The SME initial public offering (IPO) of Ludhiana-headquartered knitted fabrics, circular knitting, and processed textile materials manufacturer Madhur Knit Crafts Limited witnessed steady demand acce…
The SME initial public offering (IPO) of Ludhiana-headquartered knitted fabrics, circular knitting, and processed textile materials manufacturer Madhur Knit Crafts Limited witnessed steady demand acceleration on its third day of public bidding across national bourses today, Wednesday, August 26, 2026.
Carrying an aggregate issue size of ₹53.27 crore set within an official price band parameter of ₹95.00 to ₹100.00 per share, the public offer marks a 100% fresh primary equity issuance to fund debt reduction, rooftop solar power capex, and expanding working capital requirements.
Building on the steady build-up across previous sessions, Day 3 saw retail individual investors step up bids to push their category into oversubscription. By the close of trading at 5:00 PM IST across the NSE SME platform, central exchange matching registries compiled valid electronic application tokens for 33,43,200 equity shares against a net public offer pool of 47,58,000 equity shares (excluding anchor allocations and the market maker reservation portion of 2,66,400 shares). This places the cumulative Day 3 subscription baseline at 0.70 times (70% coverage).
Retail individual investors crossed full baseline coverage at 1.10 times, while Qualified Institutional Buyers (QIBs) held their oversubscribed position at 1.01 times, and high-net-worth wealth accounts (HNIs) expanded commitments to 0.28x ahead of Thursday's final closing bell.
At the upper price band cap of ₹100 per share, the offer has mobilized an aggregate primary capital demand value of ₹33.43 crore clearing through central registries.
The multi-day public bidding window will officially close tomorrow, Thursday, August 27, 2026.
Here is an extended, plain-English human breakdown covering Day 3 subscription metrics, unlisted grey market trends, business operations across integrated knitting and fabric processing, financial performance, capital deployment plans, valuation parameters, and the upcoming allotment schedule.
1. Day 3 Subscription Data Breakdown
By 5:00 PM on Day 3, central exchange processing registries compiled total valid application orders worth ₹33.43 crore (calculated at the upper price band cap of ₹100 per share), covering 70% of the net public offer.
The table below summarizes the third day's performance across all investor categories:
+-----------------------------------------------------------------------------------+ | MADHUR KNIT CRAFTS LIMITED: DAY 3 SUBSCRIPTION DATA | +-------------------+-----------------+------------------+------------------+-------+ | Category | Shares Offered | Shares Bid For | Subscription (x) | Value | +-------------------+-----------------+------------------+------------------+-------+ | QIB (Institutions)| 2,02,800 | 2,04,000 | 1.01x | ₹2.04Cr | NII / HNI (Wealth)| 22,77,600 | 6,38,400 | 0.28x | ₹6.38Cr | Retail (RII) | 22,77,600 | 25,00,800 | 1.10x | ₹25.01Cr | Market Maker | 2,66,400 | — | — | — | +-------------------+-----------------+------------------+------------------+-------+ | Total Net Offer | 47,58,000 | 33,43,200 | 0.70x | ₹33.43Cr +-------------------+-----------------+------------------+------------------+-------+
Analyzing the Category Inflows:
- Retail Individual Investors (RII - 1.10x): Everyday retail accounts doubled their application volume from Day 2 (12.58 lakh shares) to 25,00,800 shares (1,042 application lots) worth ₹25.01 crore against 22.78 lakh shares reserved for them, taking retail coverage into full oversubscription at 1.10 times. Under the issue rules for this SME offer, retail applicants face a minimum lot requirement of 2 lots (2,400 shares), requiring an upfront layout of ₹2,40,000 at ₹100 per share.
- Qualified Institutional Buyers (QIB - 1.01x): Institutional desks maintained full coverage with bids for 2,04,000 shares worth ₹2.04 crore against 2.03 lakh shares offered in their net allocation slice, holding at 1.01 times coverage.
- Non-Institutional Investors (NII / HNI - 0.28x): High-net-worth wealth accounts and family offices registered orders for 6,38,400 shares worth ₹6.38 crore against 22.78 lakh shares offered, reaching 28% coverage. Both small-HNI (minimum 3 lots / 3,600 shares = ₹3,60,000) and big-HNI brackets saw steady application additions.
