Rudra Cottex Limited IPO

01At a glance

What the company does: spins cotton bales into yarn at one mill at Dehgam, Gandhinagar, including a compact yarn made on a technology it calls EliTwist, and trades cotton bales and yarn alongside (DRHP p.245, DRHP p.246).

Who pays it: traders, agents, fabric manufacturers and merchant exporters, business to business; all export sales go through merchant exporters and are booked as domestic sales (DRHP p.247).

Why it is raising money: ₹480.00 million to expand and augment the mill, and ₹370.00 million to repay borrowings (DRHP p.122).

How fast it has grown: revenue from ₹2,223.54 million in FY24 to ₹3,453.33 million in FY26, and profit after tax from ₹99.97 million to ₹329.89 million (DRHP p.74).

The one thing to understand: ten customers were 96.17% of FY26 revenue and one of them 42.26%, while the money those customers owed at year-end rose seventeen-fold in two years (DRHP p.27, DRHP p.73).

02The business, in plain words

A spinning mill takes raw cotton, cleans it, combs or cards the fibres straight, and twists them into yarn that weavers and knitters turn into cloth. The measure of a mill is its spindles: this one has 27,360, which the company says can produce about 9,307.50 tonnes of yarn a year in counts from Ne 16 to Ne 40, the higher the count, the finer the yarn (DRHP p.246).

A weaver or a merchant exporter needs yarn of a particular count and strength → it orders through a trader or agent, or directly → the company spins it from cotton bales bought from ginners, traders and a government corporation, mostly in Gujarat → it is paid per kilogram.

Four yarns: EliTwist compact yarn, which the company treats as its value-added product for its strength, low hairiness and abrasion resistance; conventional compact yarn; carded yarn; and combed yarn (DRHP p.245). Beside spinning it trades, buying cotton bales and yarn and reselling them without processing, and sells the mill's waste, such as comber noil and cotton seed waste, to other industries (DRHP p.247).

Earnings equation: Revenue = tonnes of yarn × price per kilogram + trading turnover, and the spinning margin is the yarn price less the cotton price, over a largely fixed mill cost. The trading margin is thin by nature: in FY26 the company bought ₹1,205.43 million of stock-in-trade against ₹1,286.89 million of trading revenue (DRHP p.74, DRHP p.247).

03Where the money comes from

Source: DRHP p.247, certified by the statutory auditor on 17 September 2026.

Manufactured yarn was 59.72% of FY26 revenue and trading 37.27%. Trading swings: 42.16% of revenue in FY24, 24.03% in FY25, 37.27% in FY26 (DRHP p.247). Exports through merchant exporters were 7.05%, 19.28% and 9.30% of revenue across the three years (DRHP p.247).

Source: DRHP p.27. Revenue depends almost entirely on ten customers, and more so each year. In FY26 one customer took more than four rupees in ten, and ten took more than ninety-six. None is named. The company lists this as its first risk factor.

Purchases are less concentrated: the top ten suppliers were 57.68%, 45.46% and 60.40% of purchases, mostly from Gujarat (DRHP p.28).

04The growth record

Source: DRHP p.73, DRHP p.74, DRHP p.75, DRHP p.158. EBITDA is profit before tax plus finance costs and depreciation, less other income, computed from the restated statement of profit and loss; the document's own EBITDA figure was not read.

Revenue compounded at 24.6% a year over the two years, EBITDA at 42.3% and profit after tax at 81.6%. Most of the margin improvement came in FY25; in FY26 the EBITDA margin eased while the profit margin still rose (DRHP p.74). Earnings per share were ₹3.22, ₹7.71 and ₹10.64 (DRHP p.74).

Read from the filing: profit more than tripled on revenue up 55%, because a fixed-cost mill went from half-used to nearly full, section 04, while finance costs stayed near ₹120 million a year (DRHP p.74).

05What the growth is made of

Revenue rose ₹1,229.79 million between FY24 and FY26. Manufactured yarn accounts for ₹937.73 million of it, from ₹1,124.77 million to ₹2,062.50 million, and trading for ₹349.51 million (DRHP p.247).

Capacity utilisation explains the manufacturing increase. Installed capacity stayed at 27,360 spindles throughout, and utilisation went from 56.61% in FY24 to 94.76% in FY26 (DRHP p.251), about 67% more yarn from the same machines. Manufactured-yarn revenue rose 83% over the same period. Read from the filing: volume did most of it, and the rest is a richer mix, with EliTwist compact yarn rising from 15.64% to 30.77% of revenue (DRHP p.247).

