.56 Cr) due to swelling inventories (₹38.94 Cr) and receivables (₹38.23 Cr)
- Significant related party purchases: purchased ₹37.21 Cr in raw materials from promoter entity National Yarn Agency and group entity Star Cottex, indicating high transfer pricing risk
- Refinancing focus: 51.56% of specified IPO proceeds (₹20.85 Cr) are allocated to pay down existing borrowings, indicating a balance sheet repair raising profile
- Bilateral promoter lending: active pre-IPO personal loan movements of over ₹3.00 Cr in volume between the company, MD Arun Gupta, and other promoters/relatives
- Lighter review choice: opting for SME platform despite possessing financial scale and profits that comfortably meet Mainboard 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
Madhur Knit Crafts Limited is a Ludhiana-based vertically integrated textile manufacturer engaged in the production of fabrics and garments, with a primary focus on consumer products such as blankets.
What this company actually does — full breakdown ▾
Madhur Knit Crafts Limited was originally incorporated in August 1997 and commenced its commercial operations in 2013 with a primary focus on manufacturing blankets. The Company operates a vertically integrated yarn-to-cloth manufacturing facility admeasuring over 300,000 square feet located in Ludhiana, Punjab, which houses processes including knitting, dyeing, printing, brushing, and finishing. The facility has an annual installed production capacity of 75,00,000 KGs, with a capacity utilization of 64.50% in Fiscal 2025 and 69.75% for the eleven-month period ended February 28, 2026. The Company primarily sells its products B2B to wholesalers, institutional buyers, and retailers, and also exports finished blankets. It reaches its target market through direct customer engagement, established distribution networks of regional partners, and word-of-mouth referrals. To maintain product standards, its operations conform to ISO 9001:2015 certification requirements.
The Company's primary operational moat is its vertically integrated 'yarn-to-cloth' manufacturing model, which centralizes all major textile processing stages in-house to reduce lead times, optimize costs, and capture an additional 2.5% in gross margins. This is further supported by its strategic location within the prominent Ludhiana textile cluster.
The Offer
Follow the Money — Use of Proceeds
- Funding capital expenditure for the purchase of Solar panel — ₹3.68 cr
- Working Capital Requirement of the Company — ₹15.92 cr
- Prepayment or repayment of a portion of certain outstanding borrowings availed by the Company — ₹20.85 cr
- General Corporate Purpose
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. The peer group is the one the filing itself names. A premium is not the same thing as expensive and a discount is not the same thing as cheap — the peer table and the reasons sit further down this page.
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 5 live components.
88% of the designed weighting had real data behind it on this issue. Not yet scored here: Anchor Quality. 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 measured10%
The post-issue earnings multiple against the peer median disclosed in the filing. A discount to the median scores well and a premium scores badly. When the filing does not disclose comparable peer multiples, this component is dropped from the weighting rather than held at a made-up neutral.
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 | 11M-FY26 | FY25 | FY24 |
|---|---|---|---|
| Revenue (₹ Cr) | 194.6905 | 171.635 | 108.3845 |
| Net Profit (₹ Cr) | 12.3523 | 11.0325 | 1.7043 |
| PAT Margin | 6.34% | 6.43% | 1.57% |
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) | 11M-FY26 | FY25 | FY24 |
|---|---|---|---|
| Revenue from Operations | 194.69 | 171.64 | 108.38 |
| Other Income | 0.10 | 0.13 | 0.02 |
| Total Income | 194.79 | 171.76 | 108.41 |
| Cost of Materials Consumed | 138.70 | 119.13 | 80.04 |
| Employee Benefit Expense | 5.91 | 4.11 | 3.73 |
| Finance Cost | 6.77 | 6.14 | 4.29 |
| Depreciation & Amortisation | 2.43 | 2.37 | 1.79 |
| Other Expenses | 24.40 | 25.12 | 16.57 |
| Total Expenses | 178.21 | 156.87 | 106.42 |
| Profit Before Tax | 16.58 | 14.89 | 1.99 |
| Tax Expense | 4.23 | 3.85 | 0.28 |
| Profit After Tax | 12.35 | 11.03 | 1.70 |
| EPS - Basic | 9.20 | 8.51 | 1.41 |
| EPS - Diluted | 9.20 | 8.51 | 1.41 |
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) | 11M-FY26 | FY25 | FY24 |
|---|---|---|---|
| EBITDA | 25.67 | 23.28 | 8.04 |
| EBIT | 23.25 | 20.90 | 6.26 |
Balance SheetWhat the company owns, owes, and is worth on paper.