- Market Maker Reserved Block: A dedicated block of 2,66,400 shares (~₹2.66 crore) is allocated to the designated market maker to provide secondary market quote liquidity support post-listing.
2. Unlisted Grey Market Premium (GMP) & Market Sentiment
In the unofficial grey market, sentiment surrounding Madhur Knit Crafts remains steady:
- Fixed Upper Price Cap Anchor: ₹100.00 per share
- Current Grey Market Premium (GMP): Tracking around +₹14.00 to +₹16.00 per share (~14.0% to 16.0% over issue price)
- Estimated Listing Price Range: Expected debut counter level of ₹114.00 to ₹116.00 per share
- Projected Listing Gain Margin: Indicating an immediate estimated listing upside of ~14.00% to 16.00%
- Retail Minimum Application Lot Size: 2 Lots / 2,400 Shares (Minimum Investment: ₹2,40,000)
What Is Driving Grey Market Optimism?
- Ludhiana Textile Cluster Moats: Headquartered in India's premier textile manufacturing hub, the company operates integrated circular knitting and fabric processing infrastructure with strong local supply chain access.
- Strong Earnings Growth: Operating income reached ₹194.79 crore with PAT surging to ₹12.35 crore for the period ended February 2026, delivering a healthy Return on Net Worth (RoNW) of 28.33%.
(Note: Grey market premiums represent informal, off-exchange quotes traded among dealers. They fluctuate based on daily market mood and should not be treated as a guaranteed listing price.)
3. Business Overview: What Does Madhur Knit Crafts Do?
Incorporated in 1997 and headquartered in Ludhiana, Punjab, Madhur Knit Crafts Limited is an integrated manufacturer, processor, and supplier of knitted fabrics, blankets, winter textiles, and specialized garments.
The company's operations encompass circular knitting, fabric dyeing, bleaching, finishing, and processing of high-grade cotton, polyester, blended knit fabrics, and fleece used by readymade garment manufacturers, exporters, and domestic apparel brands.
+-----------------------------------------------------------------------------------+ | MADHUR KNIT CRAFTS BUSINESS AT A GLANCE | +-----------------------------------+-----------------------------------------------+ | Core Focus Area | Knitted Fabrics, Blankets & Textile Processing| +-----------------------------------+-----------------------------------------------+ | Product Portfolio | Cotton Knits, Polyester Knits, Blended Fabrics| | | Fleece, Blankets, Home Furnishing & Winterwear| +-----------------------------------+-----------------------------------------------+ | Primary Manufacturing Hub | Integrated Knitting Units in Ludhiana, Punjab | +-----------------------------------+-----------------------------------------------+ | End-User Applications | Casual Wear, Winter Wear, Sportswear, Hosiery | +-----------------------------------+-----------------------------------------------+ | Core Client Ecosystem | Apparel Exporters, Brand Manufacturers, MBOs | +-----------------------------------+-----------------------------------------------+ | Promoters & Leadership | Arun Gupta, Piyush Gupta, Chirag Gupta | +-----------------------------------+-----------------------------------------------+
Core Competitive Moats:
1. Strategic Location Advantage in Ludhiana
Operating directly out of Ludhiana—North India's largest hub for knitwear and hosiery—provides direct access to high-grade spinning mills, skilled textile labor, and an extensive local network of garment manufacturers.
2. Vertically Integrated Processing Infrastructure
The company manages multiple production stages from yarn-to-cloth—including circular knitting, dyeing, printing, and finishing—ensuring quality control and fast turnaround times for customized orders.
3. Diversified Product Catalog Across Seasons
By balancing summer casual-wear single jersey knits with heavier winter fleece, blankets, and rib fabrics, the company maintains steady factory machine utilization throughout the year.
4. Detailed Financial Performance (FY24 to FY26)
An audit of the company's restated financial statements shows steady top-line expansion alongside substantial operational and net profit growth over recent fiscal periods.
