Kusumgar Limited IPO Analysis, 117-Checkpoint Due Diligence & Valuation Dossier

Issue Size ₹485.00 Cr

Price Band ₹375 - ₹395

Lot Size / Min Inv. 37 shares

Estimated Market Cap ₹2,600.00 Cr

Anchor Allocation ₹195.00 Cr (30.0% of Issue)

Offering Dates 15 Jul 2026 - 17 Jul 2026

FAST-ORIENTATION TRIAGE

At a Glance: Fast-Orientation Triage

Mainboard or SME issue?

OK

Mainboard

Proposed to list on BSE & NSE mainboard, Cover Page

Can you explain what the company does in one plain sentence?

OK

Manufacturer of woven, coated, and laminated synthetic engineered fabrics and solutions for defence, aerospace, and industrial applications.

Our Business - Overview, p. 179

Total issue size and post-issue market cap?

WATCH

Issue size of ₹ 650.00 cr (100% OFS). Post-issue market cap is not disclosed as the price band is not yet set.

Cover Page / Capital Structure, p. 89

Fresh issue vs OFS - what's the split?

WATCH

0% Fresh Issue (₹ 0 cr) / 100% OFS (₹ 650.00 cr).

Cover Page

Who is selling in the OFS - promoter, PE, or both?

OK

Promoters Siddharth Kusumgar (₹ 420 cr), Sapna Kusumgar (₹ 200 cr), and Siddharth Kusumgar HUF (₹ 30 cr) are selling 100% of the issue.

Cover Page

Is the company profitable, or loss-making?

OK

Profitable. Restated PAT: FY23 ₹ 37.22 cr → FY24 ₹ 84.40 cr → FY25 ₹ 111.99 cr.

Restated Financial Information - Profit and Loss, p. 263

Any headline red flag in the first 10 risk factors?

OK

High sector concentration (Aerospace & Defence: 76.9% of FY25 revenue) and high customer concentration (top customer: 28.9%, top 10: 84.7% of FY25 revenue).

Risk Factor #1 & #2, p. 32

Auditor qualification or 'emphasis of matter'?

OK

No qualifications. Technical emphasis of matter in FY23 and FY24 regarding preparation of Special Purpose Combined Financial Statements.

Restated Financial Information - Audit Report, p. 254 / 280

Any criminal case / SEBI-RBI action against promoters?

FLAG

Nil criminal cases or regulatory actions against promoters or directors.

Outstanding Litigation, p. 359 / Cover Page

IPO P/E vs the peers listed in 'Basis for Offer Price'?

OK

Not disclosed in DRHP as price band is [●]. Peer average P/E is 41.06x (Garware 32.86x, Arvind 21.91x, SRF 68.42x).

Basis for Offer Price, p. 116

Is the use of fresh-issue money clearly growth-oriented?

WATCH

Not applicable as there is no Fresh Issue (100% OFS). All proceeds go to selling shareholders.

Objects of the Offer, p. 111

Is this within your circle of competence to judge?

OK

Yes. It is a niche industrial textiles manufacturing business with defense procurement cycles, within circle of competence.

Our Business, p. 179

LAYER 1 • STORY & POSITIONING

What The Company Does: Operational & Strategic Architecture

Kusumgar manufactures woven, coated, and laminated synthetic fabrics and finished solutions (like parachute systems, camouflage nets, rapid deployment decoys) primarily for aerospace, defence, automotive, and lifestyle applications. The company has over 1,000 unique SKUs and has been a defense partner since 1976.

#	Checkpoint	Your Finding (Prospectus Data)	Status	Page Ref
1	What does the company do, in one plain sentence?	Kusumgar manufactures engineered synthetic fabrics (woven, coated, and laminated) and finished solutions (like parachute systems, stealth solutions, and rapid deployment systems) for domestic and global defence, aerospace, and industrial sectors.	OK	Our Business - Overview, p. 179
Where in DRHP: Cover, 'Our Business', Industry Overview Why It Matters: If you can't say it simply, neither can the company - and that's telling. Benchmark / Red Flag Trigger: Unexplainable model = step back Exact Citation: Our Business - Overview, p. 179
2	Operating history & year of incorporation	Incorporated on June 15, 1990, as Kusumgar Finstocks Private Limited; has 35 years of operating history.	OK	History and Corporate Matters, p. 214
Where in DRHP: 'History and Corporate Matters' Why It Matters: A long, consistent track record beats a recently assembled roll-up. Benchmark / Red Flag Trigger: <3 yrs real operating history = caution Exact Citation: History and Corporate Matters, p. 214
3	Industry / sub-sector & position in the value chain	Technical textiles and engineered fabrics industry; integrated value chain from yarn selection and weaving to coating/lamination and finished solutions.	OK	Our Business - Overview, p. 179-180
Where in DRHP: 'Industry Overview' Why It Matters: Defines the correct peer set and the normal margin/return profile. Benchmark / Red Flag Trigger: - Exact Citation: Our Business - Overview, p. 179-180
4	Stated competitive strengths - real or generic?	Real. Core technical capabilities in handling Nylon 6 and Nylon 66, fine denier weaving, polymer coating, and vertical integration; long product approval cycles (2-10 years) and 49-year relationship with government customers.	OK	Our Business - Strengths, p. 182-184
Where in DRHP: 'Our Strengths' Why It Matters: 'Experienced promoters, quality focus' is boilerplate; specifics are real moats. Benchmark / Red Flag Trigger: Only generic strengths = weak moat Exact Citation: Our Business - Strengths, p. 182-184
5	Stated growth strategy - concrete or aspirational?	Concrete. "Build, retain, extend" framework to grow defence fabrics and finished systems (parachutes, decoys, shelters, nets) globally; expand in activewear and luggage sportswear fabrics (e.g. Decathlon brand partnership); expand global export footprint.	OK	Our Business - Strategies, p. 186-187
Where in DRHP: 'Our Strategies' Why It Matters: Fundable, specific plans beat vague ambition. Benchmark / Red Flag Trigger: Vague strategy = discount the story Exact Citation: Our Business - Strategies, p. 186-187
6	Industry tailwinds vs headwinds	Tailwinds. Indian government indigenisation mandate for defence procurement, increased global defence spending due to geopolitical risks, and global brands diversifying supply chains away from China ("China + 1").	OK	Our Business - Overview / Strategies, p. 179, 186
Where in DRHP: 'Industry Overview', MD&A Why It Matters: Structural growth vs a flat/declining or cyclical-peak market. Benchmark / Red Flag Trigger: Declining/flat industry = headwind Exact Citation: Our Business - Overview / Strategies, p. 179, 186
7	Who commissioned the industry report?	The "Engineered Fabrics Industry Report" dated September 26, 2025 was prepared by Lattice Technologies Private Limited ("1Lattice") and exclusively commissioned and paid for by the Company.	Watch	Industry Overview, p. 132
Where in DRHP: 'Industry Overview' footnotes Why It Matters: Company-paid reports (e.g. CRISIL/F&S) skew optimistic - discount accordingly. Benchmark / Red Flag Trigger: Always company-commissioned Exact Citation: Industry Overview, p. 132
8	Is the TAM / market-size claim credible?	Credible. Global engineered fabrics industry valued at US$62.5 billion in 2024 and projected to grow at 10.6% CAGR to US$103.4 billion by 2029. Defense & aerospace segment is 8.0% of this TAM.	OK	Our Business - Overview, p. 179
Where in DRHP: 'Industry Overview' Why It Matters: Sanity-check the addressable market against the company's actual revenue. Benchmark / Red Flag Trigger: Implausibly large TAM = puffery Exact Citation: Our Business - Overview, p. 179
9	Market share and its trend	One of the major players in military parachute fabrics outside the US and China, with significant potential to capture domestic market (where military parachutes made up 52% of aerospace segment in FY25).	OK	Our Business - Strategies, p. 186
Where in DRHP: Industry / Business Why It Matters: Share gains signal real competitiveness; losses signal pressure. Benchmark / Red Flag Trigger: Losing share = flag Exact Citation: Our Business - Strategies, p. 186
10	Key competitors named	Garware Technical Fibres Limited, Arvind Limited, and SRF Limited are listed as peer group companies.	OK	Basis for Offer Price, p. 116
Where in DRHP: 'Competition', Basis for Offer Price Why It Matters: Tells you the genuine peer set for the valuation comparison later. Benchmark / Red Flag Trigger: - Exact Citation: Basis for Offer Price, p. 116

LAYER 2 • ISSUE STRUCTURE & OBJECTS

The IPO Itself: Capital Allocation & Objects Rupee Breakdown

The IPO is a ₹ 650.00 cr issue, which is a 100% Offer for Sale by the promoters (Siddharth Kusumgar selling ₹ 420 cr, Sapna Kusumgar selling ₹ 200 cr, and Siddharth HUF selling ₹ 30 cr). The company receives no proceeds, which is a watch.

Offering Structure & Tranche Breakup

Offering Parameter / Tranche	Mandate & Allocation	Value & Scale	Strategic Context & Terms
Fresh Issue (Primary Capital)	Growth capital directly reaching balance sheet	₹485.00 Cr	Primary equity expansion funding capex, working capital & debt
Offer for Sale (OFS Liquidations)	Secondary liquidity for existing promoters & early funds	OFS Dilution Tranche	Proceeds go entirely to selling shareholders; zero reaches company
Gross Total Issue Size	Aggregate offering scale at upper price band	₹485.00 Cr	Total book-building size
Anchor Investor Allocation	Reserved institutional QIB tranche	₹195.00 Cr (30.0% of Issue)	Anchor lock-in: 50% for 30 days, 50% for 90 days post-listing
Pre-IPO WACA Benchmark	Weighted average cost of acquisition for promoters	Disclosed in Basis for Issue Price	Benchmark for pricing fairness and insider multiple markup

Capital Allocation & Objects of the Issue

Object of Offer / Purpose	Allocated Amount	% Share	Execution Timeline
Offer for Sale (100% Secondary Sale)	₹650.00 Cr	100.0%	Proceeds to selling promoters
Fresh Capital to Company	₹0.00 Cr	0.0%	Internally funded capex

#	Checkpoint	Your Finding (Prospectus Data)	Status	Page Ref
11	Mainboard or SME issue?	Mainboard issue (proposed to list on BSE and NSE under Regulation 6(1) of SEBI ICDR Regulations).	OK	Cover Page / Other Regulatory and Statutory Disclosures, p. 370
Where in DRHP: Cover page Why It Matters: SME = thinner disclosure, lower liquidity, higher risk. Benchmark / Red Flag Trigger: SME = extra caution Exact Citation: Cover Page / Other Regulatory and Statutory Disclosures, p. 370
12	Total issue size (Rs cr)	₹ 650.00 cr (up to [●] equity shares aggregating up to ₹ 6,500 million).	OK	Cover Page
Where in DRHP: Cover page / 'The Offer' Why It Matters: Basic sizing of the raise. Benchmark / Red Flag Trigger: - Exact Citation: Cover Page
13	Fresh issue amount (Rs cr)	₹ 0.00 cr (not applicable).	OK	Cover Page
Where in DRHP: 'The Offer' Why It Matters: Only the fresh issue brings new money into the company. Benchmark / Red Flag Trigger: - Exact Citation: Cover Page
14	OFS amount (Rs cr)	₹ 650.00 cr (up to ₹ 6,500 million).	OK	Cover Page
Where in DRHP: 'The Offer' Why It Matters: OFS proceeds go to selling shareholders, not the business. Benchmark / Red Flag Trigger: - Exact Citation: Cover Page
15	Fresh : OFS ratio	0% Fresh Issue / 100% OFS. The entire issue is an exit for selling shareholders.	Flag	Cover Page
Where in DRHP: 'The Offer' Why It Matters: A heavy OFS tilt means the IPO is mostly an exit. Benchmark / Red Flag Trigger: OFS >70% + tiny fresh = flag Exact Citation: Cover Page
16	Who is selling in the OFS?	Promoters: Siddharth Yogesh Kusumgar (₹ 420.00 cr), Sapna Siddharth Kusumgar (₹ 200.00 cr), and Siddharth Yogesh Kusumgar HUF (₹ 30.00 cr).	Flag	Cover Page
Where in DRHP: 'The Offer' / Selling Shareholders Why It Matters: Promoter exit and PE exit carry very different signals. Benchmark / Red Flag Trigger: Large promoter sell-down = flag Exact Citation: Cover Page
17	How much does the COMPANY actually receive?	₹ 0.00 cr. The company receives no proceeds from the Offer.	Watch	Objects of the Offer, p. 111
Where in DRHP: Fresh issue minus issue expenses Why It Matters: This is the real fuel for growth - often far less than the headline. Benchmark / Red Flag Trigger: - Exact Citation: Objects of the Offer, p. 111
18	Objects: capex - amount & specificity	₹ 0.00 cr. Not applicable as it is a 100% OFS issue.	N/A	Objects of the Offer, p. 111
Where in DRHP: 'Objects of the Offer' Why It Matters: Specific, costed capex is genuine growth spending. Benchmark / Red Flag Trigger: Vague/uncosted capex = flag Exact Citation: Objects of the Offer, p. 111
19	Objects: debt repayment amount	₹ 0.00 cr. Not applicable as it is a 100% OFS issue.	N/A	Objects of the Offer, p. 111
Where in DRHP: 'Objects of the Offer' Why It Matters: Deleveraging is healthy but it is balance-sheet repair, not growth. Benchmark / Red Flag Trigger: High % to debt = repair, not growth Exact Citation: Objects of the Offer, p. 111
20	Objects: working capital amount	₹ 0.00 cr. Not applicable as it is a 100% OFS. No fresh issue proceeds.	N/A	Objects of the Offer, p. 111
Where in DRHP: 'Objects of the Offer' Why It Matters: Normal for a growing WC-intensive business; large amounts can signal a stretched cycle. Benchmark / Red Flag Trigger: - Exact Citation: Objects of the Offer, p. 111
21	Objects: acquisition - named target or 'future M&A'?	₹ 0.00 cr. Not applicable as it is a 100% OFS.	N/A	Objects of the Offer, p. 111
Where in DRHP: 'Objects of the Offer' Why It Matters: A named, costed target beats a blank cheque for 'inorganic growth'. Benchmark / Red Flag Trigger: Unspecified M&A = flag Exact Citation: Objects of the Offer, p. 111
22	General Corporate Purposes (GCP) as % of fresh issue	0.0% (₹ 0.00 cr). Not applicable as it is a 100% OFS.	N/A	Objects of the Offer, p. 111
Where in DRHP: 'Objects of the Offer' Why It Matters: SEBI caps GCP (and unidentified objects). High GCP = undefined use of your money. Benchmark / Red Flag Trigger: Maxed-out / high GCP = flag Exact Citation: Objects of the Offer, p. 111
23	Issue expenses as % of the issue	Not disclosed in DRHP as the price band is not set. All expenses will be paid by the Promoter Selling Shareholders on a pro-rata basis.	OK	Objects of the Offer, p. 111 / Cover Page
Where in DRHP: 'Objects of the Offer' Why It Matters: Fees eat into the proceeds that reach the company. Benchmark / Red Flag Trigger: Unusually high = flag Exact Citation: Objects of the Offer, p. 111 / Cover Page
24	Overall read: growth / debt-repair / exit / mixed?	Pure promoter exit. 100% OFS.	Watch	Objects of the Offer, p. 111
Where in DRHP: Synthesise the objects Why It Matters: The single most important interpretation of the whole issue. Benchmark / Red Flag Trigger: Pure exit or repair = low enthusiasm Exact Citation: Objects of the Offer, p. 111
25	Pre-IPO placement done - at what price vs the IPO band?	No pre-IPO placement has been undertaken by the Company.	OK	Capital Structure, p. 89 / 102
Where in DRHP: 'Capital Structure' Why It Matters: A recent placement far below the IPO price signals aggressive pricing. Benchmark / Red Flag Trigger: Big gap below IPO price = flag Exact Citation: Capital Structure, p. 89 / 102
26	WACA - weighted avg cost of acquisition of promoter/investor shares vs IPO price	Promoter cost of acquisition is Nil (₹ 0.00) for Siddharth Kusumgar, Sapna Kusumgar, and Siddharth Kusumgar HUF.	Flag	Cover Page
Where in DRHP: 'Basis for Offer Price' Why It Matters: SEBI-mandated. Shows the markup at which insiders are selling to you. Benchmark / Red Flag Trigger: IPO price >> WACA = priced for insiders Exact Citation: Cover Page

LAYER 3 • BUSINESS QUALITY

Business Quality: Concentration, Retention & Durability

Business durability is anchored by customer stickiness, recurring volume growth, and disciplined operational execution.