| Balance Sheet (₹ Cr) | 11M-FY26 | FY25 | FY24 |
|---|---|---|---|
| Share Capital | 13.68 | 10.73 | 9.70 |
| Reserves & Surplus | 29.93 | 18.76 | 6.54 |
| Net Worth | 43.61 | 29.49 | 16.24 |
| Long-term Borrowings | 29.21 | 31.17 | 29.52 |
| Short-term Borrowings | 44.33 | 36.03 | 28.26 |
| Total Borrowings | 73.54 | 67.20 | 57.79 |
| Trade Payables | 32.72 | 15.67 | 12.21 |
| Current Liabilities | 85.24 | 60.17 | 42.79 |
| Total Liabilities | 116.37 | 93.10 | 74.36 |
| Property, Plant & Equipment | 30.60 | 31.45 | 21.05 |
| Capital Work in Progress | 0.00 | 0.00 | 6.27 |
| Intangible Assets | 0.00 | 0.00 | 0.00 |
| Investments | 0.00 | 0.00 | 0.00 |
| Inventories | 60.92 | 38.94 | 23.71 |
| Trade Receivables | 49.27 | 38.23 | 28.32 |
| Cash & Equivalents | 2.09 | 1.09 | 0.90 |
| Current Assets | 126.91 | 89.09 | 60.38 |
| Total Assets | 159.97 | 122.59 | 90.60 |
Cash FlowWhere the cash actually went. Often the most honest statement of the three.
| Cash Flow (₹ Cr) | 11M-FY26 | FY25 | FY24 |
|---|---|---|---|
| Net Cash from Operating Activities | 4.44 | -2.56 | -3.68 |
| Capital Expenditure | 5.12 | 3.76 | 15.49 |
| Net Cash from Investing Activities | -3.83 | -3.60 | -15.70 |
| Net Cash from Financing Activities | 1.30 | 6.06 | 19.50 |
| Net Change in Cash | 1.90 | -0.10 | 0.12 |
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 | 11M-FY26 | FY25 | FY24 |
|---|---|---|---|
| Profitability | |||
| EBITDA Margin (%) | 13.2 | 13.6 | 7.4 |
| EBIT Margin (%) | 11.9 | 12.2 | 5.8 |
| PAT Margin (%) | 6.3 | 6.4 | 1.6 |
| Return on Equity (%) | 28.3 | 37.4 | 10.5 |
| Return on Capital Employed (%) | 19.8 | 21.6 | 8.5 |
| Return on Assets (%) | 7.7 | 9 | 1.9 |
| Leverage | |||
| Debt / Equity (x) | 1.69 | 2.28 | 3.56 |
| Net Debt / EBITDA (x) | 2.78 | 2.84 | 7.07 |
| Interest Coverage (x) | 3.43 | 3.4 | 1.46 |
| Liquidity | |||
| Current Ratio (x) | 1.49 | 1.48 | 1.41 |
| Quick Ratio (x) | 0.77 | 0.83 | 0.86 |
| Efficiency | |||
| Asset Turnover (x) | 1.22 | 1.4 | 1.2 |
| Receivable Days | 92 | 81 | 95 |
| Inventory Days | 160 | 119 | 108 |
| Payable Days | 86 | 48 | 56 |
| Cash Conversion Cycle (days) | 166 | 152 | 147 |
| Quality of Earnings | |||
| Operating Cash Flow / PAT (x) | 0.36 | -0.23 | -2.16 |
| Accruals Ratio (%) | 4.9 | 11.1 | 5.9 |
| Capex / Depreciation (x) | 2.11 | 1.58 | 8.68 |
| Inventory and payable days are measured against cost of goods (materials consumed + purchases of stock-in-trade + change in inventories). Receivable days against revenue. | |||
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 | 11M-FY26 | FY25 | FY24 |
|---|---|---|---|
| Net Margin (PAT / Revenue) | 6.3% | 6.4% | 1.6% |
| Asset Turnover (Revenue / Assets) | 1.22x | 1.4x | 1.2x |
| Equity Multiplier (Assets / Net Worth) | 3.67x | 4.16x | 5.58x |
| = Return on Equity | 28.3% | 37.4% | 10.5% |
| Tax Burden (PAT / PBT) | 0.75x | 0.74x | 0.86x |
| Interest Burden (PBT / EBIT) | 0.71x | 0.71x | 0.32x |
| Operating Margin (EBIT / Revenue) | 11.9% | 12.2% | 5.8% |
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.
