SIDDHI COTSPIN IPO

SIDDHI COTSPIN IPO

Dhan Kirti is pleased to bring you a comprehensive analysis of the upcoming SIDDHI COTSPIN IPO, offering investors an opportunity to understand the details, company background, financial objectives, and potential risks associated with this offering. As a Gujarat-based textile manufacturer, Siddhi Cotspin plays a significant role in the cotton yarn sector, and its IPO presents an important moment for both the company and potential investors. This detailed guide aims to equip you with all the essential information needed to make an informed decision regarding your investment.

IPO at a Glance

The Siddhi Cotspin IPO is structured to raise capital through a combination of fresh issue and offer for sale, aiming to support the company’s strategic growth initiatives and provide liquidity to existing shareholders. With a defined price band and lot size, investors can evaluate their participation based on their investment strategy and risk appetite. The listing on September 26, 2025, marks a crucial milestone for the company’s journey in the public markets.

Important Dates for Investors

• Opening Date: 19 Sep 2025
• Closing Date: 23 Sep 2025
• UPI Payment Deadline: 23 Sep 2025 (5 PM)
• Allotment Announcement: 24 Sep 2025
• Refund Processing: 25 Sep 2025
• Demat Credit: 25 Sep 2025
• Stock Market Listing: 26 Sep 2025
• Mandate Validity End: 08 Oct 2025
• Anchor Investor Lock-in Release (50%): 24 Oct 2025
• Anchor Investor Lock-in Release (Remaining): 24 Dec 2025

*Dates may be revised as per official updates.

Understanding these key dates is essential for any investor considering participation in the Siddhi Cotspin IPO. From the initial subscription period to the final listing on the stock exchange, each date plays a critical role in the IPO process. Investors should particularly note the UPI mandate deadline to ensure their applications are processed successfully and the allotment announcement date to check their allocation status.

Delving into Siddhi Cotspin’s Operations

Founded in 2015, Siddhi Cotspin operates in the dynamic textile manufacturing sector, specializing in the production and sale of high-quality cotton yarns. The company has established a state-of-the-art Greenfield project situated at Village Dholi, Dholka, Ahmedabad. This facility is equipped with 29,376 spindles, demonstrating a significant operational capacity dedicated to producing a diverse range of cotton and value-added yarns. With a robust production capacity of 90.12 lakh kg for cotton yarn and 135.80 lakh kg for value-added yarn, Siddhi Cotspin effectively caters to the broad demands of the textile industry.

The company is recognized for its unwavering commitment to stringent quality standards, ensuring that its products meet the exacting requirements of its clientele. Under the leadership of Managing Director Navin Saraogi, who brings over two decades of extensive experience in the textile industry, Siddhi Cotspin is not only focused on operational excellence but also places a strong emphasis on eco-friendly manufacturing processes. This commitment to sustainability is further underscored by its utilization of renewable energy sources in its operations, aligning with modern environmental stewardship principles and enhancing its market positioning as a responsible manufacturer.

Understanding the IPO’s Financial Structure

The Siddhi Cotspin IPO aims to raise a total of ₹69.85 crores. This total issue size is bifurcated into two primary components: a fresh issue and an offer for sale (OFS). The fresh issue component, amounting to ₹53.40 crores, signifies the capital that will directly flow into the company’s coffers, intended for funding its future growth initiatives and operational requirements. The offer for sale component, totaling ₹16.45 crores, involves existing shareholders selling a portion of their holdings. This component does not infuse fresh capital into the company but provides liquidity to the selling shareholders.

Strategic Allocation of Fresh Issue Proceeds

The proceeds from the fresh issue component of the IPO are strategically earmarked for several key objectives crucial to Siddhi Cotspin’s continued growth and financial health. A significant portion, 47% or ₹25.10 crores, is allocated towards meeting working capital requirements. This funding is vital for managing day-to-day operations, including raw material procurement, inventory management, and other operational expenses, ensuring smooth business continuity. Additionally, ₹8.97 crores (16.7%) is designated for the repayment or prepayment of existing borrowings, which will help in strengthening the company’s balance sheet by reducing its debt burden and potentially lowering interest costs. Another 15% (₹8.01 crores) is set aside for general corporate purposes, offering flexibility to address various strategic needs as they arise, such as business development, marketing initiatives, or unforeseen contingencies. The remaining 21.3% (₹11.32 crores) is allocated to miscellaneous purposes, allowing the company to adapt to evolving market conditions and pursue other growth-oriented opportunities.

