Saraswati Saree Depot IPO Listed at 30% Premium Over Issue Price

Saraswati Saree Depot IPO made an impressive entry into the stock market on Tuesday, August 20, 2024, with its shares listing at ₹160 per share, the upper end of its IPO price band. The IPO, which opened for subscription from August 12 to August 14, 2024, was met with substantial enthusiasm, leading to a remarkable overall subscription rate of 107.39 times. This strong demand was primarily driven by non-institutional investors, who subscribed an extraordinary 358.47 times. Within this category, larger non-institutional investors (bNII) subscribed 389.28 times, while smaller non-institutional investors (sNII) subscribed 296.85 times.

Qualified Institutional Buyers (QIBs) followed with a subscription rate of 64.12 times, and retail investors subscribed 61.59 times. These figures underscore investors' high level of confidence in the company's business model and future growth prospects.

Saraswati Saree Depot IPO was structured as a fresh issue and an Offer for Sale (OFS). The fresh issue involved 0.65 crore shares, raising ₹104.00 crores, while the OFS comprised 0.35 crore shares, aggregating ₹56.02 crores. In total, the IPO raised ₹160.01 crores. The fresh issue proceeds are expected to bolster the company’s capital base, supporting its expansion and operational needs, while the OFS partially allowed existing shareholders to exit their investments.

Founded in 1996, Saraswati Saree Depot Limited has established itself as a key player in the wholesale women’s apparel industry, particularly in the saree segment. The company primarily operates in the B2B segment, sourcing products from over 900 weavers and suppliers across India. Its extensive product catalogue features more than 300,000 SKUs, and the company has a strong presence in India's southern and western regions, including Maharashtra, Goa, Karnataka, and Tamil Nadu. By the end of fiscal 2024, Saraswati Saree Depot had served over 13,000 unique customers, demonstrating its significant market reach.

Financially, Saraswati Saree Depot has shown consistent growth. For the fiscal year ending March 31, 2024, the company's revenue increased by 2% to ₹612.58 crores, up from ₹603.52 crores in the previous year. The profit after tax (PAT) saw a more substantial increase of 29%, rising from ₹22.97 crores in FY23 to ₹29.53 crores in FY24. The company’s assets grew to ₹205.94 crores in FY24 from ₹188.85 crores in FY23, reflecting its solid financial footing.
The robust subscription figures across all investor categories—especially the non-institutional investors—highlight the high level of market confidence in Saraswati Saree Depot. The company’s strong financial performance, strategic market positioning, and established operational base make it an appealing choice for long-term investors.

To Summarize

Saraswati Saree Depot Limited has made a significant impact with its IPO, listing at the upper end of its price band reflecting strong investor confidence. The overwhelming subscription rates, particularly from non-institutional investors, underscore the market's belief in the company’s growth potential. The funds raised through the fresh issue will support the company’s expansion plans, further strengthening its position in the market. Despite the aggressive pricing, which could lead to short-term volatility, Saraswati Saree Depot’s solid fundamentals and consistent financial growth suggest that it will remain an attractive investment opportunity in the long term.