- Operating cash flow was only 0.36x reported profit in 11M-FY26. Less than half of the profit on the income statement arrived as cash.
- Between FY24 and 11M-FY26 revenue grew 80% while profit grew 625%. 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.
- Debt to equity stood at 1.69x in 11M-FY26.
Forensic ModelsBeneish, Altman, Piotroski and the Montier C-score — 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) | 1.136 | 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 | 1.064 | 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 | 1.134 | 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) | 0.954 | 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 | 0.914 | 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 | 0.96 | Above 1 means leverage rose. Debt covenants create pressure to hit numbers. |
| TATA Total Accruals to Total Assets (PAT - CashFromOperations) / TotalAssets | 0.0495 | 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″ = 6.94 · 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 | 0.26 |
| X2 — Reserves / Total Assets | 0.187 |
| X3 — EBIT / Total Assets | 0.145 |
| X4 — Net Worth / Total Liabilities | 0.375 |
| Z″ = 3.25 + 6.56·X1 + 3.26·X2 + 6.72·X3 + 1.05·X4 | 6.94 |
X2 is meant to read retained earnings. The filing reports Other Equity, which also holds securities premium paid in by investors, so X2 here runs on reserves and reads higher than true retained earnings would. The more premium the company has raised before listing, the more Z″ is flattered.
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
Montier C-Score
4 of 6 signsSix yes-or-no signs that reported profit may be running ahead of the business, from James Montier’s 2008 screen, read here for 11M-FY26 against FY25. Each is a direction in the statements, not a judgement. Several together are a reason to read the accounting policies and notes closely; none on its own means anything is wrong, and growing companies trip some of them honestly.
- ○Gap between profit and operating cash flow widening · PAT − CFO: ₹13.6 cr in FY25, ₹7.9 cr in 11M-FY26
- ●Receivable days rising · 81 days in FY25, 92 days in 11M-FY26
- ●Inventory days rising · 119 days in FY25, 160 days in 11M-FY26 (on cost of goods)
- ●Other current assets rising against revenue · 6.3% of revenue in FY25, 7.5% in 11M-FY26 (current assets less cash, receivables and inventory)
- ○Depreciation falling against fixed assets · 7.5% of net block in FY25, 7.9% in 11M-FY26
- ●Total assets growing more than 10% a year · 30.5% in 11M-FY26
Ratios Nobody Prints
- Contingent liabilities / Net worth: 0%
Contingent liabilities of 0.01 cr against a net worth of 43.61 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: 1.7%
1.7% of revenue in 11M-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: 0.05x
Short-term borrowings of 44.33 cr against cash of 2.09 cr. Debt that must be refinanced within a year is only comfortable while lenders stay comfortable. - Promoter remuneration / PAT: 3.6%
Managerial remuneration to the promoter group was 0.45 cr against a profit of 12.35 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.
What the Price RequiresThe profit the offer price needs, at three hurdle rates. A restatement of the price, not a view on it.
