Dudani Retail Limited IPO

01At a glance

What the company does: designs and manufactures women's ethnic and fusion wear under the brand Divena, trades men's wear under Millennial Men and personal care products under Cosse, and makes garments for licensed labels of marketplace companies, from a rented Jaipur facility (RHP p.102, RHP p.118).

Who pays it: e-commerce marketplaces and platforms, including Myntra, Amazon, Flipkart, Ajio, Nykaa Fashion, Tata Cliq and Snapdeal, and the company's own brand websites (RHP p.103). One customer was 37.37% of FY26 revenue and the top five 63.56% (RHP p.118). India was 99.48% of FY26 revenue (RHP p.121).

Why it is raising money: ₹396.70 lakh for working capital, ₹300.00 lakh to repay a Kotak Mahindra Bank cash credit facility, ₹79.20 lakh for embroidery machinery and ₹150.00 lakh for general corporate purposes, with ₹128.54 lakh of issue expenses (RHP p.19, RHP p.73).

How fast it has grown: revenue was ₹2,511.89 lakh in FY24, ₹2,527.72 lakh in FY25 and ₹2,458.75 lakh in FY26, so about 1.1% a year lower, while profit after tax rose from ₹99.38 lakh to ₹190.13 lakh, about 38.3% a year (our arithmetic, RHP p.46).

The one thing to understand: the profit doubled on flat revenue, and it came out of costs rather than sales. Total expenses fell from 94.60% of turnover in FY24 to 89.62% in FY26, while revenue went nowhere, and operating cash flow was negative in both FY25 and FY26 as inventory rose from ₹698.30 lakh to ₹1,210.03 lakh (RHP p.45, RHP p.47, RHP p.214).

02The business, in plain words

The company designs a garment, buys the fabric, has it dyed, printed and embroidered by outside job workers, stitches it partly in its own Jaipur workshop and partly outside, then sells it to e-commerce marketplaces or through its own websites. It also buys in men's wear and personal care products to resell, and stitches garments to order for labels licensed by marketplace companies.

A marketplace lists a Divena kurta set → a shopper orders it → the company has already cut, stitched and finished it in Jaipur, with dyeing, printing and embroidery done by job workers → the company is paid by the marketplace, net of commission.

The company was incorporated in December 2015 as Dudani Retail Private Limited and became a public company in March 2025 (RHP p.102). It works from the third and fourth floors of a rented building of 18,714.922 square feet at Kartarpura Industrial Area, Jaipur, which hold the registered office, the manufacturing unit, storage and packing (RHP p.75). It had a permanent workforce of 33, including its directors, at August 31, 2026, and relies on a network of outside job workers for the rest (RHP p.121).

Earnings equation: Profit ≈ garments sold × realisation − fabric − job work, stitching and other manufacturing charges − marketplace commission and freight − interest on the inventory and receivables. In FY26 cost of material consumed was ₹820.24 lakh, 33.36% of turnover, and other expenses ₹1,265.25 lakh, 51.46% (RHP p.214, RHP p.215).

03Where the money comes from

Source: RHP p.121. The Prospectus does not split revenue between the Divena, Millennial Men and Cosse brands, or between own-brand sales, licensed manufacturing and trading, on the pages read.

Concentration is heavy and it is on the customer side:

Source: RHP p.118. In rupees the largest customer fell from ₹1,200.52 lakh in FY25 to ₹918.89 lakh in FY26, which is more than the whole fall in revenue; so the concentration eased because the largest account shrank, not because new business replaced it (our arithmetic, RHP p.118). None of the customers is named in the concentration table. Purchases are concentrated too: the largest supplier was 44.17% of FY26 purchases and the top five 77.38% (RHP p.118).

04The growth record

Source: RHP p.47, RHP p.85. Total borrowings were ₹352.80 lakh, ₹402.93 lakh and ₹481.95 lakh, a debt to equity ratio of 0.53, 0.48 and 0.47 (RHP p.85). Return on net worth was 15.02%, 21.19% and 18.46%, and return on capital employed 23.91%, 31.60% and 25.88% (RHP p.85).