The document does not disclose tonnes produced or realisation per kilogram by yarn type in the parts read, so the split between volume, price and mix is an inference from utilisation, not a disclosure.

The trading line has no volume story to tell. It is cotton bales and yarn bought and resold, and its share of revenue has moved between a quarter and two-fifths year to year (DRHP p.247).

06Earnings quality

The line that needs explaining is receivables. They were eight days of revenue at the end of FY24 and eighty-seven at the end of FY26, and they absorbed ₹775 million of cash across FY25 and FY26 (DRHP p.73, DRHP p.75). That is why FY26 operating cash flow was ₹83.38 million against ₹329.89 million of profit. Read against section 02, the same two years saw the largest customer go from 27.50% to 42.26% of revenue. The document does not connect the two, and does not give a receivables ageing or say how much of the ₹822.89 million the largest customer owes.

Other income was 1.0% of FY26 profit before tax of ₹452.97 million (our arithmetic, DRHP p.74, DRHP p.160). The net working capital cycle was 147 days in FY26 (DRHP p.49).

07The balance sheet

At the end of FY26 total borrowings were ₹1,143.23 million, ₹917.53 million current, ₹225.70 million non-current, against net worth of ₹1,287.70 million, a debt-to-equity ratio of about 0.89× (DRHP p.73). Cash and cash equivalents were ₹11.16 million (DRHP p.73). Net debt, borrowings less cash, was ₹1,132.07 million, 1.7 times FY26 EBITDA (our arithmetic, DRHP p.73, DRHP p.74). Return on capital employed was 25.80% in FY26 (DRHP p.160). Property, plant and equipment was ₹809.81 million, with ₹48.96 million of capital work in progress and ₹184.71 million of other non-current assets, up from ₹10.00 million a year before (DRHP p.73).

The company raised ₹187.51 million in a private placement on 15 May 2026, after the balance-sheet date (DRHP p.93), computed here as 55,15,000 shares at ₹34.

Of the stated objects, ₹370.00 million repays borrowings, which against ₹1,143.23 million outstanding at 31 March 2026 is 32.4% of the debt (DRHP p.122). The expansion object adds to fixed assets. This is a judgement, not a disclosure: on those two lines alone, debt after the issue would be about ₹773 million on the FY26 balance sheet.

08What the money is for

The issue is a fresh issue of up to 1,25,00,000 equity shares of ₹10 face value. There is no offer for sale (DRHP p.1).

Source: DRHP p.122. The expansion's total estimated cost is ₹480.72 million, of which ₹0.72 million had been deployed by 31 July 2026.

Into the business the whole of it. The issue is entirely a fresh issue. To selling shareholders nil. There is no offer for sale (DRHP p.1).

Read from the filing: all deployment is scheduled for FY28, so the proceeds sit unused for most of the first year after listing. In the pages read, the document does not state how many spindles the expansion adds.

09Who is selling

Nobody. The offer-for-sale size is stated as not applicable and the whole issue is a fresh issue of up to 1,25,00,000 equity shares (DRHP p.1).

10Promoters

Three promoters, all executive directors since incorporation: Rahulkumar Abji Dholu, Radheshyam Parshottambhai Pokar and Patel Nilesh Kumar Babubhai (DRHP p.1, DRHP p.290).

Rahulkumar Abji Dholu, 43, is chairman and managing director. Rahulkumar Abji Dholu has not received formal education and has over ten years in the textile industry, and runs operations, commercial and financial matters and compliance (DRHP p.303, DRHP p.289). Radheshyam Parshottambhai Pokar, executive director, is a commerce graduate of Gujarat University and oversees human resources (DRHP p.289). Patel Nilesh Kumar Babubhai, 45, executive director, holds a diploma in civil engineering and runs manufacturing, supply chain and quality control, with over ten years in textiles (DRHP p.304, DRHP p.290).

Remuneration. On 5 and 7 September 2026, ten days before the DRHP, the board and shareholders fixed five-year terms for all three, from 7 September 2026, at a salary of ₹3.6 million each (DRHP p.290, DRHP p.291). Two of them were paid ₹1.26 million each in FY26 (DRHP p.71). Together the two were paid ₹2.32 million in FY24 and ₹2.52 million in FY26 (our arithmetic, DRHP p.71).

Promoter holding. The three promoters hold 69,35,000 shares, 18.99%; the promoter group holds a further 86,80,000, 23.77% (DRHP p.105). Together that is 42.76%, the family does not hold a majority before the issue.