At the upper band of ₹100.00, the market value is ₹190 cr. A buyer who wants a given return each year from a business that never grows needs annual profit of market value × that return. The three rates are round hurdle rates, not this company’s cost of capital, so pick the one that is yours. The years columns assume profit compounds from the 11M-FY26 figure and the price stands still. None of this is a forecast, a fair value or a target.
| Hurdle rate | Profit the price needs | × 11M-FY26 profit | Years at 15% growth | Years at 25% growth |
|---|---|---|---|---|
| 10% a year | ₹19.0 cr | 1.5x | 3.1 | 1.9 |
| 12% a year | ₹22.8 cr | 1.8x | 4.4 | 2.7 |
| 14% a year | ₹26.6 cr | 2.2x | 5.5 | 3.4 |
- Earnings yield at the upper band: 6.50% (11M-FY26 profit ÷ market value).
- Free cash flow yield: -0.36% (operating cash flow less capital expenditure, −₹0.7 cr, ÷ market value).
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 Worth12.35 ÷ 43.61What 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)23.25 ÷ (43.61 + 73.54) = 23.25 ÷ 117.15Return on ALL the capital in the business, borrowed as well as owned. Unlike ROE, it cannot be flattered by taking on debt.
EBITDA ÷ Revenue25.67 ÷ 194.69Operating profitability before the effects of debt, tax and depreciation. What the business earns from the act of trading.
Total Borrowings ÷ Net Worth73.54 ÷ 43.61How much the company has borrowed against what it owns. High is not automatically bad — ask whether the borrowing is being serviced comfortably.
EBIT ÷ Finance Cost23.25 ÷ 6.77How 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(49.27 ÷ 194.69) × 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 Days160 + 92 − 86How 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 ÷ PAT4.44 ÷ 12.35Did 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(12.35 − 4.44) ÷ 159.97 = 7.92 ÷ 159.97The 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₹100.00 × 19,010,100 sharesWhat the whole company is being valued at, if the issue prices at the top of the band.
Market Cap + Total Borrowings − Cash190.10 + 73.54 − 2.09What 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 ÷ EBITDA261.55 ÷ 25.67The 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 ÷ PAT190.10 ÷ 12.35The familiar multiple. Useful, but blind to debt — read it alongside EV/EBITDA, never instead of it.
Growth needed to reach the peer multiple on earnings alone15.39x against a peer median of 4.69xThis is not a forecast and not a target. It is the price restated as a question: at this multiple, with the price unchanged, earnings would have to compound at this rate to arrive at what the filing’s own peer group trades on. Whether the business can do that is the argument — we are only stating what the argument is about.
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.
Latest full-year PAT ÷ market value₹12.35 cr ÷ ₹190.10 crThe P/E turned upside down: what each rupee of market value earns today. Set it against what you could earn elsewhere; the gap is what growth has to make up.
(Operating cash flow − capital expenditure) ÷ market value₹-0.68 cr ÷ ₹190.10 crCash left after the company pays for its own investment, against the price of the whole company. Profit can be shaped by accounting choices; this is harder to shape.
P/E ÷ trailing PAT growth (%)15.39 ÷ 12%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 11M-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
Severe Operating Cash Mismatch Driven by Pre-IPO Inventory Swell
Madhur Knit Crafts Limited presents a severe 'dressed bride' financial profile, showing a massive profitability jump in FY25/11M-FY26 that is entirely on paper. Operating cash flows were deeply negative at ₹-2.56 Cr in FY25, because cash was locked up in massive inventories which ballooned to ₹60.92 Cr by February 2026.
Source: p. 18, 20, F-4, F-5, F-6Substantial Governance Risk via Related Party Purchase and Lending Flows
The company has extreme operational dependency on related party raw material suppliers, purchasing ₹37.21 Cr in yarn/material from promoter/group entities National Yarn Agency and Star Cottex in 11M-FY26. Governance is further stressed by ongoing personal loan transactions of over ₹3.00 Cr in volume with promoters.
