Spunweb Nonwoven

• Spunweb Nonwoven is coming out with an initial public offering (IPO) of 63,51,600 equity shares in a price band Rs 90-96 per equity share.
• The issue will open on July 14, 2025 and will close on July 16, 2025.
• The shares will be listed on SME Platform of NSE.
• The face value of the share is Rs 10 and is priced 9.00 times of its face value on the lower side and 9.60 times on the higher side.
• Book running lead manager to the issue is Vivro Financial Services.
• Compliance Officer for the issue is Romit Ajaykumar Shah.

Profile of the company

Spunweb Nonwoven, along with its wholly owned subsidiary, Spunweb India Private Limited (SIPL), is engaged in the business of manufacturing of polypropylene spunbond nonwoven fabrics primarily used in industries such as hygiene, healthcare, packaging, agriculture and others (including roofing & construction, industrial and home furnishing). It is one of the largest manufacturers in spunbond nonwoven fabric industry in India. Its product portfolio consists of hydrophobic nonwoven fabric, hydrophilic nonwoven fabric, super soft nonwoven fabric, UV treated fabric, antistatic nonwoven fabric and FR treated fabric in the width of 1.6m, 2.6m and 3.2m with the range of 7 to 150 grams per square metre (GSM). It is also engaged in supply of various types of nonwoven fabric bags. 

The company is ISO 9001:2015 certified which ensures the products manufactured by it are reliable and consistent in quality. Its customers include manufacturers of hygiene products viz. diapers, sanitary pads and under pads, manufacturers of healthcare products viz., face masks, PPE kits, surgical gowns and other medical disposable products. Its customers also include manufacturers of packaging products viz. shopping bags, grocery bags, suit cover bags and manufacturers of agricultural products viz. fruit cover and crop cover.

It manufactures, markets and sells its products in domestic as well as international markets. In domestic market, it has catered to more than 400, 450, and 485 customers during Fiscal 2023, Fiscal 2024 and Fiscal 2025. In the international market, it has catered to more than 15, 20, and 20 customers during Fiscal 2023, Fiscal 2024 and Fiscal 2025, respectively, who are based in countries such as the United States of America, United Arab Emirates, Italy, Egypt, Saudi Arabia, Sri Lanka, Nepal, Kenya and Nigeria.

Proceed is being used for:

• Funding the working capital requirements of the company
• Investment in its wholly owned subsidiary, SIPL, for funding its working capital requirements
• Repayment, in full or in part, of certain borrowings availed by the company
• General corporate purposes

Industry Overview

The fabric industry is a vital segment of the global textile sector, encompassing the production, manufacturing, and distribution of various types of fabrics used in diverse applications. From apparel and fashion to home furnishings, industrial products, medical supplies, and more. The fabric industry plays a crucial role in supplying essential materials to numerous sectors. The industry comprises a wide range of materials, including natural fabrics like cotton, silk, and wool, as well as synthetic fabrics such as polyester, nylon, and spandex. Additionally, the non-woven fabric sector is gaining prominence due to its applications in hygiene products, healthcare, agriculture and industrial uses. The fabric industry is integral to both everyday consumer goods and specialized industrial applications, making it a cornerstone of the global economy. As consumer preferences shift toward sustainable and innovative fabrics, the industry is evolving to meet new challenges and opportunities.

Non-woven fabric is a unique textile material that is distinct from traditional fabrics, as it is produced without the typical weaving or knitting processes that interlace yarns. Instead, fibers are bonded together through mechanical, thermal, or chemical methods to create the fabric. The absence of weaving or knitting results in fabrics that are lightweight, versatile, and often produced at lower costs. This innovative approach to fabric production makes non-woven materials highly adaptable, allowing manufacturers to tailor specific properties based on the intended application. Non-woven fabric is categorized based on various bonding patterns and conveying methods. The future of the technical textile and non-woven fabric industries is closely intertwined, driven by shared growth opportunities across sectors like healthcare, hygiene, agriculture, automotive, infrastructure, and filtration.

Domestic consumption of non-woven fabric in India experienced a significant increase, rising from 548 thousand tons in CY19 to 989 thousand tons in CY23, which represents a robust CAGR of 15.9%. Concurrently, revenue from this sector grew from $1,469 million in CY19 to $2,670 million in CY23, reflecting a CAGR of 16.1%. This rapid growth can be attributed to increasing demand across key industries such as healthcare, hygiene, packaging, and automotive. The widespread adoption of non-woven fabrics for disposable hygiene products like diapers, sanitary pads, and medical supplies has played a pivotal role in this expansion. Government initiatives such as the Swachh Bharat Mission, which emphasized improved sanitation and hygiene, also significantly boosted demand for non-woven materials. Additionally, the rise of e-commerce and modernization of retail packaging further contributed to the increased consumption of non-woven fabrics. Looking ahead, domestic consumption of non-woven fabric is projected to grow at a CAGR of 11.2% from CY24 to CY29.  

Pros and strengths

One of the largest manufacturers of spunbond nonwoven fabrics in India: The company is one of the largest manufacturers in spunbond nonwoven fabric industry in India, with an installed production capacity of 32,640 MT as of FY24. The company has strong capabilities in manufacturing nonwoven fabrics, using advanced spunbond technology to deliver high-quality, innovative products across diverse industries. The company has invested in a wide range of advanced machines, enabling it to efficiently cater to various customer requirements. Its manufacturing facilities are equipped with five production lines, each dedicated to manufacture products for specific industries which ensure consistent, efficient output and seamless integration across all stages of the production process.

