Madhur Knit Crafts Files DRHP for NSE Emerge Listing; Plans Fresh Issue of 56 Lakh Shares to Raise Funds for Expansion and Debt Repayment

Ludhiana, October 27, 2025: Madhur Knit Crafts Limited, based in Ludhiana and engaged in the manufacture of knitted fabrics and garments, has filed its Draft Red Herring Prospectus to launch an Initial Public Offering (IPO) on the NSE Emerge platform.

The proposed book-built issue comprises a fresh issue of up to 56,00,000 equity shares, each with a face value of ₹10. As there is no offer for sale (OFS) component, the entire proceeds from the issue will be directed to the company to support its growth initiatives and planned objectives.

Madhur Knit Crafts Limited is a vertically integrated textile manufacturer with a strong focus on product innovation, quality control, and sustainability. With over two decades of operational experience, the company serves reputed domestic and global clients in the knitted fabric segment and continues to invest in modernisation and renewable energy initiatives.

Madhur Knit Crafts IPO Overview

Madhur Knit Crafts Limited is set to launch its Initial Public Offering (IPO) through the book-built issue route, offering up to 56 lakh equity shares with a face value of ₹10 each. The issue comprises a 100% fresh equity issue, ensuring that the entire proceeds from the IPO will go directly to the company to fund its business expansion and growth initiatives.

The company’s shares would be listed and traded on the NSE Emerge platform, with SKI Capital Services Ltd. being the Book Running Lead Manager and Skyline Financial Services Pvt. Ltd. being the Registrar to the Issue.

The bidding for anchor investors will take place one day before the issue opens, with up to 5% of the total issue size reserved for the market maker to ensure liquidity in post-listing trading. As per the allocation framework, not more than 50% of the net issue will be reserved for Qualified Institutional Buyers (QIBs), of which up to 60% may be allocated to anchor investors. Meanwhile, at least 15% of the issue will be earmarked for Non-Institutional Investors (NIIs), and 35% will be reserved for Retail Individual Investors (RIIs).

Madhur Knit Crafts Use of Proceeds from the IPO

As stated in the draft Red Herring Prospectus (DRHP), Madhur Knit Crafts Limited intends to use the proceeds from the IPO to improve its overall financial position and to fund future growth plans.

The majority of the proceeds, approximately ₹1,740 lakh, will be allocated to repay or prepay existing borrowings. Another ₹1,410 lakh is allocated for working capital requirements to support daily operations and improved cash flow management.

Furthermore, the company intends to set up a rooftop solar power plant with an investment of ₹400 lakh. Any remaining issue proceeds, not more than 15% of the issue proceeds or ₹10 crore, whichever is lower, will be used to meet general corporate needs.

Overall, the planned fund utilisation aligns with Madhur Knit Crafts’ strategy to strengthen its balance sheet, enhance operational efficiency, and adopt cleaner, cost-effective energy solutions.

Madhur Knit Crafts Financial Performance Snapshot

Madhur Knit Crafts Limited has shown a strong and consistent growth trajectory over the past three financial years, supported by higher revenue generation, improved margins, and operational efficiency.

The company’s total income rose steadily from ₹8,955.75 lakh in FY23 to ₹10,840.57 lakh in FY24, and further surged to ₹17,176.06 lakh in FY25. For the first quarter of FY26, the company reported an income of ₹6,523.47 lakh, reflecting continued business momentum.

Profitability has also seen a significant boost, with Profit After Tax (PAT) climbing from ₹90.31 lakh in FY23 to ₹170.43 lakh in FY24, and reaching an impressive ₹1,103.25 lakh in FY25. The company’s Earnings Per Share (EPS) jumped sharply from ₹0.73 in FY23 to ₹8.35 in FY25, indicating a more than tenfold increase in shareholder earnings.

Additionally, Return on Net Worth (RONW) improved from 7.43% in FY23 to 37.42% in FY25, showcasing efficient capital utilization and strong profitability. The Net Asset Value (NAV) per share also strengthened from ₹13.12 in FY23 to ₹22.31 in FY25, and further to ₹24.24 as of June 30, 2025.

Madhur Knit Crafts Share Capital

Madhur Knit Crafts Limited has an authorised share capital of ₹2,400 lakh, divided into 2.4 crore equity shares with a face value of ₹10 each. Currently (Pre-IPO), the company’s issued, subscribed, and paid-up capital stands at ₹1,341.01 lakh, representing 1,34,10,125 equity shares. Through the upcoming fresh issue of 56,00,000 equity shares, the company aims to raise additional capital to fund its growth initiatives.

Following the public issue, the company’s post-issue paid-up share capital is expected to increase to approximately 1,90,10,125 equity shares, subject to final allotment and confirmation.

The upcoming IPO is positioned to accelerate Madhur Knit’s plans for capacity expansion, sustainable operations, and debt reduction, thereby enhancing its long-term competitiveness in India’s fast-evolving textile and apparel ecosystem.

REF: https://nsearchives.nseindia.com/emerge/corporates/content/Registration_25102025183153_DRHP-MKCL-251025.pdf

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