Our arithmetic over FY24 to FY26: revenue about 1.1% a year lower, EBITDA about 28.1% a year higher and profit about 38.3% a year higher; EBITDA margin rose 487 basis points and PAT margin 377 basis points. The company reports the same margins and the same profit growth of 55.57% in FY24, 79.02% in FY25 and 6.86% in FY26 (RHP p.85). Note that earnings a share are stated after retrospective effect of the December 2024 bonus issue, which is why EPS of ₹1.47 for FY24 is on 67,50,000 shares rather than the 20,00,000 then in issue (RHP p.82).

05What the growth is made of

Costs, not sales. Revenue fell 2.73% in FY26, which the Prospectus puts down to "lower sales volumes, particularly through the e-commerce channel" (RHP p.214). Against that, cost of material consumed fell from 36.04% of turnover in FY25 to 33.36% in FY26, and other expenses from 56.75% to 51.46%, which the Prospectus attributes to lower manufacturing expenses, commission, freight and miscellaneous expenses in line with the reduced turnover (RHP p.214, RHP p.215). Profit before tax rose ₹8.48 lakh on a ₹68.97 lakh fall in revenue (RHP p.215).

The larger step was FY25 over FY24, when revenue rose 0.63% and profit rose 79.02% as total expenses fell from 94.60% to 90.24% of turnover, again described as cost rationalisation (RHP p.215). The Prospectus does not disclose garments sold, average realisation or gross margin by product, so none of this can be separated into volume and price. That is the finding: across three years the top line has stayed between ₹2,458.75 lakh and ₹2,527.72 lakh, and the profit has almost doubled out of the cost lines.

06Earnings quality

The item that needs explaining is inventory. Stock rose ₹511.73 lakh over three years while revenue fell, and the change in inventories line added back ₹66.25 lakh, ₹317.56 lakh and ₹137.79 lakh to profit in FY24, FY25 and FY26 as finished goods and work in progress built up (our arithmetic, RHP p.45, RHP p.46).

At March 2026 inventory of ₹1,210.03 lakh was 73.1% of a balance sheet of ₹1,701.43 lakh and about 1.5 times the year's material cost (our arithmetic, RHP p.45). That build-up is why the three years of profit produced no operating cash. The Prospectus does not age the inventory or say how much of it is past-season stock.

Two smaller items are stated plainly. Provident fund dues of ₹1,49,733 are outstanding for a long list of wage months running from March 2015 to June 2025 (RHP p.219, RHP p.220). And trade payables to micro and small enterprises rose from nil at March 2024 to ₹30.03 lakh at March 2026 (RHP p.45).

07The balance sheet

At March 31, 2026 total assets were ₹1,701.43 lakh: inventories ₹1,210.03 lakh, trade receivables ₹374.21 lakh, other current assets ₹67.13 lakh, property plant and equipment ₹21.19 lakh, intangible assets ₹0.48 lakh, deferred tax assets ₹12.22 lakh, other non-current assets ₹12.40 lakh and cash of ₹3.76 lakh (RHP p.45). Against that, short-term borrowings were ₹429.00 lakh and long-term borrowings ₹52.95 lakh, trade payables ₹79.90 lakh of which ₹30.03 lakh is owed to micro and small enterprises, other current liabilities ₹21.31 lakh and provisions ₹82.95 lakh, leaving net worth of ₹1,029.83 lakh (RHP p.45).

The borrowing that matters is a ₹475.00 lakh cash credit facility from Kotak Mahindra Bank sanctioned on January 25, 2025 at the bank's repo-linked rate plus 2.60%, of which ₹348.13 lakh was outstanding at September 9, 2026 (RHP p.76). There are no contingent liabilities (RHP p.48).

After the issue: at ₹29 the fresh issue brings in ₹1,054.44 lakh gross and ₹925.90 lakh net of ₹128.54 lakh of issue expenses, against net worth of ₹1,029.83 lakh, so net worth roughly doubles; ₹300.00 lakh of it repays the cash credit facility, which on the company's own figures would leave borrowings of about ₹181.95 lakh (our arithmetic, RHP p.45, RHP p.74, RHP p.76). Net asset value a share is stated as ₹15.26 before the issue and ₹20.07 after it (RHP p.83).

