Duroflex Limited IPO

01At a glance

What the company does: makes foam, mattresses, sofas, recliners, beds, pillows and furnishings under several brands at seven manufacturing facilities, producing all its mattresses and foam in-house (DRHP p.23). Mattresses were 54.74% of revenue and branded foam 36.75% in the June 2025 quarter (DRHP p.27).

Who pays it: households, through 73 company-owned stores and 5,576 trade stores, and online; offline channels were 82.00% of revenue in the June quarter (DRHP p.137).

Why it is raising money: ₹504.40 million to set up new company-owned stores, ₹421.32 million for lease and licence payments on existing stores and its seventh factory, ₹451.88 million for marketing and advertising, and the rest for general purposes (DRHP p.24).

How fast it has grown: slowly: revenue rose from ₹10,575 million in FY23 to ₹10,953 million in FY24 and ₹11,343 million in FY25, about 3.6% a year, and was ₹2,925 million in the three months to June 2025 (DRHP p.25, DRHP p.136).

The one thing to understand: a mature consumer brand using most of the fresh proceeds for running costs. Of the three named uses, rent and advertising together take ₹873.20 million, more than the ₹504.40 million for new stores (DRHP p.24, our arithmetic). Profit improved as advertising fell from 7.76% of revenue in FY24 to 6.44% in FY25 (DRHP p.136).

02The business, in plain words

A mattress company makes foam, converts it into mattresses and furniture, and sells through its own showrooms, multi-brand dealers and websites, and advertises its brands.

A family moving house wants a new mattress → it visits a Duroflex store or a dealer, or orders online → Duroflex makes the mattress from its own foam in one of its factories → it delivers and collects payment, directly or through the dealer.

Gross margin was 44.05% in the June quarter (DRHP p.136).

Earnings equation: Profit ≈ units sold × (price − foam, fabric and conversion cost) − advertising, store and staff cost. EBITDA margin was 7.24% in the June quarter (DRHP p.136).

03Where the money comes from

Source: DRHP p.136. Q1 FY26 is three months.

Source: DRHP p.136, DRHP p.137.

04The growth record

Source: DRHP p.25, DRHP p.136. Q1 FY26 is three months.

Our arithmetic: revenue grew about 3.6% a year from FY23 to FY25 (our arithmetic, DRHP p.25). The company's own indicators put return on capital employed at 2.63% in FY23, 5.59% in FY24 and 14.90% in FY25, and net working capital at 18.61 days in FY23, 13.84 in FY24 and 12.18 in FY25 (DRHP p.136).

05What the growth is made of

Branded foam, not mattresses. Foam revenue rose 25% from FY23 to FY25, while mattress revenue was flat and mattress units sold fell slightly (our arithmetic, DRHP p.136). Profit rose as advertising and promotion fell as a share of revenue (DRHP p.136).

06Earnings quality

Cash generation has exceeded profit in every period shown: ₹2,451.53 million of operating cash flow from FY23 to June 2025 against ₹485.28 million of profit (our arithmetic, DRHP p.25, DRHP p.136). Net working capital was 9.53 days at June 2025 (DRHP p.136). The June-quarter profit margin was 1.93% (DRHP p.136).

07The balance sheet

Source: DRHP p.25.

08What the money is for

Source: DRHP p.24.

09Who is selling

Source: DRHP p.24. Together they offer up to 22,564,569 shares; the split was not read for this study (DRHP p.23).

10Promoters

The promoters are Jacob Joseph George, Mathew Chandy, Mathew George and Mathew Antony Joseph (DRHP p.23). One criminal and one civil proceeding involving ₹8.32 million are pending against the promoters (DRHP p.27).

11Who already owns it

Source: DRHP p.24. The first and last rows are our arithmetic.

The only holders of 1% or more that are not promoters are Norwest Capital, LLC with 19.27% before the offer and Lighthouse India Fund III, Limited with 14.12% (DRHP p.106).

12What changed just before the IPO

• Debt: borrowings cut from ₹1,541 million in FY23 to ₹76 million (DRHP p.25).
• Advertising: down to 5.49% of revenue in the June quarter (DRHP p.136).
• Online: share of revenue fell from 23% in FY24 to 17 to 18% (DRHP p.137).
• Share split: each ₹10 share was split into ten ₹1 shares in October 2024 (DRHP p.95).
• Bonus issue: three shares for every five held, allotted 25 September 2025 at nil consideration, the last allotment before the offer (DRHP p.95).
• Public company: converted from a private limited company in September 2025 (DRHP p.235).
• Auditor: no change in the statutory auditor in the three years before the filing (DRHP p.82).
• Pre-IPO placement: none so far; up to ₹367.20 million may be placed before the RHP is filed (DRHP p.24).

13Capacity and expansion

Seven manufacturing facilities across India (DRHP p.23). The proceeds fund new company-owned stores and rent on existing stores and one factory (DRHP p.24).

14Market size and industry structure

The industry report cited in the offer document puts India's modern mattress market at ₹163 billion in FY2025 and projects ₹271 billion by FY2030, and the PU foam market at ₹198 billion rising to ₹366 billion (DRHP p.23). Those projections are the report's, and newboard has not tested them.

15Competitive position

What the document claims, and what it rests on:

• A house of brands covering the full range of mattress buyers (DRHP p.23).
• Vertical integration: all mattresses and foam made in-house (DRHP p.23).

Against that: dependence on its brands, two product categories for over 90% of revenue, and the cost of keeping those brands visible (DRHP p.27).

16Peers the company named

Source: DRHP p.134. The document names Sheela Foam as its only listed peer (DRHP p.134).

No P/E is possible for the company until a price band is set.

17Risks, in plain words

• Brands. Damage to its brands would hurt sales (DRHP p.27).
• Two categories. Mattresses and foam are over 90% of revenue (DRHP p.27).
• Slow growth. Revenue up about 3.6% a year (DRHP p.136).
• Advertising. Lower spend may not be sustainable (DRHP p.136).

18Litigation and regulatory matters

Source: DRHP p.27. The company has paid ₹15.73 million, and its subsidiary Shivarna ₹29.03 million, as pre-deposits under protest (DRHP p.27). Two criminal proceedings are pending against key managerial personnel (DRHP p.27).

19Related-party transactions

Not read in detail for this study.

20What the offer document does not say

In the sections read for this study, the document does not give:

• Why the company needs offer proceeds for rent and advertising when operating cash flow was ₹1,082 million in FY25, in the pages read.
• What the ₹707.41 million of claims against the company concern, mostly indirect tax, in the pages read.
• Why online sales fell as a share of revenue in FY25, in the pages read.
• What the criminal proceedings against key managerial personnel concern, in the pages read.
• The price band, lot size or issue dates, which is normal at DRHP stage.

21Five questions for management

1. Why fund rent and advertising from the offer rather than from operating cash flow?
2. Why have mattress volumes been flat for three years?
3. What drove the fall in online revenue share in FY25?
4. What are the indirect tax disputes worth ₹700 million about?
5. How many new stores will ₹504 million open, and where?

1Sources and cited facts

This study was read from 1 document the company filed. The 63 figures it cites are listed under the document each came from, with the page and the sentence as printed.