Litigation. No criminal proceeding, regulatory action or material civil matter by or against the promoters, and no SEBI or exchange disciplinary action in the last five fiscals (DRHP p.402).

11Who already owns it

Source: DRHP p.117, DRHP p.93. The last row is the balance, computed here. Beyond these, the register runs to many individual holders of 1.70% to 3.40% each (DRHP p.117).

The largest single shareholder is not a promoter. Amee D Shah came in on 15 May 2026 through a private placement of 55,15,000 shares at ₹34 each to eight allottees, including Shah Dhiren Mahendrakumar (HUF) with 14,70,589 shares and Fivex Capital VCC, Fivex Emerging Star Fund with 5,14,706 (DRHP p.93). That placement is the only recent outside price in the capital history read. Fivex Capital VCC - Fivex Emerging Star Fund holds 514,706 shares, 1.41% of the pre-issue capital (DRHP p.117).

This is a judgement, not a disclosure: on the full 1,25,00,000 fresh shares, post-issue capital would be 4,90,15,000 shares; the three promoters would hold about 14.15%, promoters and group together about 31.86%, and the issue would be about 25.50% of the enlarged capital.

12What changed just before the IPO

• The largest customer went from 27.50% to 42.26% of revenue in FY26, and the top ten from 89.58% to 96.17% (DRHP p.27).
• Trade receivables rose from ₹47.92 million to ₹822.89 million over two years (DRHP p.73).
• A private placement at ₹34 a share on 15 May 2026 brought in eight new holders, one of whom became the largest shareholder (DRHP p.93, DRHP p.117).
• Directors' terms and pay were reset ten days before the DRHP: five-year terms from 7 September 2026 at ₹3.6 million each (DRHP p.290).
• The chairman and managing director role was created for Rahulkumar Abji Dholu from 7 September 2026 (DRHP p.290).
• Capacity utilisation went from 56.61% to 94.76% on unchanged spindles (DRHP p.251).
• Sales of raw material to a firm with a common director stopped. Sales to Surya Future Tradewing LLP were ₹373.41 million in FY25 and nil in FY26, while purchases from it rose to ₹258.08 million (DRHP p.71).
• Capital spending restarted. ₹224.20 million of property, plant and equipment in FY26 against ₹0.96 million in FY24, and other non-current assets up from ₹10.00 million to ₹184.71 million (DRHP p.75, DRHP p.73).
• A VAT demand carried as contingent was provided for in FY26 (DRHP p.72).
• Public company: the company converted from a private to a public limited company, with a fresh certificate of incorporation dated September 2, 2026 (DRHP p.3).
• Auditor: Mistry & Shah LLP, statutory auditor since September 30, 2022, has completed its maximum term, and the board has recommended DTA & Associates for appointment at the AGM of September 30, 2026 (DRHP p.78).

13Capacity and expansion

Source: DRHP p.246, DRHP p.251.

The mill is effectively full. At 94.76%, further yarn volume needs the expansion the issue funds, which is why the largest object is capital expenditure on the same site. The document describes it as civil construction and equipment and plant and machinery to expand and augment the facility (DRHP p.122); the pages read do not state the spindles added or the date it is expected to run, beyond deployment in FY28.

Capacity is not revenue, but in this case utilisation is already near the ceiling, so the question for the expansion is whether the customer base, which is ten buyers, grows with it.

14Market size and industry structure

As claimed. The industry figures come from a Dun & Bradstreet report on the cotton yarn industry in India, dated September 2026, commissioned for the issue under an engagement letter of 25 June 2026 (DRHP p.245). It puts the Indian cotton yarn market at ₹770 billion in FY2025-26, about 48% of it carded yarn by value, and projects ₹820 billion in FY2026-27 rising to ₹1,010 billion by FY2029-30 (DRHP p.206, DRHP p.208).

The part that is addressable. Cotton yarn in counts Ne 16 to Ne 40, sold through traders, agents and merchant exporters, mostly in and from Gujarat. Cotton-bale trading is a different market, not part of the yarn figure.

What the company is today. Manufactured-yarn revenue of ₹2,062.50 million in FY26 is about 0.27% of the ₹770 billion market (DRHP p.247, DRHP p.206), computed here. It is a small mill in a very large, fragmented market.

Every industry figure above comes from a report commissioned by the issuer and is labelled as such.

15Competitive position

The three listed peers the company names are in section 15; Rudra is the smallest by revenue apart from Shiva Texyarn, and has the highest return on net worth of the four (DRHP p.159).

