Saraswati Saree IPO: Check IPO Date, Lot Size, Price & Details

About the company:

Founded in 1996, Saraswati Saree Depot Limited specializes in manufacturing and wholesaling women’s apparel, with a strong focus on the B2B saree market. The company also engages in the wholesale distribution of other women’s garments, including kurtis, dress materials, blouse pieces, lehengas, and bottoms. It sources its products from over 900 weavers and suppliers across various Indian states, offering a diverse catalog of more than 300,000 unique SKUs. Saraswati Saree Depot primarily operates in the southern and western regions of India, including Maharashtra, Goa, Karnataka, and Tamil Nadu, and served over 13,000 unique customers in fiscal year 2024. Their stores offer a wide range of sarees categorized by occasion, fabric, weave, and ornamentation, with saree sales accounting for over 90% of the company’s revenue. To capitalize on the growing trend of multi-day weddings, the increasing popularity of traditional attire during festivals, and the rising demand for organized brands in the Indian wedding and celebration wear market, the company plans to expand into the men’s ethnic wear segment.

IPO Details:

The objective of the fresh issue:

The company intends to utilize the net proceeds received from the fresh issue towards:

• Funding the working capital requirements of the company.
• General corporate purposes.

Key Strengths and Opportunities:

• The company has established strong relationships with manufacturers in key hubs such as Surat, Varanasi, and Bengaluru, sourcing sarees and women’s apparel from over 900 weavers and suppliers across India. In fiscal years 2024, 2023, and 2022, revenue from the top 10 customers accounted for 7.85%, 8.91%, and 7.90% of total revenue, reflecting a diversified customer base. Similarly, purchases from the top 10 suppliers made up 25.68%, 22.89%, and 26.81% of total purchases in the same years.
• The company's strategy focuses on maintaining a fresh and appealing product selection through a continuous cycle of review, replenishment, and innovation. The company ensures its offerings remain relevant and engaging by regularly assessing inventory and adapting to changing trends and customer preferences. This approach prevents monotony and keeps customers interested, aligning the inventory with current market demands.
• The Utsav event is the company's largest annual sales promotion, held every September/October to align with the festive and wedding season. During this period, management personally visits customers to invite them and build stronger relationships. The event features the year's biggest discounts, attracting the highest customer visits, sales, and volumes. In FY 2022-23, the Utsav event contributed 13.83% of the company's total sales.

Risks:

• The company is highly focused on the sale of women’s sarees and is vulnerable to variations in demand. Any changes in consumer preference could have an adverse effect on the business, results of operations, and financial condition.
• The company operates two stores in Maharashtra, located in Kolhapur and Ulhasnagar. Any social unrest, natural disaster, or service disruption in Maharashtra, or any issues at these stores, could negatively impact the company’s business operations.
• The company operates in a highly competitive and fragmented industry with many smaller, unorganized players. The inability to compete effectively in this market could negatively impact the company’s future business prospects. Further, operating in the wholesale segment limits the company’s visibility and direct connection with end consumers, which could hinder efforts to build brand loyalty and awareness among them.

Financial Snapshot: