S.R.G. Narrow Fab Limited IPO

01At a glance

What the company does: weaves, knits and crochets narrow elastic tapes from yarn and rubber thread, for garments, innerwear, luggage, furniture, footwear and medical uses, at two units in Sachin GIDC, Surat (DRHP p.166, DRHP p.167).

Who pays it: 470 customers in FY26, against 201 in FY24, all in India (DRHP p.167, DRHP p.176). Direct customers other than dealers brought 53.76% of FY26 revenue and dealers 46.24% (DRHP p.177). The top customers are not named; the document gives the reason as confidentiality and the absence of their consent (DRHP p.36).

Why it is raising money: ₹10.0 crore of the fresh issue is for new looms and allied machines on the third and fourth floors of Unit 2, and ₹5.3 crore for working capital; the general corporate purposes amount is left blank (DRHP p.105). There is no offer for sale (DRHP p.1).

How fast it has grown: revenue from ₹29.4 crore in FY24 to ₹60.0 crore in FY26, about 43.0% a year, and profit after tax from ₹1.9 crore to ₹7.1 crore, about 91.6% a year (our arithmetic, DRHP p.69).

The one thing to understand: profit has not turned into cash. Operating cash flow was negative in all three years, −₹0.55 crore in FY26, because trade receivables rose from ₹5.5 crore at March 2024 to ₹41.5 crore at March 2026 (DRHP p.70, DRHP p.68). Receivable days went from 79 to 188 over the same years (DRHP p.114).

02The business, in plain words

What S.R.G. Narrow Fab does

S.R.G. Narrow Fab makes elastic tape: the stretchy narrow bands sewn into waistbands, bra straps, sock tops, bag straps, sofa seats and medical braces. It calls itself a textile-based elastic maker rather than a rubber goods maker, because its skill is weaving and knitting yarn around a rubber or spandex core (DRHP p.166). Its range covers woven, knitted, braided, medical, furniture, industrial and apparel elastics, and its product pages list luggage tape, crochet tape, solder elastic tape, plain woven tape, furniture elastic and name tape with a customer's brand woven in (DRHP p.166, DRHP p.173 to DRHP p.175).

A garment, luggage, furniture or footwear maker, or a dealer, needs elastic tape in a set width, stretch and colour → the company buys yarn and rubber, covers the rubber with yarn, warps it onto beams and runs it through needle looms or crochet machines, then dyes, finishes and packs it → it ships the rolls across India, mostly to Gujarat and Delhi → it is paid a price per metre, ₹4.48 a metre on average in FY26 (DRHP p.171, DRHP p.172, DRHP p.168, DRHP p.279).

Everything is made at two owned plots in Sachin GIDC, Surat: Unit 1 on Plot No. 4227 of 1,245.50 square metres, running since 2019, and Unit 2 on Plot No. 4105 of 1,344 square metres, running since 2021, which is also the registered office (DRHP p.181, DRHP p.44). At March 31, 2026 the two units had 141 needle looms, 42 crochet machines, 19 covering machines and 89 other machines (DRHP p.167). Installed capacity was 14.6 crore metres a year in FY26 and production 11.34 crore metres (DRHP p.188).

The company was incorporated in 2008 as Garble Narrow Fab Private Limited; its milestones record that the business was acquired under that name in 2019, renamed S.R.G. Narrow Fab Private Limited in February 2020 and converted to a public company in January 2025 (DRHP p.3, DRHP p.205). It has no subsidiary, associate or group company (DRHP p.206, DRHP p.234). It employed 182 people at March 31, 2026 and 169 at August 31, 2026, of whom 119 were machine operators (DRHP p.178).

Earnings equation: Revenue = metres of elastic sold × average price per metre. The document gives the average price, ₹4.48 a metre in FY26 and ₹3.56 in FY25 (DRHP p.279), and metres produced, but not metres sold. Read from the filing: at ₹4.48 a metre, FY26 revenue of ₹60.0 crore implies about 13.4 crore metres sold, more than the 11.34 crore metres produced; part of the gap may be the ₹5.5 crore of traded goods bought in FY26, but the document does not reconcile the two (our arithmetic, DRHP p.69, DRHP p.188).

03Where the money comes from

The company reports one segment and sells only in India (DRHP p.267, DRHP p.176). It does not split revenue by product. By state and by type of buyer it does:

Source: DRHP p.168, DRHP p.169, DRHP p.177. Gujarat and Delhi together were about 90.58% of FY26 revenue from sale of products (DRHP p.51). Revenue moved from Delhi to Gujarat over the three years: Gujarat sales went from ₹4.0 crore in FY24 to ₹29.5 crore in FY26, Delhi sales from ₹20.2 crore to ₹24.9 crore (DRHP p.168). The number of customers served went from 201 to 295 to 470 (DRHP p.167).

S.R.G. Narrow Fab customers: how concentrated the revenue is

Source: DRHP p.175. In FY26 the largest customer was 6.06% of revenue and the top ten 27.43%, so revenue does not rest on a few buyers in that year (DRHP p.175). FY25 was different: one customer took 21.66% and the top ten 53.20% (DRHP p.175).