Source: p. 20, 21, F-30, F-31Shareholding, Syndicate & Leadership
Leadership & Skin in the Game
Leadership: Arun Gupta (Managing Director)
Litigation: Outstanding direct tax demand against the Company u/s AY 2025-26: INR 0.0031 Cr (Interest on TDS default of INR 0.31 Lakhs recorded on Income Tax portal, though already deposited on 09.07.2026). Criminal proceedings initiated BY the Company: 1 case under Section 138 of the NI Act against Vasu Knitwears (Rahul Arora) involving INR 0.1285 Cr for dishonoured cheques; 1 case under Section 138 of the NI Act against 3V International involving INR 0.2000 Cr for machine purchase advance refund. Commercial litigation initiated BY the Company: 1 recovery claim before MSME Samadhan against M/s Pooja Wollen Industries seeking recovery of INR 0.7942 Cr (comprising principal of INR 0.4659 Cr and interest of INR 0.3284 Cr) u/s 18 of the MSMED Act. Litigations against promoters, other directors, and group entities are Nil u/s RHP reporting.
Auditor / RPT Flags: None disclosed. The Peer Reviewed Auditor has confirmed that there are no adverse observations, reservations, qualifications, or matters of emphasis in the statutory audit reports of the Company for FY 23, FY 24, FY 25, or the stub period ended Feb 28, 2026.
Peers & Valuation
| Company | P/E | P/B | RoE | Margin |
|---|---|---|---|---|
| Kaytex Fabrics Ltd | 4.69 | — | 14.96 | 11.06 |
At the ₹100 upper band, the issue is priced at 10.9x earnings — a 132% premium to the peer median of 4.7x. This is the arithmetic of the price band against the peers the filing itself lists; it is not a view on whether the offer is worth taking.
🔍 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's standalone profitability surged right before the IPO, with PAT expanding over 6-fold from ₹1.70 Cr in FY24 to ₹11.03 Cr in FY25, and reaching ₹12.35 Cr in the 11M-FY26 stub period. However, Cash Flow from Operations (CFO) was deeply negative in both fiscal years, standing at ₹-3.68 Cr in FY24 and ₹-2.56 Cr in FY25. This severe cash drain was driven by inventories ballooning from ₹23.71 Cr in FY24 to ₹38.94 Cr in FY25 and further to ₹60.92 Cr in 11M-FY26, alongside trade receivables expanding from ₹28.32 Cr to ₹49.27 Cr in the same period.
p. 18, 20, F-4, F-5, F-6The company exhibits extreme operational dependency on promoter-owned and group entities for its core functions. In 11M-FY26, the company purchased raw materials/yarn worth ₹15.39 Cr from promoter-owned entity M/s National Yarn Agency (which also charges rent to the company) and ₹21.82 Cr from group company Star Cottex Limited. Together, raw material purchases from these two related parties represent a critical operational concentration, alongside active sales of ₹1.13 Cr to M/s K.C Fabrics.
p. 20, 21, F-30Out of the specified allocations of the fresh issue proceeds, the company has designated ₹20.85 Cr (51.56% of specified proceeds) to the prepayment or repayment of outstanding borrowings, and ₹15.92 Cr (39.36% of specified proceeds) to fund working capital requirements. Only ₹3.68 Cr (9.09% of specified proceeds) is allocated to tangible capital expenditure (purchase of solar panels).
p. 80, 81During the pre-IPO periods, the company engaged in continuous unsecured loan transactions with its promoters and directors. Managing Director Arun Gupta availed and repaid loans of ₹1.19 Cr in 11M-FY26. Significant unsecured loans were also taken and given with relative Nitasha Gupta (loan given ₹0.65 Cr; loan taken ₹0.18 Cr), Piyush Gupta, Chirag Gupta, Rajesh Gupta, and various promoter-controlled HUFs.
F-31The company experienced statutory deposit delays for PF, ESIC, and TDS payments alongside GSTR-3B filing delays. Outstanding processed TDS defaults on the TRACES portal stand at ₹0.31 lakhs (₹0.0031 Cr). Secretarial filings also witnessed multi-month delays in submitting Form DPT-3 (return of deposits) for FY22 and FY23 and Form SH-7 for capital increases in FY25. The company also changed its statutory auditor within the last 3 years.
p. 31, 38, 208, 211The company reported Standalone revenues of ₹171.64 Cr in FY25 and ₹194.69 Cr in 11M-FY26, with standalone PAT of ₹11.03 Cr and ₹12.35 Cr respectively. This financial scale comfortably exceeds the minimum net worth and profitability criteria required for a Mainboard listing.
