Indian saree maker Shree Balaji launches Rs 18.9 crore IPO

Shree Balaji (Mala) Textiles opened its initial public offering on Tuesday, aiming to raise Rs 18.90 crore through a fresh issue of 27 lakh shares. The Indian saree manufacturer has set a price band of Rs 66 to Rs 70 per share, with the subscription window closing on July 24.

The unlisted shares are already trading at a significant premium in the grey market, indicating strong retail speculation ahead of the listing. Market sources report a grey market premium of Rs 15 per share, representing a 21.43% premium over the upper price band. This points to an estimated listing price of around Rs 85 per share.

The company plans to allocate Rs 16.50 crore of the proceeds directly to working capital requirements, with the remainder earmarked for general corporate purposes. This heavy reliance on IPO funds for day-to-day operations highlights the tight cash conversion cycle inherent in its wholesale distribution model.

While top-line growth is steady, profit margins remain narrow. Total income rose 9.8% year-on-year to Rs 212.40 crore in fiscal year 2026, up from Rs 193.44 crore in FY25. Profit after tax grew 18.2% to Rs 5.85 crore, from Rs 4.95 crore previously. The IPO raise of Rs 18.90 crore therefore represents a substantial addition to its equity base relative to its annual earnings.

Headquartered in West Bengal with a manufacturing facility in Gujarat, Shree Balaji sells through an extensive B2B network under the "Mala Saree" brand. As of March 31, 2026, this network included over 3,000 retailers, 69 wholesalers, 13 dealers and more than 105 brokers. The company targets a broad consumer base with an average selling price of approximately Rs 270 per saree, spanning everyday and occasion wear.

Access to the offering is restricted to well-capitalised participants due to the BSE SME platform's lot structure. A minimum investment of Rs 2.80 lakh is required, covering a mandatory minimum application of 4,000 shares at the upper price band. Kfin Technologies is serving as the registrar, while Mansi Share & Stock Broking acts as the market maker. The basis of allotment will be finalised on July 27, with trading expected to commence on July 29.