Read from the filing: the FY25 largest customer's sales of ₹10.19 crore match exactly the sales to S.R.G. Elastics, a sole proprietorship of the promoter Dhiraj Ummedsingh Gunecha that trades in elastics, which the document gives as 21.67% of FY25 revenue (DRHP p.176, DRHP p.43, DRHP p.232). Sales to S.R.G. Elastics were ₹0.95 crore in FY24 and ₹1.04 crore in FY26, the same amounts as the fifth largest FY24 customer and the eighth largest FY26 customer (DRHP p.44, DRHP p.175, DRHP p.176). The document does not name its customers, so this match is arithmetic, not a disclosure.

On the supply side the dependence is higher: the top ten suppliers were 80.92% of FY26 purchases, the top five 61.05% and the largest 15.81% (DRHP p.34, DRHP p.177). Suppliers in Gujarat supplied 81.40% of FY26 raw material (DRHP p.172). There are no long-term supply contracts (DRHP p.34).

04The growth record

S.R.G. Narrow Fab financials: revenue, profit and margins

Source: DRHP p.69, DRHP p.70, DRHP p.68, DRHP p.124, converted from ₹ lakh. Return on net worth on year-end equity was 67.47%, 40.52% and 38.81% (DRHP p.122). Revenue went from ₹29.4 crore in FY24 to ₹60.0 crore in FY26 and profit after tax from ₹1.9 crore to ₹7.1 crore (DRHP p.69).

Our arithmetic over FY24 to FY26: revenue grew about 43.0% a year (our arithmetic, DRHP p.69), EBITDA about 53.0% a year (our arithmetic, DRHP p.124) and profit after tax about 91.6% a year (our arithmetic, DRHP p.69). EBITDA margin moved from 21.70% to 24.84%, up 314 basis points, so from 21.7% to 24.8% rounded (DRHP p.124). Revenue rose 60.14% in FY25 and 27.68% in FY26; FY24 itself was 4.06% below FY23 (DRHP p.124).

The year ends on March 31 throughout and no year was restated for a change in year end; the restatement adjusted only a ₹0.07 crore gratuity item from an earlier period (DRHP p.248). The FY24 accounts were audited by the previous auditor, A Baid & Co., and FY25 and FY26 by S K Kabra & Company (DRHP p.238).

What sits around the record:

• Cash: operating cash flow was −₹0.55 crore in FY26, −₹0.46 crore in FY25 and −₹0.01 crore in FY24 (DRHP p.70). Trade receivables rose ₹21.1 crore in FY26 alone (DRHP p.70).
• Other income was ₹0.01 crore, 0.1% of FY26 profit before tax of ₹9.7 crore (our arithmetic, DRHP p.69).
• Debt: borrowings were ₹37.0 crore at March 31, 2026 (DRHP p.68), debt to equity 2.02 times, about 2.0× (DRHP p.126), and net debt, borrowings less ₹0.70 crore of cash and bank balances, about 2.4× FY26 EBITDA (our arithmetic, DRHP p.68). Return on capital employed was 51.44%, so 51.4% rounded (DRHP p.124).
• Customers and suppliers: the largest customer was 6.06% of FY26 revenue, so 6.1% rounded, the top five 19.21% and the top ten 27.43% (DRHP p.175); the top ten suppliers were 80.92% of FY26 purchases (DRHP p.34).
• Related-party sales: sales to the promoter's proprietorship S.R.G. Elastics were 21.67% of FY25 revenue, so 21.7% rounded (DRHP p.43).
• Capacity: utilisation was 78% in FY26 (DRHP p.127).
• Contingent liabilities: none at March 31 of any of the three years (DRHP p.71).
• Tax: ₹4.1 crore of income tax remained unpaid at the date of the document, which the company intends to pay from internal accruals (DRHP p.44).
• Interest for paying suppliers late was ₹1.4 crore in FY26, a third of the ₹4.4 crore finance cost (DRHP p.259).
• Industry: the company sits in textiles, as a maker of narrow fabrics and textile accessories (DRHP p.166, DRHP p.145).

05What the growth is made of

Revenue rose ₹30.7 crore from FY24 to FY26 (our arithmetic, DRHP p.69). The company puts it down to more capacity and more output, and in FY26 to a higher price too (DRHP p.279).

Volume: installed capacity went from 9.6 crore metres in FY24 to 10.8 crore in FY25 and 14.6 crore in FY26, and production from 7.08 crore metres to 8.12 crore and 11.34 crore (DRHP p.188). That is about 60% more metres made over the two years (our arithmetic, DRHP p.188). The FY25 addition of 1.2 crore metres came from new machines on the second and third floors of Unit 1 and the first floor of Unit 2; the FY26 addition of 3.8 crore metres from further new machines (DRHP p.274).

Price: the average selling price fell about ₹0.80 a metre in FY25 against FY24, then rose to ₹4.48 a metre in FY26 from ₹3.56 in FY25 (DRHP p.280, DRHP p.279). So FY25 growth was all volume with a lower price, and FY26 growth was both.