p. 3, 5, 8, F-4, F-5Outstanding direct tax demand against the Company u/s AY 2025-26: INR 0.0031 Cr (Interest on TDS default of INR 0.31 Lakhs recorded on Income Tax portal, though already deposited on 09.07.2026). Criminal proceedings initiated BY the Company: 1 case under Section 138 of the NI Act against Vasu Knitwears (Rahul Arora) involving INR 0.1285 Cr for dishonoured cheques; 1 case under Section 138 of the NI Act against 3V International involving INR 0.2000 Cr for machine purchase advance refund. Commercial litigation initiated BY the Company: 1 recovery claim before MSME Samadhan against M/s Pooja Wollen Industries seeking recovery of INR 0.7942 Cr (comprising principal of INR 0.4659 Cr and interest of INR 0.3284 Cr) u/s 18 of the MSMED Act. Litigations against promoters, other directors, and group entities are Nil u/s RHP reporting.
p. 18, 19, 23, 208, 211, F-2, F-3, F-35Short-term borrowings of ₹44.33 cr against cash of ₹2.09 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.
The company is heavily dependent on promoter-owned M/s National Yarn Agency and group company Star Cottex Limited for raw materials, purchasing ₹37.21 Cr from them in 11M-FY26. This reveals that its vertical integration is operationally bottlenecked by direct transaction dependencies on related party suppliers rather than third-party arms-length vendors.
p. 20, 21, 123, 126, F-30Live 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: Skyline Financial 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 (08 Oct 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 fresh IPO proceeds distributed and what portion is for balance-sheet repair?
The fresh issue proceeds are primarily allocated to balance sheet refinancing: ₹20.85 Cr (51.56% of specified proceeds) is allocated for prepaying/repaying corporate borrowings and ₹15.92 Cr (39.36%) is for working capital. Only ₹3.68 Cr (9.09%) is allocated for capital expenditure on solar panels.
p. 80, 81Who are the promoters and what is their acquisition cost?
The promoters are Arun Gupta, Piyush Gupta, and Chirag Gupta. Following early face value subscriptions, preferential rights issues, and a massive bonus allotment of 2,682,025 shares in June 2025, their nominal acquisition cost per share is extremely low.
p. 63, 68Are there material related party purchase streams or dependencies?
Yes. The company has significant raw material purchase dependencies on related parties: in 11M-FY26, it purchased raw materials worth ₹15.39 Cr from promoter-owned M/s National Yarn Agency and ₹21.82 Cr from group company Star Cottex Limited.
p. 20, 21, F-30Does operating cash flow align with reported profitability?
No. Despite standalone PAT expanding rapidly to ₹11.03 Cr in FY25, Cash Flow from Operations was deeply negative at ₹-2.56 Cr. This mismatch is driven by uncollected trade receivables rising to ₹38.23 Cr and inventories swelling to ₹38.94 Cr.
p. 18, 20, F-4, F-5What structural listing choices and market parameters apply to this offer?
The offer is a fresh issue listing on the NSE EMERGE platform, with Skyline Financial Services acting as the registrar and SKI Capital Services as the Lead Manager. NNM Securities is the designated market maker. Although eligible by size for Mainboard, the company chose the SME platform.