08What the money is for

Source: RHP p.19, RHP p.73. The whole of the net proceeds is scheduled for deployment in FY2026-27 (RHP p.74).

The machinery is a computerised embroidery machine and related equipment, for which quotations have been obtained, to bring in-house the embroidery now given to outside job workers; it needs about 1,000 square feet inside the existing premises (RHP p.75).

The working capital object takes the company's stated gap from ₹1,497.32 lakh at March 2026 to an estimated ₹1,974.76 lakh at March 2027, with short-term borrowings falling from ₹429.00 lakh to ₹95.12 lakh and internal accruals rising from ₹1,068.32 lakh to ₹1,482.94 lakh (RHP p.76). The debt repayment is the Kotak Mahindra Bank cash credit facility (RHP p.76).

The fund requirement is based on internal management estimates and has not been appraised by any bank or financial institution (RHP p.73).

Into the business the whole issue: up to 36,36,000 new shares at ₹29, ₹1,054.44 lakh, of which ₹925.90 lakh is net proceeds (RHP p.74). To selling shareholders nothing: there is no offer for sale (RHP p.73).

09Who is selling

No one. The issue is a fresh issue of up to 36,36,000 shares by the company, of which 1,84,000 shares worth ₹53.36 lakh are reserved for the market maker, Prabhat Financial Services Limited, leaving a net issue of 34,52,000 shares worth ₹1,001.08 lakh (RHP p.59, RHP p.73). The issue is fully underwritten by Finshore Management Services Limited, the lead manager, for 15% and by Prabhat Financial Services Limited for the balance (RHP p.55).

10Promoters

The promoters are Akshay Dudani, aged 47, Managing Director, a commerce graduate with a master of business administration and over 10 years of experience; and Charu Dudani, aged 41, Whole-time Director, an arts graduate with a master of journalism and mass communication and 9 years of experience (RHP p.151). The Prospectus records Akshay Dudani as the son of the late Subhash Chander Dudani, and Charu Dudani as the spouse of Akshay Dudani (RHP p.151).

Between them they hold 67,49,955 of the 67,50,000 shares, effectively the whole company: Akshay Dudani 48,59,955 shares or 72.00% and Charu Dudani 18,90,000 or 28.00% (RHP p.19, RHP p.151). Neither holds a directorship in any other company; Akshay Dudani HUF is listed as the only other venture (RHP p.151). There has been no change of control in the five years before the Prospectus (RHP p.152).

Promoter economics: the stated average cost of acquisition is ₹3.06 a share for Akshay Dudani and ₹4.92 for Charu Dudani, against the issue price of ₹29, and neither acquired any share in the last year (RHP p.22).

The holdings were built from the 2015 subscription at ₹10, two loan conversions at ₹30.20 in April 2021 and ₹50.22 in March 2022, and three bonus issues: 3 for 2 in October 2020, 1 for 1 in March 2023 and 2,375 for 1,000 in December 2024, the last of which alone created 47,50,000 shares out of reserves (RHP p.60, RHP p.61).

Remuneration to the two promoters was ₹9.00 lakh each in FY24 and ₹10.00 lakh each in FY25 and FY26 (RHP p.49).

The Prospectus records no criminal proceedings, no regulatory or statutory action and no material civil litigation against the promoters or directors, and no SEBI or exchange penalty in the last five fiscal years (RHP p.220). One income-tax matter is open against Akshay Dudani: a letter of March 14, 2026 seeking advance tax for the quarter, to which no reply has been filed, with the amount recorded as unascertainable (RHP p.220).

