Rachit Prints

• Rachit Prints is coming out with an initial public offering (IPO) of 13,08,000 equity shares in a price band of Rs 140-149 per equity share.
• The issue will open on September 1, 2025 and will close on September 3, 2025.
• The shares will be listed on SME Platform of BSE.
• The face value of the share is Rs 10 and is priced 14.00 times of its face value on the lower side and 14.90 times on the higher side.
• Book running lead manager to the issue is Khambatta Securities.
• Compliance Officer for the issue is Ayushi Verma.

Profile of the company

Rachit Prints is engaged in the manufacturing of Speciality fabric tailored for mattresses such as knitted fabric, printed fabric, warp knit, pillow fabric, Binding Tape and trading of the comforters and bedsheets. Its production process begins with yarn procurement and encompasses in-house weaving, designing, printing, and finishing, resulting in knitted and printed fabrics crafted to meet its clients’ customized specifications. Specializing in knitted Fabrics, printed Fabrics, and warp knit, it sources yarn and chemicals to produce specialized textiles. The company is specialised in converting yarn into fabric through knitting of fabrics and printing.

The company’s raw material is ‘Cotton yarn’, ‘Viscose’, ‘Spun’, ‘Filament’ and ‘Dyed Yarn’ procured from Delhi and Haryana from which it produces fabric. It primarily follows a B2B (business-to-business) model for its products. Its customers buy the printed fabric and knitted fabric from it in order to further sell them or produce.

The company produces its products for leading brands like Sleepwell, Kurlon Enterprise Limited and Prime Comfort Products Private Limited. Majority of its work is on order basis. After an order is received, it sends it to the factory to analyses the required raw material specification, designs and manufacturing specifications to have an idea about the raw materials available and raw materials needed to process the order in time. After checking the calculation for the balance raw materials needed, it makes them available for its factory workers to initiate the production. Once, the production gets completed it approves the quality and designs and then work towards the finishing of complete order.

Proceed is being used for:

• Meeting working capital requirements of the company
• Funding the expansion plan of the company i.e. capital expenditure towards purchase of plant and machinery
• Partial pre-payment of term loans to banks
• General corporate purpose

Industry Overview

India is currently one of the largest manufacturers of readymade garments and amongst the largest exporters as well. Domestic market for readymade garments too has grown at a fast pace helping India emerge as one of the fastest growing and lucrative readymade garment markets in the world. Apparel manufacturing alone provides employment to a population of 12.3 million. Domestic demand in the last years witnessed a slowed down as consumers paired down their discretionary spending on the wake of economic uncertainty. Exports too suffered the same fate as recessionary scenario in key export markets -- US and EU -- dampened demand for readymade garments in those markets. Domestically, due to the current market slowdown, clothing manufacturers are projected to experience a decline of 25-30 percent in order bookings for the upcoming festive season. This decrease in demand can be attributed to inflation and the fluctuating costs of inputs such as cotton, polyester yarn, and man-made fibers, which have led to higher prices for customers. As a result, there is a slowdown in demand for clothing products.

The Indian home textile market has exhibited notable growth in recent years, with the market size estimated at $9.7 billion in 2023 and expected to increase to $10.5 billion in 2024, marking a growth rate of approximately 9%. This rapid expansion has drawn the interest of foreign brands, many of which have entered the Indian market through direct investments or joint ventures, eager to capture a share of this thriving industry. The sector’s growth is driven by multiple factors, including rising household incomes, an increasing population, enhanced income levels, and a well-established network of organized retail channels, which have improved accessibility for consumers. Additionally, demand from end-use sectors such as housing, hospitality, and healthcare has created substantial opportunities for home textiles in India, positioning the country as a significant player in the global home textile trade.

The Indian home textile market has exhibited notable growth in recent years, with the market size estimated at $9.7 billion in 2023 and expected to increase to $10.5 billion in 2024, marking a growth rate of around 9%. This rapid expansion has drawn the interest of foreign brands, many of which have entered the Indian market through direct investments or joint ventures, eager to capture a share of this thriving industry. The sector’s growth is driven by multiple factors, including rising household incomes, an increasing population, enhanced income levels, and a well-established network of organized retail channels, which have improved accessibility for consumers. Additionally, demand from end-use sectors such as housing, hospitality, and healthcare has created substantial opportunities for home textiles in India, positioning the country as a significant player in the global home textile trade.