Traded goods: in FY26 the company bought ₹5.5 crore of finished elastic to resell, against nothing in FY25, and ₹4.4 crore of it, 80.69%, came from S.R.G. Elastics (DRHP p.69, DRHP p.44). The company says this sale of traded goods is the main reason material cost fell as a share of income in FY26 (DRHP p.279).

Customers and geography: the customer count more than doubled and Gujarat replaced Delhi as the largest market (DRHP p.167, DRHP p.168).

The document does not give metres sold or revenue by product, so the increase cannot be split precisely between volume, price and traded goods. That is the finding.

06Earnings quality

The item that needs explaining is receivables. They went from ₹5.5 crore at March 2024 to ₹20.4 crore at March 2025 and ₹41.5 crore at March 2026, about 69% of FY26 revenue (DRHP p.68, our arithmetic). At March 2026, ₹16.0 crore, 38.5% of the total, was more than six months past due, including ₹0.7 crore more than two years old; none is classed as doubtful (our arithmetic, DRHP p.256).

The company says dealers and distributors get credit of up to 180 days, that it has no formal written credit policy, and that it projects receivable days of about 219 in FY27 (DRHP p.115, DRHP p.42). The receivable turnover ratio fell from 4.63 to 1.94 times, which the auditors' note attributes to a longer credit period allowed to customers (DRHP p.126, DRHP p.266).

The gap was financed by suppliers, lenders and promoters. Trade payables were ₹19.9 crore at March 2026 (DRHP p.68), and the company paid ₹1.4 crore of interest in FY26 for paying creditors late (DRHP p.259). Short-term bank borrowings rose from ₹6.7 crore to ₹18.0 crore over two years, and interest-free promoter loans stood at ₹6.1 crore (DRHP p.250). Cash and bank balances were ₹0.70 crore at March 2026, of which ₹0.54 crore was cash on hand and nothing was in current accounts (DRHP p.257).

07The balance sheet

At March 31, 2026 total assets were ₹82.6 crore: trade receivables ₹41.5 crore, inventories ₹20.6 crore, property, plant and equipment ₹10.3 crore, capital work in progress ₹6.8 crore, long-term loans and advances ₹1.1 crore and cash and bank balances ₹0.70 crore (DRHP p.68). Against them: short-term borrowings ₹28.0 crore, long-term borrowings ₹9.0 crore, trade payables ₹19.9 crore, short-term provisions ₹5.0 crore and net worth ₹18.3 crore (DRHP p.68). Inventory at March 2026 was mostly finished goods, ₹14.5 crore of the ₹20.6 crore (DRHP p.256).

Borrowings at March 31, 2026 by type: secured cash credit and overdraft ₹18.0 crore, secured term loans ₹7.4 crore, vehicle loans ₹0.43 crore, a secured NBFC term loan ₹0.23 crore, unsecured term loans from banks ₹0.97 crore and from NBFCs ₹3.6 crore at 16.50% to 24%, inter-corporate loans ₹0.26 crore and interest-free loans from related parties ₹6.1 crore, repayable on demand (DRHP p.282, DRHP p.283).

The bank lines carry the personal guarantees of Dhiraj Gunecha, Divya Dhiraj Gunecha, Santosh Gunecha and Ummed Singh Gunecha and a mortgage of both plots (DRHP p.283). Debt service coverage was 0.71, 0.82 and 0.80 times, below 1.00 in each year (DRHP p.40). There are no contingent liabilities or capital commitments shown (DRHP p.260).

Source: DRHP p.68, DRHP p.105, DRHP p.284. None of the issue money is earmarked for repaying debt, so the arithmetic of borrowings after the issue cannot be done from the document, and the capitalisation statement leaves the post-issue column blank (DRHP p.284). The working capital plan still assumes ₹18.0 crore of borrowings for working capital in FY27 and ₹11.0 crore in FY28 (DRHP p.114).

08What the money is for

S.R.G. Narrow Fab IPO objects: what the money is for

Source: DRHP p.105. The size of the fresh issue in rupees depends on the price, which is not set, so the share of each object cannot be worked out (DRHP p.1).

Machinery, ₹10.0 crore: needle looms, crochet machines, rubber covering machines, warping, finishing and packing machines for the third and fourth floors of Unit 2, to add 2.8 crore metres a year and take capacity to 17.4 crore metres (DRHP p.109, DRHP p.50). The company expects to spend ₹3.0 crore in FY27 and ₹7.0 crore in FY28 (DRHP p.109).

Quotations from Rima Machines Private Limited, Taha Impex and Yash Enterprise total ₹10.5 crore including taxes, against the ₹10.0 crore object (DRHP p.111). No orders have been placed, the government approvals for the new floors have not yet been applied for, and the factory licence for Unit 2 is itself pending (DRHP p.112, DRHP p.44).