+-----------------------------------------------------------------------------------+ | MADHUR KNIT CRAFTS: FINANCIAL PERFORMANCE OVERVIEW | +-------------------------------+-------------------+-------------------+-----------+ | Financial Metric (₹ in Cr) | FY24 | FY25 | Feb 2026 | +-------------------------------+-------------------+-------------------+-----------+ | Revenue / Total Income | 108.41 | 171.76 | 194.79 | | Operating EBITDA | 8.04 | 23.28 | 25.67 | | EBITDA Margin (%) | 7.42% | 13.56% | 13.19% | | Net Profit After Tax (PAT) | 1.70 | 11.03 | 12.35 | | PAT Margin (%) | 1.57% | 6.43% | 6.34% | | Net Worth | 16.24 | 29.49 | 43.61 | | Total Borrowings / Debt | 57.79 | 67.20 | 73.54 | | Return on Net Worth (RoNW %) | 10.49% | 37.42% | 28.33% | | Return on Capital Employed % | 13.09% | 33.49% | 31.11% | +-------------------------------+-------------------+-------------------+-----------+
(Source: Restated Financial Statements in Prospectus & KPI Reports)
Key Financial Observations:
- Robust Top-Line Scaling: Total income expanded from ₹108.41 crore in FY24 to ₹171.76 crore in FY25, before reaching ₹194.79 crore for the period ended February 2026, driven by higher capacity utilization and expanding order books from garment exporters.
- Profit Growth: Net profit after tax (PAT) grew sharply from ₹1.70 crore in FY24 to ₹11.03 crore in FY25, and reached ₹12.35 crore in Feb 2026. EBITDA margins expanded to 13.19% due to better production efficiencies.
- High Return Ratios: The company delivered a Return on Net Worth (RoNW) of 28.33% and a Return on Capital Employed (ROCE) of 31.11% in FY26.
5. Structure of the Offer & Objects of the Issue
The ₹53.27 crore public offer is structured entirely as a 100% fresh primary capital issuance:
+-----------------------------------------------------------------------------------+ | IPO CAPITAL STRUCTURE BREAKDOWN | +-----------------------------------+-----------------------------------------------+ | Total Issue Size | ₹53.27 Crore (53,26,800 Equity Shares) | +-----------------------------------+-----------------------------------------------+ | Fresh Issue Component | ₹53.27 Crore (100% Fresh Capital Issue) | +-----------------------------------+-----------------------------------------------+ | Offer for Sale (OFS) Component | ₹0.00 (No Selling Shareholders) | +-----------------------------------+-----------------------------------------------+ | Price Band | ₹95.00 to ₹100.00 per share | +-----------------------------------+-----------------------------------------------+ | Face Value | ₹10 per share | +-----------------------------------+-----------------------------------------------+ | Market Maker Reserved Block | 2,66,400 Shares (₹2.66 Crore Value) | +-----------------------------------+-----------------------------------------------+ | Net Offer to Public | 50,60,400 Shares (₹50.60 Crore Value) | +-----------------------------------+-----------------------------------------------+ | Lead Manager (BRLM) | SKI Capital Services Limited | +-----------------------------------+-----------------------------------------------+ | Registrar to the Issue | Skyline Financial Services Private Limited | +-----------------------------------+-----------------------------------------------+
How Will Fresh Primary Capital Be Deployed?
Because there is no Offer for Sale (OFS), 100% of the proceeds move directly onto the company balance sheet:
- Repayment / Prepayment of Debt (₹20.85 Crore / 39.1%): Earmarked to pay down existing bank borrowings to lower annual interest costs.
- Funding Working Capital Requirements (₹15.92 Crore / 29.9%): Procuring bulk cotton and synthetic yarn stock and supporting debtor credit terms.
- Solar Power CAPEX (₹3.68 Crore / 6.9%): Installing a 1,500 KW rooftop solar power plant at its production facilities to lower long-term grid electricity expenses.
- General Corporate Purposes & Issue Expenses (₹12.82 Crore / 24.1%): Supporting administrative expenses and issue processing fees.
6. Valuation Analysis & Peer Group Comparison
At the upper price band cap of ₹100 per share, Madhur Knit Crafts is priced at a trailing Price-to-Earnings (P/E) multiple of 12.15x based on pre-issue basic EPS (and 13.91x based on post-issue diluted equity capital of 1,87,36,925 shares), establishing a post-issue corporate market capitalization of approximately ₹187.37 crore.