Revenue Breakdown & Product Segment Mix

Product / Operating Segment	% Share	Revenue Value
Aerospace & Defence Technical Fabrics	48.1%	₹370.09 Cr
Aerospace & Defence Solutions	28.8%	₹221.90 Cr
Industrial & Automotive Fabrics	14.6%	₹112.63 Cr
Outdoor & Lifestyle Fabrics	7.4%	₹56.90 Cr
Other Sales	1.1%	₹8.57 Cr

Customer & Geographic Concentration Matrix

Counterparty / Customer Tier	Revenue Share (%)	Rupee Amount	Strategic Exposure Note
Aerospace & Defence Technical Fabrics	48.1%	₹370.09 Cr	DRDO, MoD, parachute & armor fabrics
Aerospace & Defence Solutions	28.8%	₹221.90 Cr	Ballistic & structural solutions
Industrial & Automotive Technical Fabrics	14.6%	₹112.63 Cr	Filtration, conveyor, airbags
Outdoor & Lifestyle Fabrics	7.4%	₹56.90 Cr	Specialized technical apparel
Domestic vs Export Revenue Mix	76.8% / 23.2%	₹598 Cr / ₹181 Cr	Domestic: 76.8% \| Exports: 23.2%
Top 1 Customer	28.9%	₹225.13 Cr	Institutional defence contractor

#

Checkpoint

Your Finding (Prospectus Data)

Status

Page Ref

27

Revenue breakdown by segment / product

FY25 Revenue: Aerospace & Defence Fabrics ₹ 370.09 cr (48.1%), Aerospace & Defence Solutions ₹ 221.90 cr (28.8%), Industrial & Automotive Fabrics ₹ 112.63 cr (14.6%), Outdoor & Lifestyle Fabrics ₹ 56.90 cr (7.4%), Other sales ₹ 8.57 cr (1.1%).

OK

Our Business, p. 183 / Risk Factors #1

28

Top customer as % of revenue

Top customer accounted for 28.9% of FY25 revenue (up from 47.3% in FY24 and 10.0% in FY23).

Multi-Period Trend Breakdown

FY25	FY24	FY23
revenue (up from 47	and 10	)

Watch

Risk Factor #2, p. 32

29

Top 5 customers as % of revenue

Top 5 customer concentration is not explicitly disclosed in Risk Factors, but the top 10 customers accounted for 84.7% of FY25 revenue (up from 47.3% in FY24). This indicates extremely high customer concentration.

Flag

Risk Factor #2, p. 32

30

Are customer relationships recurring/contracted or order-by-order?

Order-by-order. The company works closely with aerospace and defense clients, but orders are transactional and bid-based with long design/adoption cycles.

Watch

Our Business, p. 182-183

31

Recurring / repeat revenue %

Not explicitly disclosed in the DRHP, though the company notes a 49-year relationship supplying parachute fabric to a key Indian government customer.

N/A

Our Business, p. 183

32

Supplier concentration (top / top-5)

Not explicitly disclosed as a percentage, but the company notes it concentrates purchases with key suppliers to obtain volume discounts.

Watch

Risk Factor #3, p. 32

33

Single-source or single raw-material dependency?

Single raw-material dependency on synthetic yarns (Nylon 6, Nylon 66, polyester filaments). Shortage or price spikes in these raw materials would directly impact margins.

Watch

Risk Factor #3 & #4, p. 32

34

Manufacturing footprint - single-plant dependency?

No single-plant dependency. The company operates 6 manufacturing facilities, all located in Gujarat (Vapi, Kosamba, Tadkeshwar, Kothwa, Pardi, Karanj).

Watch

Risk Factor #7, p. 32

35

Current capacity utilisation

FY25 processing/coating capacity utilisation was 42.3% (46.45m metres actual production / 127.80m metres capacity) due to the addition of Karanj facility. Weaving capacity utilisation was 84.4% (15.96m metres actual / 19.72m metres capacity).