11Who already owns it

Source: RHP p.19. There is no promoter group shareholder, no private equity or venture capital holder, no institution and no employee stock option scheme (RHP p.20, RHP p.62). On full allotment the count rises to 1,03,86,000 shares and the promoters would hold 64.99%, Akshay Dudani 46.79% and Charu Dudani 18.20% (RHP p.19, RHP p.59). The securities premium account was ₹0.93 lakh before the issue and would be ₹691.77 lakh after it (RHP p.59). The company identifies no group company under the SEBI regulations (RHP p.226).

12What changed just before the IPO

• A very large bonus issue. 47,50,000 shares were allotted on December 6, 2024 in the ratio 2,375 for 1,000, taking the count from 20,00,000 to 67,50,000 out of reserves; reserves and surplus accordingly fell from ₹461.78 lakh at March 2024 to ₹164.70 lakh at March 2025 (RHP p.45, RHP p.61).
• The company became a public company on March 6, 2025 (RHP p.102).
• A new cash credit facility of ₹475.00 lakh was sanctioned by Kotak Mahindra Bank on January 25, 2025, and ₹300.00 lakh of it is to be repaid from the issue (RHP p.76).
• Profit rose while revenue did not. Profit after tax went from ₹99.38 lakh in FY24 to ₹190.13 lakh in FY26 on revenue that fell from ₹2,511.89 lakh to ₹2,458.75 lakh (RHP p.46).
• Operating cash flow turned negative, at ₹16.31 lakh out in FY25 and ₹45.81 lakh out in FY26 against ₹32.17 lakh in in FY24 (RHP p.47).
• Inventory rose 73.3% over the two years, from ₹698.30 lakh to ₹1,210.03 lakh (our arithmetic, RHP p.45).
• The largest customer shrank from ₹1,200.52 lakh of revenue in FY25 to ₹918.89 lakh in FY26 (RHP p.118).
• A board and secretarial team was put in place. Two independent directors and a non-executive director were appointed, sitting fees of ₹0.90 lakh were paid for the first time in FY26, and a company secretary and chief financial officer were paid salaries of ₹2.45 lakh and ₹3.85 lakh (RHP p.49, RHP p.138).
• Dues to micro and small enterprises appeared, nil at March 2024 and ₹30.03 lakh at March 2026 (RHP p.45).
• No pre-IPO placement and no share split or consolidation in the year before the Prospectus (RHP p.22, RHP p.23).

13Capacity and expansion

Source: RHP p.75, RHP p.123. The Prospectus states plainly that installed capacity cannot be meaningfully quantified in standard units, because output depends on garment type, design complexity, fabric and order-specific customisation, and because dyeing, printing and embroidery sit outside the company with job workers (RHP p.123). It gives no utilisation figure and no production volume in pieces. What the ₹79.20 lakh of machinery adds, on the company's own account, is control over the embroidery step: fewer third-party dependencies, shorter turnaround and, it says, better margins (RHP p.75). The Prospectus does not state how many garments the new machines will embroider or what they save a piece.

14Market size and industry structure

As claimed: the Prospectus states that the Indian textiles and apparel market is projected to grow at a 10% compound rate to US$ 2.3 billion by 2030, that India is among the top five global exporters in several textile categories with exports expected to reach US$ 100 billion, and that the technical textiles industry was US$ 29 billion in 2024 and is projected at US$ 45 billion by 2026. For the quarter April to June 2025 it puts total textile and apparel exports including handicrafts at US$ 9.40 billion, of which ready-made garments were 45% (RHP p.18).

The part that is addressable: women's ethnic and fusion wear and men's wear sold in India through e-commerce marketplaces, which is 99.48% of the company's revenue (RHP p.121). The Prospectus does not size that part.

What the company is today: ₹2,458.75 lakh of FY26 revenue, one rented floor of machines, 33 permanent employees and a customer list of marketplaces (RHP p.46, RHP p.121).

One caveat belongs with all of the figures above. The company states that it has neither commissioned an industry report nor sought consent for the industry disclosures, which are based on industry data available online and have not been independently verified (RHP p.35). On structure, the Prospectus describes the fashion and personal care markets as highly competitive with numerous domestic and international brands, and Divena as facing both established and emerging brands (RHP p.121).