Let's compare this with listed textile, knitting, and fabric peers in India:
+-----------------------------------------------------------------------------------+ | PEER GROUP VALUATION COMPARISON | +-----------------------------------+--------------------+--------------------------+ | Company Name | Trailing P/E (x) | Primary Focus / Model | +-----------------------------------+--------------------+--------------------------+ | Madhur Knit Crafts (At ₹100) | ~13.91x (Post-IPO) | Knitted Fabrics & Yarns | | Fascinate Textiles Ltd | ~14.25x | Readymade & Kidswear | | Nitin Spinners Ltd | ~16.80x | Yarn & Knitted Fabric | | Kewal Kiran Clothing Ltd | ~21.70x | Branded Menswear | | Iris Clothings Ltd | ~54.90x | Children's Wear Brand | +-----------------------------------+--------------------+--------------------------+
Valuation Summary:
At ~13.9x post-issue trailing earnings, Madhur Knit Crafts enters the market at a reasonable entry valuation compared to listed textile and apparel peers (14x–55x P/E).
With total income touching ₹194.79 crore, a 28.33% RoNW, ₹12.35 crore PAT, and ₹20.85 crore in fresh capital funding balance sheet deleveraging, the ~13.9x multiple leaves a fair fundamental margin of safety for incoming public investors.
7. Core Strengths vs. Key Business Risks
Investors evaluating this SME textile issue should consider the following operational factors:
Key Strengths:
- 100% Fresh Issue Structure: No promoter cash-out; ₹20.85 crore goes directly into debt reduction.
- Disciplined Valuation (13.91x Post-IPO P/E): Priced favorably relative to broader textile and apparel peers.
- Retail Category Fully Covered (1.10x): Retail individual investors have crossed 100% subscription on Day 3.
- Solid Capital Efficiency: Delivering a 28.33% RoNW and 31.11% ROCE.
Key Risk Factors:
- High Working Capital & Raw Material Volatility: Yarn and cotton price fluctuations can impact operating margins.
- Customer Concentration: The company relies on key garment manufacturers and domestic fabric traders.
- High Retail Application Threshold: The minimum investment required for retail applicants is ₹2,40,000 (2 lots / 2,400 shares), which restricts participation from smaller retail accounts.
8. Application Matrix & Final Timeline
With the bidding window closing tomorrow, here is the upcoming schedule and application size breakdown:
- Public Bidding Window Closes: Thursday, August 27, 2026 (5:00 PM IST)
- Basis of Allotment Finalization: Friday, August 28, 2026
- Refund Initiations & Unblocking of Bank Funds: Monday, August 31, 2026
- Credit of Equity Shares to Demat Accounts: Monday, August 31, 2026
- Official Stock Exchange Listing (NSE SME): Tuesday, September 1, 2026
- Designated Lead Manager: SKI Capital Services Limited
- Designated Registrar: Skyline Financial Services Private Limited
Application Size Matrix:
- Retail Minimum & Maximum: 2 Lots (2,400 Shares) — ₹2,40,000
- Small HNI (sNII) Minimum: 3 Lots (3,600 Shares) — ₹3,60,000
- Big HNI (bNII) Minimum: 9 Lots (10,800 Shares) — ₹10,80,000
How to Check Your Allotment Status:
When allotment details go live on Friday, August 28, 2026, applicants can check their status by entering their PAN card number or Application ID on the Skyline Financial Services Portal or directly on the official NSE website under the SME allotment section.
Conclusion: What Should You Watch for on the Final Day?
Madhur Knit Crafts presents an integrated textile fabric manufacturing story backed by its presence in Ludhiana, ₹194+ crore in revenue scale, 28.33% RoNW returns, debt reduction catalysts, and an attractive 13.91x post-issue trailing P/E valuation.
With Day 3 closing at 0.70x overall—anchored by 1.10x retail coverage and 1.01x QIB subscription—the issue is positioned for final-day momentum.
Over the final trading session on Thursday, watch how high-net-worth wealth accounts and late retail applicants finalize their orders ahead of the 5:00 PM closing deadline.
Post Excerpt
A complete Day 3 analysis of the ₹53.27 crore Madhur Knit Crafts SME IPO. Bids reached 0.70x on Day 3 with retail crossing full coverage at 1.10x and QIBs holding at 1.01x as total primary demand touched ₹33.43 crore. Read our full review of company financials (₹194+ Cr revenue, ₹12.35 Cr PAT), Ludhiana knitted fabric processing moats, grey market trends (+₹14–₹16), ₹20.85 crore debt repayment plans, and valuation (13.91x post-issue P/E) ahead of tomorrow's close.