Working capital, ₹5.3 crore: ₹1.5 crore in FY27 and ₹3.8 crore in FY28, inside a projected working capital requirement of ₹43.9 crore and ₹55.4 crore in those years (DRHP p.114). The projection assumes receivable days of 219 in FY27 and 171 in FY28 (DRHP p.114).

The objects have not been appraised by any bank or financial institution (DRHP p.119). The document says on one page that no monitoring agency will be appointed because the issue is below ₹50.0 crore, and on another that one will be (DRHP p.55, DRHP p.119).

Into the business the whole fresh issue of up to 36,60,000 shares, at a price not yet set (DRHP p.1). To selling shareholders nothing; there is no offer for sale (DRHP p.1).

09Who is selling

S.R.G. Narrow Fab IPO offer for sale: who is selling

The cover states that the entire issue is a fresh issue of equity shares and that details of an offer for sale are not applicable (DRHP p.1). Promoters and the promoter group will not take part in the issue (DRHP p.103). Promoters did, however, transfer shares privately in the eighteen months before filing: the weighted average price of those transfers was ₹305.70 a share before the bonus (DRHP p.129). They are set out under section 09.

10Promoters

The promoters are Dhiraj Ummedsingh Gunecha and Ummed Singh Gunecha (DRHP p.229). Together they hold 35.19% before the issue; with the promoter group, Divya Dhiraj Gunecha and Santosh Gunecha, the holding is 78.33% (DRHP p.95). The document lists Dhiraj Ummedsingh Gunecha as the son of Ummed Singh Gunecha and the spouse of Divya Dhiraj Gunecha, and Santosh Gunecha as the spouse of Ummed Singh Gunecha (DRHP p.211, DRHP p.232).

Dhiraj Ummedsingh Gunecha, aged 38, is Chairman and Managing Director, holds a bachelor's degree in business administration and has over 15 years in the business; Ummed Singh Gunecha, aged 62, is Whole-Time Director, has been in elastics and narrow fabrics since 1999 and was earlier with Sun Narrow Fab Private Limited (DRHP p.209). Divya Dhiraj Gunecha, aged 36, an engineering graduate, is Executive Director (DRHP p.209, DRHP p.210). Santosh Gunecha resigned as a director on June 3, 2026, when three independent directors joined (DRHP p.291). Neither promoter holds any other directorship (DRHP p.229).

Pay: director remuneration was ₹0.18 crore each for Dhiraj Ummedsingh Gunecha and Ummed Singh Gunecha in FY24, ₹0.06 crore each in FY25 and ₹0.18 crore each in FY26, so ₹0.36 crore for the two promoters in FY24 and again in FY26 (DRHP p.73). The present terms are ₹0.18 crore a year each and ₹0.06 crore for Divya Dhiraj Gunecha (DRHP p.212).

Loans to the company: the promoters and family lend the company money interest free, repayable on demand: ₹3.7 crore from Dhiraj Ummedsingh Gunecha and ₹1.8 crore from Ummed Singh Gunecha at March 31, 2026 (DRHP p.250). Interest was paid on these loans in FY24 and FY25 but not in FY26 (DRHP p.72, DRHP p.73).

Other business: Dhiraj Ummedsingh Gunecha is proprietor of S.R.G. Elastics, which trades in elastics, a business similar to the company's; there is no non-compete arrangement (DRHP p.232, DRHP p.44). It bought ₹10.19 crore of the company's elastic in FY25 and sold it ₹4.4 crore of goods in FY26 (DRHP p.73, DRHP p.72).

Pledges and guarantees: no promoter shares are pledged (DRHP p.92). The promoters and family members have personally guaranteed the bank facilities (DRHP p.283).

Cases: there are no criminal, regulatory or material civil cases against the promoters (DRHP p.39). Two income-tax proceedings in the name of Dhiraj Ummedsingh Gunecha, for assessment years 2022-23 and 2017-18, are shown as pending with no amount, so 2 tax proceedings, no amount stated (DRHP p.288). Neither promoter has been barred from the capital markets or named a wilful defaulter (DRHP p.230).

Promoter economics: the average cost of the promoters' shares is stated as nil, because it is negative after the bonus and their sales (DRHP p.97). Dhiraj Ummedsingh Gunecha took 62,500 shares at ₹10 in March 2022, and each of the four family members took 1,87,500 shares in a ₹10 rights issue in March 2024 (DRHP p.89).

Between October and December 2025 the two promoters transferred 1,29,488 shares to outside investors at ₹300 and ₹312 a share, including 68,000 shares to Maxrets Innovations Private Limited at ₹300 (DRHP p.128, DRHP p.129).

In February and March 2026 Dhiraj Ummedsingh Gunecha bought shares back from Mezzanine Equity Private Limited at about ₹67.83 and from individual holders at about ₹368.6 to ₹371, and in May and June 2026 transferred 31,500 shares to Udhyaan Ventures at ₹142.85 and 14,493 shares to Manoj Kumar at ₹345 (DRHP p.98 to DRHP p.100). All of these prices are before the 15:2 bonus of June 20, 2026 (DRHP p.88).