15Competitive position

Source: RHP p.85. The company states that the peers are not strictly comparable given the nature and size of the businesses, and are included for broad comparison only (RHP p.84).

Why a marketplace lists this company's garments rather than another's, on the Prospectus's own account: in-house design, a network of job workers for specialised steps, quality control through the production chain, and a multi-channel presence across seven named marketplaces and its own websites (RHP p.103, RHP p.121). Against that, the company owns no factory building, does not do its own dyeing, printing or embroidery, depends on one customer for 37.37% of revenue and one supplier for 44.17% of purchases, and its two promoters are the whole management (RHP p.118, RHP p.123).

16Peers the company named

Peers named in the offer document: Nandani Creation, Purple United Sales and Mish Designs (RHP p.84).

All three are small listed apparel companies, and the set is a reasonable one by activity, but the spread is wide: Purple United Sales is about 6.9 times the company's size by revenue and profitable at a 8.90% margin, Nandani Creation is about 4.6 times its size but earns a 1.76% margin, and Mish Designs is about a third of its size and lost money in FY26 (our arithmetic, RHP p.85).

At market prices of September 9, 2026 the three traded at 23.70, 26.72 and a negative 11.27 times FY26 earnings; the Prospectus reports the industry average as 7.73, which is the arithmetic mean including the loss-maker, and the median of the three is 23.70 (RHP p.83, RHP p.84). Return on net worth was 3.35%, 22.30% and a negative 6.00% against the company's 18.46% (RHP p.84).

17Valuation at the issue price

At the fixed issue price of ₹29, with all 36,36,000 new shares added to the 67,50,000 in issue (our arithmetic, RHP p.59):

Source: RHP p.46, RHP p.59, RHP p.83. On the net asset value of ₹20.07 a share the Prospectus states for the position after the issue, the price is 1.4 times book (our arithmetic, RHP p.83). Enterprise value, taking March 2026 borrowings of ₹481.95 lakh and cash of ₹3.76 lakh, is ₹3,490.13 lakh, 11.8 times FY26 EBITDA of ₹296.81 lakh (our arithmetic, RHP p.45, RHP p.85). The issue price is 2.9 times the face value of ₹10 (RHP p.82).

Against the peers the Prospectus itself names, at market prices of September 9, 2026: 23.70 times for Nandani Creation, 26.72 for Purple United Sales and a negative 11.27 for Mish Designs, a median of 23.70 (RHP p.84). On the enlarged share count the issue is at 15.8 times FY26 profit, 33% below that median; on the Prospectus's own per-share basis it is at 10.3 times, 57% below it (our arithmetic, RHP p.83, RHP p.84). The comparison rests on three companies, one of which lost money, so the median is the middle of a very short list.

18Risks, in plain words

Customers, and one of them in particular: the largest customer was 37.37% of FY26 revenue and the top five 63.56% (RHP p.118) → losing one marketplace relationship takes a large slice of revenue at once → that largest account has already shrunk by ₹281.63 lakh between FY25 and FY26 (our arithmetic, RHP p.118).

Revenue that is not growing: revenue was ₹2,511.89 lakh in FY24 and ₹2,458.75 lakh in FY26, and the Prospectus attributes the FY26 fall to lower e-commerce volumes (RHP p.46, RHP p.214) → profit growth so far has come from cost lines, which cannot be cut indefinitely → total expenses are already down to 89.62% of turnover from 94.60% in FY24 (RHP p.215).

Cash tied up in stock: inventory rose from ₹698.30 lakh to ₹1,210.03 lakh across FY24 to FY26 while revenue fell (RHP p.45) → unsold fashion stock has to be funded and can lose value → operating cash flow was negative in both FY25 and FY26 (RHP p.47).

Suppliers and job workers: the largest supplier was 44.17% of FY26 purchases and the top five 77.38%, and dyeing, printing, embroidery and part of the stitching are outsourced (RHP p.118, RHP p.123) → a job worker's delay or quality failure becomes the company's delivery failure to a marketplace → the Prospectus says installed capacity cannot be quantified for that reason (RHP p.123).