Pros and strengths

Advanced knitting technology: The company has a set of automatic machinery for printing and dying also, set of imported German and Chinese machinery for circular knitting i.e. Mayer & Cie High Speed Circular Knitted, Mayer & Cie Circular Knitting Machine Model OVJA 1.6 Em 38 Diameter 20 Gauge, 2015 Years, 38'X20gx72f High Speed Double Jersey which helps in customization of the products, these machineries are fully automated in which the requisite designs are uploaded as per the requirement of the customer, which makes the weaving process faster and feasible. Currently, the company has 18 advanced knitting technology attached machineries. Its investment in these machineries will not only help to cater the growing demand from its customer but has also helped it to improve its functional efficiencies.

Government incentive: The company is located in the state of Uttar Pradesh and enjoy the benefits of subsidies under the Amended Technology Upgradation Fund Scheme (ATUFS) provided by the Government of India and Ministry of textiles towards Capital Investment Subsidy, it has been released after physical verification and certification. The Capital Investment Subsidy is released in full in one go on eligible investments made by unit. It will help the company to expand and also helps it to manage cash flows related to capital expenditures.

Sustained alliances: The company focuses on building sustained and long - term relationships with its clients as well as suppliers. It is only engaged in the B2B Business model, it has executed Memorandum of understanding with Sheela Foam Limited and Kurlon Enterprise Limited dated March 20, 2025 for supply of 3,00,000 meters of Printed Fabric and 13,00,000 meters of Circular Knit Fabric. The company’s existing relationship and goodwill serves as a competitive advantage in gaining new clients and increasing its business with existing clients, will constantly try to cater needs of customers.

Risks and concerns

Maximum revenue comes from limited customers: Maximum revenue of the company comes from few customers. The company has garnered 88.97%, 78.24% and 74.20% of its total revenue from top 10 customers in FY25, FY24 and FY23 respectively. The loss of one or more of these significant or key customers or a reduction in the amount of business it obtains from them could have an adverse effect on its business, results of operations, financial condition and cash flows.

Dependent on few suppliers for purchase of raw material: The company relies on a limited number of suppliers for the purchase of raw material, its dependence on few suppliers is significant. The company procured 83.61%, 69.06% and 62.54% of its raw material from top 10 suppliers in FY25, FY24 and FY23 respectively. The company cannot assure that it will be able to get the same quantum and quality of supplies, or any supplies at all, and the loss of supplies from one or more of them may adversely affect its purchases of raw material and ultimately its revenue and results of operations.

Geographical constrain: The company’s manufacturing unit is located at Meerut, Uttar Pradesh which exposes it to risks of concentration. Its success depends on its ability to successfully manufacture and deliver its products to meet its customer demand. Although, in the past it has not experienced instances of operating risks, however its manufacturing facility is susceptible to damage or interruption or operating risks. If the company experiences delays in production or shutdowns at its facility due to any reason, including disruptions caused by disputes with its workforce or any external factors, the company’s operations will be significantly affected, which in turn would have a material adverse effect on its business, financial condition and results of operations.

Outlook

Rachit Prints is engaged in the manufacturing of specialty fabrics for the mattress industry. The company manufactures specialty fabrics for mattresses, including knitted, printed, warp knit, and pillow fabric, along with binding tape. It also trades comforters and bedsheets. The company has advanced knitting technology coupled with well experienced management team. On the concern side, the company is dependent on few numbers of customers for sales and loss of any of this large customer may affect its revenues and profitability. Also, the company is dependent on few suppliers for purchase of raw material and loss of any of these large suppliers may affect its business operations.

The company is coming out with a maiden IPO of 13,08,000 equity shares of Rs 10 each. The issue has been offered in a price band of Rs 140-149 per equity share. The aggregate size of the offer is around Rs 18.31 crore to Rs 19.49 crore based on lower and upper price band respectively. On performance front, the revenue from sale of finished goods increased by 14.29% to Rs 4140.76 lakh for the fiscal year 2025 as compared to Rs 3,622.90 lakh in fiscal 2024. This is primarily due to increase in demand in domestic market. Moreover, the company reported 124.73% rise in net profit at Rs 456.18 lakh in FY25 as compared to Rs 202.99 lakh in FY24.

In a bid to cater the growing demand from its existing customers and to meet requirements of new customers, it intends to expand and upgrade its manufacturing capacities for existing products that it is in the process of developing and commercializing. It intends to increase its production capacity by way of installation of new machineries at its existing manufacturing facility. The company’s investment in the machineries will add on to its current installed capacity, thus, enabling it to cater to the growing demand from its customers and add new products in its existing product portfolio. It will continue to pursue such opportunities where it will add value to its business, its stakeholders and its customers.