p. 3, 5, 8, 40What 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 (Rajesh Gupta, Vishnu Gupta, Arun Gupta, Ravi Gupta) | ₹10.00 | 1997-08-21 | 10.0x |
| An early round from roughly 30 years ago, at roughly 10.0x 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 (Rajesh Gupta, Vishnu Gupta, Arun Gupta, Ravi Gupta, Sulochana Gupta, Kastoor Chand Gupta, Rashmi Gupta, Sangeeta Gupta, Anita Gupta, Kastoor Chand Gupta HUF) | ₹10.00 | 1998-03-31 | 10.0x |
| An early round from roughly 29 years ago, at roughly 10.0x 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 (Rajesh Gupta, Vishnu Gupta, Arun Gupta, Ravi Gupta, Sulochana Gupta, Kastoor Chand Gupta, Rashmi Gupta, Sangeeta Gupta, Anita Gupta, Kastoor Chand Gupta HUF, Arun Gupta HUF, Piyush Gupta, etc.) | ₹10.00 | 2011-10-01 | 10.0x |
| An early round from roughly 15 years ago, at roughly 10.0x 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. | |||
| Allottees of Bonus Issue (Kastoor Chand Gupta, Kastoor Chand Gupta HUF, Sulochana Gupta, Arun Gupta, Arun Gupta HUF, Sangeeta Gupta, Piyush Gupta, Rajesh Gupta, Rajesh Gupta HUF, Rashmi Gupta, Vishnu Gupta, Vishnu Gupta HUF, Anita Gupta, Ravi Gupta, Ravi Gupta HUF, Anju Gupta, Trimurti Hosiery Mills Private Limited, National Yarn Agency) | — | 2013-03-30 | — |
| Allottees of Preferential Issue (Kastoor Chand Gupta, Kastoor Chand Gupta HUF, Sulochana Gupta, Arun Gupta, Arun Gupta HUF, Sangeeta Gupta, Piyush Gupta, Rajesh Gupta, Rajesh Gupta HUF, Rashmi Gupta, Vishnu Gupta, Vishnu Gupta HUF, Anita Gupta, Ravi Gupta, Ravi Gupta HUF, Anju Gupta, Madhur Gupta, Chirag Gupta) | ₹10.00 | 2013-05-01 | 10.0x |
| An early round from roughly 14 years ago, at roughly 10.0x 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. | |||
| Allottees of Preferential Issue (Kastoor Chand Gupta, Sulochana Gupta, Arun Gupta, Arun Gupta HUF, Piyush Gupta, Rajesh Gupta, Rashmi Gupta, Vishnu Gupta, Vishnu Gupta HUF, Anita Gupta, Ravi Gupta, Ravi Gupta HUF, Anju Gupta, Madhur Gupta, Chirag Gupta) | ₹10.00 | 2013-09-05 | 10.0x |
| An early round from roughly 13 years ago, at roughly 10.0x 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. | |||
| Allottees of Rights Issue (Sangeeta Gupta, Nitasha Gupta, Piyush Gupta, Chirag Gupta, Vani Gupta, Arun Gupta) | ₹21.50 | 2024-06-07 | 4.7x |
| Allottees of Bonus Issue (Arun Gupta, Arun Gupta HUF, Chirag Gupta, Nitasha Gupta, Piyush Gupta, Sangeeta Gupta, Vani Gupta) | — | 2025-06-12 | — |
| Allottees of Preferential Allotment (Inderpal Singh, Dinesh Garg, Dhruv Gupta, Sumit Garg, Preeti Kapoor, Sunita Bansal, Ritika, Saurabh Makhija, Vikas Bansal) | ₹65.00 | 2026-02-28 | 1.5x |
| Allotted below the band — 2 entries | |||
| Allottees of Preferential Issue (Synergy Cosmetic (EXIM) Limited, Kappac Pharma Limited, Turbotech Engineering Limited, Sun Techno Limited, Kosian Industries Limited) | ₹500.00 | 2012-03-24 | as disclosed |
| Allottees of Preferential Issue (Simplex Trading & Agencies Limited, Sun Techno Limited, Kosian Industries Limited) | ₹500.00 | 2012-03-30 | as disclosed |
The 2 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.
- 01 Sep 2029promoterlocked-in for a period of three years from the date of Allotment as Promoters' contribution3,900,000 shares (20% of total)
- 01 Sep 2076promoterlocked in for a period of two years from the date of Allotment (being 50% of the promoters' holding in excess of the minimum promoters' contribution)2,825,881 shares
- 01 Sep 2076promoterlocked in for a period of one year from the date of Allotment (being the remaining 50% of the promoters' holding in excess of the minimum promoters' contribution)2,825,881 shares
- 01 Sep 2027otherlocked-in for a period of at least one year from the date of purchase / allotment272,307 shares
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.