11Who already owns it

S.R.G. Narrow Fab promoter holding before and after the IPO

Source: DRHP p.95, DRHP p.96. There are 98,51,628 shares of ₹10 before the issue and 31 shareholders (DRHP p.86, DRHP p.96). The document leaves the after-issue holding blank until the price is fixed (DRHP p.98). If all 36,60,000 new shares are issued, the total becomes 1,35,11,628 and the promoters' 35.19% becomes about 25.7%, so 35.2% → 25.7% (our arithmetic, DRHP p.95), and promoters with the promoter group go from 78.33% to about 57.1%, so 78.3% → 57.1% (our arithmetic, DRHP p.98).

Maxrets Innovations Private Limited is the largest holder outside the family at 5.87%, so 5.9% rounded before the issue (DRHP p.96). It bought 34,000 shares from each promoter at ₹300 in November and December 2025, about ₹35 a share after the bonus (DRHP p.129, our arithmetic). Udhyaan Ventures Private Limited holds 2.72%, so 2.7% rounded (DRHP p.96); it came in through the May 2026 transfer at ₹142.85 (DRHP p.99). The document gives neither entity any special rights (DRHP p.207).

Earlier outside money: Mezzanine Equity Private Limited took 45,714 shares at ₹56.65 in a rights issue in November 2024 and held 3.94% a year before filing; it no longer appears among the large holders after transferring shares to Dhiraj Ummedsingh Gunecha in 2026 (DRHP p.89, DRHP p.96, DRHP p.99). Forty-one allottees took 1,05,951 shares at ₹312.37 in December 2024, and five investors including Indo Thai Securities Limited took 7,350 shares at ₹531 in May 2025 (DRHP p.89, DRHP p.90). After the 15:2 bonus those prices equal about ₹36.7 and ₹62.5 a share (our arithmetic, DRHP p.88).

12What changed just before the IPO

• Revenue and profit: revenue went from ₹29.4 crore in FY24 to ₹60.0 crore in FY26 and profit after tax from ₹1.9 crore to ₹7.1 crore (DRHP p.69).
• Receivables went from 79 days in FY24 to 188 days in FY26 (DRHP p.114).
• Promoter pay was ₹0.36 crore in FY24 and ₹0.36 crore in FY26, with ₹0.12 crore in FY25 between them (DRHP p.73).
• Capacity rose from 9.6 crore to 14.6 crore metres a year, 3.8 crore of it in FY26 (DRHP p.188, DRHP p.274).
• Traded goods reappeared in FY26: ₹5.5 crore bought, ₹4.4 crore of it from S.R.G. Elastics (DRHP p.69, DRHP p.44).
• New money and holders: a rights issue to the family at ₹10 in March 2024, a rights allotment to Mezzanine Equity Private Limited at ₹56.65 in November 2024, a private placement at ₹312.37 in December 2024 and a private placement at ₹531 a share in May 2025, the last cash allotment (DRHP p.88).
• Promoter transfers: about ₹4.0 crore of shares moved from the promoters to outside holders between October and December 2025 at a weighted ₹305.70 a share (DRHP p.129).
• Bonus issue: 15:2, allotted June 20, 2026, 86,92,613 shares, the last allotment before the IPO, with no price paid (DRHP p.88).
• Share split: no split appears in the share capital history; every allotment is at a face value of ₹10 (DRHP p.88).
• Public company: converted with a fresh certificate dated January 31, 2025 (DRHP p.3).
• Auditor change: A Baid & Co. resigned on February 1, 2025 because it was not peer reviewed, and S K Kabra & Company was appointed on February 25, 2025, then for five years from September 30, 2025 (DRHP p.77).
• Board: Dhiraj Ummedsingh Gunecha became Chairman and Managing Director, Ummed Singh Gunecha Whole-Time Director, three independent directors joined and Santosh Gunecha left, all from June 3, 2026; a CFO and a company secretary joined from May 1, 2026 (DRHP p.291).
• Registered office moved from Plot No. 4227 to Plot No. 4105 on April 17, 2026 (DRHP p.203).
• Tax: demands for assessment years 2024-25 and 2022-23 were paid with interest in September 2026, while a ₹1.90 crore demand for assessment year 2025-26 remains (DRHP p.44, DRHP p.286).
• Factory licences: applied for both units on February 14, 2026, after years of operating without them (DRHP p.44).

13Capacity and expansion

Source: DRHP p.188, DRHP p.189, DRHP p.109. Total installed capacity was 9.6 crore, 10.8 crore and 14.6 crore metres in FY24, FY25 and FY26, and production 7.08 crore, 8.12 crore and 11.34 crore metres, so average utilisation of 74%, 75% and 78% (DRHP p.188, DRHP p.127). Capacity is counted on two twelve-hour shifts and is certified by an independent chartered engineer, Mokani Kruti N (DRHP p.48).

The issue-funded machinery adds 2.8 crore metres, taking capacity to 17.4 crore metres a year (DRHP p.50). The schedule spends ₹3.0 crore in FY27 and ₹7.0 crore in FY28 (DRHP p.109). Separately, capital work in progress of ₹6.8 crore sat on the March 2026 balance sheet, ₹6.6 crore of it added in FY26 (DRHP p.255); the document does not say what it is for. The document gives capacity, but not metres sold, so the step from capacity to revenue cannot be made here.