Working capital and debt: the stated working capital gap was ₹1,497.32 lakh at March 2026, funded by ₹429.00 lakh of short-term borrowings and internal accruals (RHP p.76) → the business runs on a cash credit line → ₹348.13 lakh of it was outstanding at September 9, 2026 (RHP p.76).

Premises: the registered office, factory, storage and packing are all in rented premises at one Jaipur address (RHP p.75) → a single lease carries the whole operation → the Prospectus gives no alternative site.

Statutory dues: provident fund dues of ₹1,49,733 are outstanding for wage months running from March 2015 to June 2025, and three income-tax and TDS matters are open with ₹0.19 lakh demanded and two amounts unascertainable (RHP p.219, RHP p.220) → unpaid statutory dues attract interest and penalties → the company has 33 permanent employees, so the amounts are small in absolute terms.

Issue-specific: the fund requirement has not been appraised by any bank, ₹150.00 lakh of general corporate purposes is not broken down, issue expenses of ₹128.54 lakh are 12.19% of the issue, and the industry data in the Prospectus is unverified and used without consent (RHP p.19, RHP p.35, RHP p.73).

19Litigation and regulatory matters

There are no criminal proceedings against the company, the promoters or the directors, no regulatory or statutory action against the promoters or directors, no material civil litigation against the company, no indirect-tax claim and no contingent liability (RHP p.20, RHP p.48, RHP p.220). There are no group companies, so no group-company litigation (RHP p.226). Dues from the Employees' State Insurance Corporation are nil (RHP p.220).

20Related-party transactions

Source: RHP p.49. The borrowing and interest rows are our arithmetic on the recipients the table lists.

The table is short because the company has no group company and no corporate promoter (RHP p.226). What it shows is a family business being tidied up before listing: the director loans that ran through FY24 and FY25 were repaid and stopped, ₹2.58 lakh of rent paid to Sushila Dudani in FY24 stopped, and remuneration to Sushila Dudani of ₹8.00 lakh in FY24 and ₹5.18 lakh in FY25 stopped altogether in FY26 (RHP p.49).

What appeared in the two years before the filing is the professional layer: salaries to Ashok Kumar Pingoliya as chief financial officer of ₹3.85 lakh and Ramgopal Sharma as company secretary of ₹2.45 lakh, and sitting fees of ₹0.30 lakh to Rahul Sharma and ₹0.60 lakh to Madhvi Sharma, all first paid in FY26 (RHP p.49).

Amounts outstanding at March 2026 were ₹3.60 lakh payable to Akshay Dudani, ₹4.00 lakh to Charu Dudani and ₹0.53 lakh to Ashok Kumar Pingoliya (RHP p.49).

21What the offer document does not say

Revenue is not split between the Divena, Millennial Men and Cosse brands, or between own-brand sales, licensed manufacturing and trading, on the pages read. No customer in the concentration table is named, so the 37.37% account cannot be identified. Garments sold, average realisation and gross margin by product are not disclosed, so the profit improvement cannot be separated into price, mix and cost.

Installed capacity and utilisation are not quantified, and the Prospectus says they cannot meaningfully be. The age profile of the ₹1,210.03 lakh of inventory is not given. Marketplace commission rates and return rates are not disclosed. The ₹150.00 lakh of general corporate purposes is not broken down. The company has commissioned no industry report and has not verified the industry data it prints.

22Five questions for management

1. How many garments were sold in each of FY24, FY25 and FY26, and at what average realisation?
2. How old is the ₹1,210.03 lakh of inventory at March 2026, and how much of it is from seasons already past?
3. Which customer was 37.37% of FY26 revenue, on what terms, and why did that account fall by ₹281.63 lakh?
4. What commission and return rates do the marketplaces charge, and how have they moved over the three years?
5. What is the expected saving a garment from bringing embroidery in-house on the ₹79.20 lakh of machinery, and at what volume does it pay for itself?

1Sources and cited facts

This study was read from 1 document the company filed. The 100 figures it cites are listed under the document each came from, with the page and the sentence as printed.