Tailored spunbond nonwoven fabric manufacturing for industry specific needs: The company is a comprehensive solution provider for all types of PP spunbond nonwoven fabrics manufactured using advanced spunbond technology. Its spunbond technology also enables it to consistently deliver quality products across a diverse range of nonwoven fabrics that cater to various industries such as healthcare and hygiene, packaging, agriculture, roofing & construction, industrial and home furnishing, which allows it to offer customized, quality fabric solutions tailored to the unique requirements of each industry. In the healthcare and hygiene industry, its products are used in the production of sanitary pads, diapers, and other hygiene products, meeting the increasing demand for personal care solutions.

Advanced spunbond technology along with cleanroom technology for manufacturing process: The company is using SS and SSS advanced spunbond technology in manufacturing nonwoven fabrics. SS refers to twolayer spunbond nonwoven fabric in which the upper and lower layers are manufactured using spunbond technology. SSS refers to a three-layer spunbond nonwoven fabric where three separate layers are formed through application of spunbond technology during the manufacturing process. Spunbond technology is an efficient process for producing nonwoven fabrics that are strong, lightweight and cost-effective. It allows for customization in colours and weight while ensuring good breathability. It also uses advanced cleanroom HVAC systems which demonstrate its commitment towards quality adherence and innovation. These systems are designed to maintain the required temperature for its manufacturing process. By adhering to strict quality requirements and utilizing modern cleanroom technology, it enhances the accuracy and reliability of its products while minimizing the risk of contamination.

Risks and concerns

Maximum revenue for SIPL comes from limited customers: The company’s subsidiary Spunweb India Private Limited (SIPL) has garnered 74.73%, 80.06% and 48.21% of its revenue from top 10 customers in FY25, FY24 and FY23 respectively. SIPL may continue to derive a significant portion of its revenues from key customers. Although the composition and mix up of its top customers varies from year to year, if any decision by one or all its customers to cease or significantly reduce their business with the company, its revenue could decline, which may have a material adverse effect on its business, results of operations, cash flows and financial condition.

Significant working capital requirements: The company’s business requires a significant amount of working capital primarily due to the time gap between purchase of raw materials and collection of receivables from customers. It is also required to maintain adequate inventory levels to meet production requirements as well as extend the credit period to customers in accordance with industry practice. As on March 31, 2025, it has a sanctioned limit for working capital of Rs 5,035.00 lakh from existing lenders, including fund-based sanction limit of Rs 4,800.00 lakh and non-fund based sanction limit of Rs 235.00 lakh. Any failure in arranging adequate working capital for its operations may adversely affect its business, results of operations, cash flows and financial conditions.

Stiff competition: The nonwoven fabric industry is highly competitive and it faces intense competition from the existing domestic and international manufacturers with a significant market presence and new entrants. These competitors offer variety of products, utilize advanced technologies and have larger production capacities, which may impact its business growth and results of operations. If the products are available at cheaper prices from existing manufacturers, it may pressurize it on pricing without compromising product quality which may put strain on its profit margin.

Outlook

Spunweb Nonwoven is a manufacturer and supplier of non-woven fabrics, primarily used for applications like doormats, bags, carpets, and tarpaulins. It is recognized for their quality control system, which includes testing, inspection, and analysis to ensure high-quality products. The company has a long-standing association with different consumers in diverse industries and geographies. It has advanced spunbond technology along with cleanroom technology for the manufacturing process. On the concern side, the company derive revenue from diversified customers whereas SIPL derives a significant portion of its revenue from a limited number of customers. Its inability to acquire new customers or loss of all or a substantial portion to any of its major customers, for any reason and/or continued reduction of the business from them, could have a material adverse impact on its business, results of operations, cash flows and financial condition. Moreover, it derives a significant portion of its revenue from operations from domestic sales which exposes it to risks specific to Indian geographies and market.

The company is coming out with a maiden IPO of 63,51,600 equity shares of Rs 10 each. The issue has been offered in a price band of Rs 90-96 per equity share. The aggregate size of the offer is around Rs 57.16 crore to Rs 60.98 crore based on lower and upper price band respectively. On performance front, the company’s revenue from operations increased by 52.31% from Rs 14,861.14 lakh in financial year ended March 31, 2024, to Rs 22,635.03 lakh in financial year ended March 31, 2025, primarily on account of an increase in capacity utilization from 52.83% in Fiscal 2024 to 73.24% in Fiscal 2025. Moreover, the profit after tax increase from Rs 544.18 lakh in financial year ended March 31, 2024, to Rs 1,079.22 lakh for financial year ended March 31,2025.

The company’s strategy for expanding the manufacturing of nonwoven fabrics focuses on broadening its presence across diverse industries and geographies while continuing to deliver quality products. It has successfully penetrated multiple industries including healthcare and hygiene, packaging, agriculture, roofing & construction, industrial and home furnishing. Its advanced SS and SSS spunbond technology have enabled it to offer strong, lightweight, and cost-effective materials tailored to the unique needs of these industries. Geographically, it has established a strong presence in key markets across Asia-Pacific, the United States of America, Europe, the Middle East & Africa ensuring its products reach a broad customer base in both developed and emerging economies.