14Market size and industry structure

S.R.G. Narrow Fab industry: market size and growth

As claimed: the industry chapter is drawn from the "Report on Elastic Industry" by B2K Analytics Private Limited, dated September 24, 2026, which the company commissioned and paid for under an engagement letter of April 27, 2026 (DRHP p.27, DRHP p.31). The commissioned report does not size the Indian elastic market at all. The nearest figure it gives is global: in its table of the global fabrics market, narrow fabric mills and Schiffli machine embroidery together are USD 34.2 billion, 21.37% of the total, about ₹3,30,500 crore at the document's own March 2026 rate of ₹96.65 to the dollar (DRHP p.156, our arithmetic, DRHP p.27).

The part that is addressable: the company sells only in India, mostly in Gujarat and Delhi, so a global narrow fabrics figure is far wider than what it sells into (DRHP p.176, DRHP p.51). The chapter does not give an Indian narrow fabric or elastic tape market, by value or by metres.

What the company is today: FY26 revenue of ₹60.0 crore cannot be set against an Indian market figure because none is given (DRHP p.69). The commissioned report describes the company as "a growing player" in the segment (DRHP p.164).

Size over time: with no market series, the chapter tracks the company's inputs instead. India's synthetic yarn consumption rose from 24,29,037 tonnes in FY2015 to 52,35,052 tonnes in FY2026, while cotton yarn consumption was 25,70,791 tonnes in FY2026 (DRHP p.149, DRHP p.148). Synthetic rubber production grew 14.3% a year from FY2015 to FY2025 (DRHP p.150).

The global narrow fabrics figure grew 9.27% a year from 2019 to 2024, and the commissioned report projects 8.28% a year to 2029 (DRHP p.156). The report also cites a Technavio projection that global technical textiles grow from USD 202.3 billion in 2020 to USD 331.3 billion by 2030 (DRHP p.156). These are the report's claims, not figures from the company's accounts.

Segments: the report splits elastics three ways: by raw material (rubber and yarn), by process (woven, knitted, braided) and by end user (textiles, medical, furniture, luggage, shoes, industrial) (DRHP p.152, DRHP p.153, DRHP p.154). An elastic product is typically 60% to 85% textile yarn and 10% to 30% natural rubber or spandex (DRHP p.144). The company makes woven, knitted and crochet elastics, mostly textile based, and sells mainly to apparel makers and dealers (DRHP p.166).

What drives demand: the chapter names growth in apparel, innerwear and athleisure, sportswear and activewear, medical textiles, technical textiles, and rising incomes with a shift to branded garments (DRHP p.158). It notes that India is the sixth largest exporter of textiles and apparel, with a 4.1% share of world trade in 2024 (DRHP p.144), and that India has been a net exporter of woven elastics for the past four years (DRHP p.151).

Structure: the industry is described as largely MSME driven and highly fragmented, with competition from organised makers, regional players and low-cost Asian suppliers, and price competition intense in basic elastics (DRHP p.144, DRHP p.163, DRHP p.161). Barriers to entry are put as moderate: loom capital, technical skill and supplier relationships (DRHP p.161). Production clusters are in Gujarat, Tamil Nadu, Maharashtra, Delhi and Punjab, with Surat and Tirupur as the main demand centres (DRHP p.144).

Named competitors are Garware Fulflex India Pvt. Ltd., Sky Industries Ltd, Premco Global Ltd, Shingora Textiles Ltd, Kothari Narrow Fabrics, Jain Narrow Fabrics Pvt. Ltd. and Deepak Narrow Fabrics (DRHP p.164). No market shares are given for any of them.

Inputs and trade: yarn, rubber and spandex are about 60% to 65% of the company's input cost (DRHP p.51). India is a net importer of natural rubber: FY2026 production of 9,05,000 tonnes against consumption of 14,27,000 tonnes and imports of 4,59,081 tonnes (DRHP p.150). Synthetic yarn imports were 7,74,204 tonnes in FY2026 (DRHP p.149). Synthetic yarn prices follow crude oil and petrochemical feedstock, and rubber prices follow the monsoon (DRHP p.149, DRHP p.60).

Rules: the chapter on regulations lists the Factories Act, the Textiles Committee Act, the Textile (Development and Regulation) Act, pollution, labour, tax and trademark laws (DRHP p.192). The policies the report links to the industry are the production-linked incentive scheme for textiles, the National Technical Textiles Mission and the amended technology upgradation fund scheme (DRHP p.162). The company itself has applied for factory licences for both units and has not obtained consents to establish or operate, fire safety certificates or waste authorisations, which it believes do not apply to it (DRHP p.44, DRHP p.36).