Distinguishing Strengths of Siddhi Cotspin

• **Experienced Promoter and Management Team:** The company benefits significantly from a leadership team, including Managing Director Navin Saraogi, with extensive experience in the textile industry. This seasoned expertise provides strategic direction and operational acumen, which are crucial for navigating market challenges and capitalizing on opportunities.
• **Consistently Maintains Quality Standards:** Siddhi Cotspin has built a strong reputation for adhering to stringent quality control measures throughout its manufacturing process. This commitment ensures the production of high-grade cotton and value-added yarns, fostering customer loyalty and enhancing brand reputation in a competitive market.
• **Strong and Diversified Supplier Base:** The company has cultivated robust relationships with a broad network of suppliers. A diversified supplier base reduces reliance on a single source, mitigates supply chain risks, and ensures a consistent availability of quality raw materials, even amidst market fluctuations.
• **Optimal Utilisation of Resources:** Siddhi Cotspin prides itself on efficient resource management, including optimal utilization of its 29,376-spindle capacity and eco-friendly manufacturing processes. This efficiency leads to cost savings, improved productivity, and a reduced environmental footprint, enhancing overall operational profitability.
• **Long-standing Relationships with Our Customers:** The company has fostered enduring relationships with its clientele within the textile industry. These long-term partnerships are indicative of customer satisfaction and trust in Siddhi Cotspin’s products and services, providing a stable demand base and potential for repeat business.

Key Considerations and Potential Risks

• **Dependence on cotton prices which are volatile and subject to agricultural and global market conditions:** Siddhi Cotspin’s core business relies heavily on cotton as a primary raw material. The prices of cotton are inherently volatile, influenced by factors such as agricultural yields, weather patterns, global supply and demand dynamics, and geopolitical events. Significant fluctuations in cotton prices could directly impact the company’s cost of production, profit margins, and overall financial performance.
• **Limited geographic diversification with single manufacturing facility creating operational concentration risk:** The company operates primarily from a single Greenfield manufacturing facility in Gujarat. While this facility is state-of-the-art, having all operations concentrated in one location exposes the company to operational risks. Any localized disruptions, such as natural disasters, labor issues, or infrastructure failures at this site, could severely impact production capacity and business continuity.
• **Working capital intensive business model requiring continuous funding for raw material procurement:** The textile manufacturing sector, particularly yarn production, typically requires substantial working capital to manage inventory levels, procure raw materials (cotton), and cover operational expenses. Siddhi Cotspin’s business model is working capital intensive, implying a continuous need for funding to maintain smooth operations. Any constraints in accessing adequate working capital could affect its ability to purchase raw materials efficiently, fulfill orders, and capitalize on growth opportunities.

Current Investor Interest and Subscription Status

Subscription statistics based on the latest available information as of 5:00 PM on September 23, 2025:

The subscription figures indicate a significant level of interest across various investor categories. Qualified Institutional Buyers (QIBs) have shown robust demand, subscribing 17.53 times their reserved portion, highlighting confidence from institutional investors. Non-Institutional Investors (NIIs) also demonstrated strong participation with a subscription of 5.94 times. Retail Individual Investors (RIIs) subscribed 1.50 times their reserved shares, reflecting a healthy interest from individual participants. Overall, the IPO was subscribed 4.21 times, suggesting a positive reception from the market.

*GMP figures are unofficial and may vary; exchange data is more reliable. It is reported that the Grey Market Premium (GMP) for Siddhi Cotspin is ₹0 over the IPO price.

Participating in the Siddhi Cotspin IPO

Investors can participate in this IPO via the official Dhan Kirti IPO platform before the subscription closes. We encourage all interested investors to review the Red Herring Prospectus (RHP) for complete details and to consult with a financial advisor before making any investment decisions. The Siddhi Cotspin IPO offers a unique opportunity to invest in a growing textile manufacturing company committed to quality and sustainability.