What the document gives as the basis for its position is a value-added product, EliTwist compact yarn, which it describes as stronger and less hairy than conventional compact yarn, an integrated semi-automated mill, and customised yarn for B2B buyers on count, twist and strength (DRHP p.245, DRHP p.247). It also reports rising utilisation without new capacity as a strength (DRHP p.251).

Read from the filing: a spinning mill's position rests on cotton procurement cost, mill efficiency and whether its buyers come back. The document evidences efficiency; on buyers, it shows ten customers taking 96.17% of revenue (DRHP p.27), which is a relationship, not a market position. It does not state whether EliTwist is proprietary to the company or a technology others can install.

16Peers the company named

Peers named in the offer document: Aastha Spintex Limited, Ambika Cotton Mills Limited and Shiva Texyarn Limited (DRHP p.159).

Source: DRHP p.159, peer prices as at 31 July 2026 on NSE.

The set is coherent, all three are cotton spinners of broadly similar size, within a factor of about two of this company's revenue. The price-to-earnings range the peers print runs from 9.84× to 20.84×. Where this issue sits against that cannot be said until a price band exists, which is section 16's subject.

17Risks, in plain words

Customers. One customer was 42.26% of FY26 revenue and ten were 96.17% (DRHP p.27). If the largest reduces its orders, nearly half the business goes with it, and the company names none of them.

Collections. Receivables were 87 days of revenue at the end of FY26, against 8 two years earlier (DRHP p.73). Collections from a concentrated customer base are where the cash went.

Input. Cotton is most of the cost and its price moves with the crop. Top ten suppliers were 60.40% of FY26 purchases, mostly in Gujarat (DRHP p.28).

Capacity. The mill ran at 94.76% in FY26 (DRHP p.251). Growth in yarn now needs the expansion, whose output and commissioning date the pages read do not give.

Financial. Borrowings were ₹1,143.23 million at the end of FY26 against ₹11.16 million of cash, and finance costs about ₹126 million a year (DRHP p.73, DRHP p.74).

Trading. Up to two-fifths of revenue is traded cotton and yarn at a thin margin, and the share swings year to year (DRHP p.247).

Related party. Raw material bought from and, until FY25, sold to a firm with a common director or partner (DRHP p.71).

18Litigation and regulatory matters

Source: DRHP p.401, DRHP p.402.

The single material matter is one the company has brought: a petition before the Gujarat High Court for a refund of ₹105.92 million of GST and IGST paid on capital goods imported under the EPCG scheme between 1 July and 12 October 2017, the transition period the document calls the blackout period (DRHP p.401). Tax proceedings were not read for this study.

19Related-party transactions

Source: DRHP p.71. Surya Future Tradewing LLP is described as having a common director or partner.

The pattern is the finding. In FY25 the company sold ₹373.41 million of raw material to Surya Future Tradewing, 13.52% of revenue, and bought ₹82.65 million from it; in FY26 the sales stopped and the purchases tripled (DRHP p.71). The document does not say which director or partner is common, or on what terms the trade is priced.

20What the offer document does not say

• No customer names, for a business whose top ten are 96.17% of revenue (DRHP p.27).
• No receivables ageing or split by customer, against receivables of 87 days (DRHP p.73).
• No spindles added or commissioning date for the ₹480.00 million expansion, in the pages read (DRHP p.122).
• No tonnes or realisation per kilogram by yarn type, in the pages read.
• No explanation of which director or partner connects the company to Surya Future Tradewing LLP, or why sales to it stopped (DRHP p.71).
• No statement of whether EliTwist is proprietary or a technology available to other mills.
• No price band, lot size or issue dates, which is normal at DRHP stage.

21Five questions for management

1. The largest customer went from 27.50% to 42.26% of revenue in FY26. Who is it, how long has it bought from the company, and how much of the ₹822.89 million of receivables at 31 March 2026 is it?
2. Receivables went from 8 days to 87 days in two years. What are the credit terms now, and what were they in FY24?
3. How many spindles will the ₹480.00 million expansion add, and which customers is that yarn for?
4. Who is the common director or partner in Surya Future Tradewing LLP, and why did the company supply it ₹373.41 million of raw material in FY25 and none in FY26?
5. Is EliTwist the company's own process, or a spinning system any mill can acquire and install?

1Sources and cited facts

This study was read from 1 document the company filed. The 85 figures it cites are listed under the document each came from, with the page and the sentence as printed.