What the chapter says can go wrong: raw material price swings in spandex, cotton, polyester and rubber; intense price competition among many small players; dependence on apparel and export cycles; substitution away from rubber elastics; and energy and compliance costs in dyeing and finishing (DRHP p.160). The report adds that elastic prices move in a narrow range even when input costs rise, which limits suppliers' bargaining power (DRHP p.163), and that buyers such as garment makers and export houses hold high bargaining power (DRHP p.161).

15Competitive position

S.R.G. Narrow Fab competitors

Source: DRHP p.123, DRHP p.127, DRHP p.68, converted from ₹ lakh. The document gives the peers' net worth, ₹50.8 crore for Sky Industries and ₹74.1 crore for Premco Global, but not their borrowings (DRHP p.127). Premco Global's FY26 PAT of ₹13.9 crore was above its EBITDA, which was negative at −₹2.5 crore, so its margin does not come from operations alone (DRHP p.127).

What the company puts forward: promoters with long experience, a range covering many end uses, quality checks at every stage, ISO 9001, 14001 and 45001 certificates from April 2026, and owned plants in the Surat textile cluster (DRHP p.167, DRHP p.180, DRHP p.191).

Against that: the products are, in the commissioned report's words, commonplace with little differentiation, the company has no long-term contracts on either side, all plants are in one district, its trademark applications are still under examination, and it is smaller than Sky Industries in revenue and net worth (DRHP p.163, DRHP p.34, DRHP p.32, DRHP p.54, DRHP p.127). The report names Garware Fulflex India Pvt.

Ltd. as among the most established makers of elastic and rubber thread (DRHP p.164).

16Peers the company named

Peers named in the offer document: Sky Industries Ltd and Premco Global Ltd (DRHP p.122).

The document picks them as listed companies in a similar line of business, while saying their businesses may not be comparable in their entirety (DRHP p.122). Sky Industries is about 1.4 times the company's FY26 revenue with a lower PAT margin and RoCE; its revenue grew 2.02% in FY26 (DRHP p.126, DRHP p.127).

Premco Global is a little smaller, ₹51.8 crore, its revenue fell 18.90% in FY26 and its EBITDA was negative while its PAT was positive (DRHP p.127). The document prints their P/E on March 31, 2026 closing prices as 9.85 and 9.38 (DRHP p.123). The company's FY26 EPS is ₹7.23 after the bonus; the peer table prints the pre-bonus ₹61.44 (DRHP p.121, DRHP p.123). With no price band, no P/E for the company can be stated.

17Risks, in plain words

S.R.G. Narrow Fab IPO risks

Financial: cash and receivables: receivables of ₹41.5 crore at March 2026, 188 days of revenue, with ₹16.0 crore more than six months past due (DRHP p.68, DRHP p.114, DRHP p.256) → profit is not arriving as cash, so growth is paid for with borrowing and supplier credit → operating cash flow was negative in all three years, −₹0.55 crore in FY26 (DRHP p.70).

Financial: debt: borrowings of ₹37.0 crore, 2.02 times equity, much of it repayable on demand, including NBFC loans at up to 24% (DRHP p.68, DRHP p.126, DRHP p.282) → finance cost was ₹4.4 crore in FY26, about 29% of EBITDA (our arithmetic, DRHP p.69) → debt service coverage was 0.80 times, below 1.00 in all three years (DRHP p.40).

Financial: lender consent: the list of lenders whose no objection certificates were pending at filing adds up to the full ₹37.0 crore of borrowings (DRHP p.46) → proceeding without them may be treated as a technical default, allowing lenders to recall loans (DRHP p.46).

Suppliers: the top ten suppliers were 80.92% of FY26 purchases, with no long-term contracts (DRHP p.34) → yarn and rubber are about 60% to 65% of input cost and the company says it may not pass increases on in time (DRHP p.51, DRHP p.60).

Promoters: related-party trade: S.R.G. Elastics, the promoter's own elastics trading proprietorship, was 21.67% of FY25 revenue and supplied 80.69% of FY26 traded goods, with no non-compete (DRHP p.43, DRHP p.44) → the promoter can direct business between the two.

Regulation and compliance: both units have operated without factory licences, applied for only in February 2026 (DRHP p.44) → the issue-funded expansion needs that licence and approvals not yet applied for (DRHP p.44, DRHP p.112) → provident fund payments were up to 156 days late in FY26 and income tax up to 685 days late (DRHP p.40, DRHP p.41).

Legal and tax: ₹4.1 crore of income tax unpaid at filing and a ₹1.90 crore demand pending (DRHP p.44) → the tax department may levy penalties or attach bank accounts until paid (DRHP p.45).

Business: one place: both units are in Sachin GIDC, Surat, and Gujarat and Delhi brought 90.58% of FY26 revenue (DRHP p.32, DRHP p.51) → any local disruption affects all production and most sales.

Issue-specific: promoters' average cost is nil after the bonus, and outside investors bought from promoters at ₹300 to ₹312 before the bonus, about ₹35 to ₹37 after it (DRHP p.97, DRHP p.129, our arithmetic) → no machinery orders are placed and quotations total ₹10.5 crore against the ₹10.0 crore object (DRHP p.112, DRHP p.111).

18Litigation and regulatory matters

Cases against S.R.G. Narrow Fab and its promoters

Criminal: none by or against the company, promoters, directors, key managerial personnel or senior management (DRHP p.285, DRHP p.287, DRHP p.290). Regulatory: no actions by statutory or regulatory authorities against the company or promoters, and no SEBI or stock exchange disciplinary action against the promoters (DRHP p.39). Civil: no material civil litigation (DRHP p.285). Tax: the summary counts two tax cases against the company totalling ₹2.2 crore (DRHP p.39).

A ₹1,000 income tax demand against Arvind Dudheria of senior management is outstanding (DRHP p.290). The company also records that it cannot trace its 2008-09 annual filings, that some filings lack payment records and that some were filed late; it cannot quantify any resulting penalty (DRHP p.37, DRHP p.38).

19Related-party transactions

Source: DRHP p.72, DRHP p.73. Salaries were ₹0.18 crore each to Dhiraj Ummedsingh Gunecha and Ummed Singh Gunecha in FY24 and FY26, ₹0.06 crore each in FY25, and ₹0.06 crore a year each to Divya Dhiraj Gunecha, Santosh Gunecha and Vinita Gunecha (DRHP p.73). Interest of ₹0.06 crore to Dhiraj Ummedsingh Gunecha and ₹0.33 crore to Ummed Singh Gunecha was paid in FY25; none in FY26 (DRHP p.72, DRHP p.73). Santosh Gunecha lent ₹0.74 crore and was repaid ₹0.31 crore in FY26 (DRHP p.72).

At March 31, 2026 the company owed ₹3.7 crore to Dhiraj Ummedsingh Gunecha, ₹1.8 crore to Ummed Singh Gunecha, ₹0.48 crore to Santosh Gunecha and ₹0.02 crore to Divya Dhiraj Gunecha, all interest free and repayable on demand (DRHP p.73, DRHP p.250).

What appeared or changed in the two years before filing: sales to S.R.G. Elastics jumped to ₹10.19 crore in FY25 and fell back to ₹1.04 crore in FY26, while purchases from it of ₹4.4 crore began in FY26 (DRHP p.73, DRHP p.72); interest on promoter loans stopped after FY25 (DRHP p.72). The company says the transactions were at arm's length (DRHP p.44).

20What the offer document does not say

Customers and suppliers are not named. Revenue by product, metres sold and price by product are not given, so the earnings equation cannot be filled in. The Indian elastic or narrow fabric market is not sized anywhere in the industry chapter. What the ₹6.8 crore of capital work in progress at March 2026 is for is not stated (DRHP p.255).

The issue size in rupees, the price band, the general corporate purposes amount and the issue expenses are blank (DRHP p.105). The after-issue shareholding is blank (DRHP p.98). The background of Maxrets Innovations Private Limited and Udhyaan Ventures Private Limited is not given in the parts read. The terms of trade with S.R.G. Elastics are not given beyond the arm's length statement.

Attrition is not measured, because the company relies on a casual workforce (DRHP p.179).

Some inconsistencies are recorded as document matters, not business ones: the document says no monitoring agency will be appointed on one page and that one will be on another (DRHP p.55, DRHP p.119); FY26 production growth is given as 46.81% on one page and 39.69% on another and FY25 growth as 16.96% and 14.71% (DRHP p.274, DRHP p.279, DRHP p.280);

March 2026 receivables are ₹41.49 crore in the balance sheet and ₹41.93 crore in the working capital narrative (DRHP p.68, DRHP p.115); the segment note places the company in Ahmedabad (DRHP p.267); the commissioned report's SWOT speaks of a single manufacturing facility while the company has two units (DRHP p.164, DRHP p.32); the report is titled "Elastic Industry" on one page and "Report on Elastic Industry" on others (DRHP p.27, DRHP p.31);

the machinery quotations total ₹10.5 crore against a ₹10.0 crore object (DRHP p.111); one page defines utilisation as installed capacity divided by production, the reverse of the other (DRHP p.273, DRHP p.128); and the KPI certificate refers in one sentence to a second firm, Rohit Kumar Jain & Co. (DRHP p.123).

21Five questions for management

1. How many metres were sold in FY24, FY25 and FY26, and at what average price for each product type, so that FY26 growth can be split into volume, price and traded goods?
2. Of the ₹41.5 crore of receivables at March 31, 2026, how much has been collected since, and how much of the ₹16.0 crore more than six months overdue is owed by dealers?
3. On what terms, prices and credit periods did the company trade with S.R.G. Elastics in each direction, and why did sales to it rise to ₹10.19 crore in FY25?
4. What is the ₹6.8 crore of capital work in progress at March 2026 for, and how does it relate to the ₹10.0 crore of machinery the issue will fund?
5. What utilisation does the new 2.8 crore metres of capacity need to cover its own depreciation and interest, and what will finance cost be once the working capital borrowings assumed for FY27 are drawn?

1Sources and cited facts

This study was read from 1 document the company filed. The 184 figures it cites are listed under the document each came from, with the page and the sentence as printed.