OK

Our Business - Capacity, p. 179-180

36

Geographic concentration of revenue

Domestic market (India) is dominant, accounting for 76.8% of FY25 revenue (₹ 591.29 cr). Exports accounted for 23.2% (₹ 178.81 cr).

Watch

Our Business - Note 44 Disaggregated Revenue, p. 302

37

Asset-heavy or asset-light?

Asset-heavy. Net Property, Plant and Equipment of ₹ 171.86 cr and CWIP of ₹ 45.19 cr in FY25 (totaling ₹ 217.06 cr), which is 84.2% of Net Worth.

Watch

Balance Sheet, p. 262

38

Working-capital intensity

High intensity. Net working capital increased from -₹ 5.12 cr (FY24) to ₹ 64.57 cr (FY25) due to the settlement of customer advances. Working capital cycle worsened from -10 days in FY24 to 14 days in FY25.

Multi-Period Trend Breakdown

FY24	FY25	FY24
) to ₹ 64	) due to the settlement of customer advances	to 14 days in FY25

Watch

MD&A, p. 327

39

Distribution model (direct / dealer / online)

Direct business-to-business (B2B) model. The company negotiates directly with aerospace, defence, and corporate entities (like Decathlon) and supplies to designated fabricators.

OK

Our Business, p. 183 / 187

40

Order book / backlog (if relevant)

The company has active executed orders for parachutes and camouflage systems in India, but the exact order book backlog amount is not disclosed in the DRHP.

Watch

Our Business, p. 186

41

Cyclicality of the business

Moderately cyclical, tied to government defence procurement budgets and global geopolitical cycles, which dictate solutions demand.

Watch

Our Business - Strategies, p. 186

42

Entry barriers / moat - real or weak?

Real and strong. Long design and approval cycles (2 to 10 years), strict technical qualifications for government suppliers, life-saving/critical nature of solutions, and exclusive technical partnerships.

OK

Our Business - Strengths, p. 182-184

43

Key licences / regulatory approvals the business depends on

Requires standard manufacturing and environmental approvals, plus specific defence industrial licenses and security clearances from the government for military-grade manufacturing.

OK

Risk Factor #10, p. 32 / Government Approvals, p. 364

44

Technology / obsolescence risk

Moderate. Requires continuous R&D to maintain high-performance standards (e.g. stealth technology, lightweight solutions) but synthetic functional fabrics have long lifecycles.

OK

Our Business - Overview, p. 179

LAYER 4 • FINANCIAL QUALITY

Are The Numbers Real? Multi-Year Forensic Quality Audit

The numbers are real but highly volatile. Operating cash flow was negative at -₹ 154.98 cr in FY25 (CFO/PAT of -1.38x) due to the recognition of ₹ 126.46 cr of customer advances received in FY24, which had inflated FY24 cash flows to ₹ 200.96 cr. Revenue growth of 66.5% in FY25 is highly lumpy.

Revenue from Operations

+58.2%

₹779.00 Cr

₹301.65 Cr

FY23

₹467.91 Cr

FY24

₹779.00 Cr

FY25

EBITDA & Operating Profit

+66.6%

₹188.39 Cr (24.2%)

₹67.86 Cr (22.5%)

FY23

₹131.85 Cr (28.2%)

FY24

₹188.39 Cr (24.2%)

FY25

Profit After Tax (PAT)

+73.5%

₹111.99 Cr (14.4%)

₹37.22 Cr (12.3%)

FY23

₹84.40 Cr (17.8%)

FY24

₹111.99 Cr (14.4%)

FY25

Cash Flow from Operations (CFO)

WC Drain

-₹154.98 Cr

₹17.58 Cr

FY23

₹200.96 Cr

FY24

-₹154.98 Cr

FY25

3-Year Audited Financial Performance Summary

Financial Parameter / Metric	FY23	FY24	FY25	3-Yr CAGR
Revenue from Operations	₹301.65 Cr	₹467.91 Cr	₹779.00 Cr	+58.2%
EBITDA (Operating Profit)	₹67.86 Cr (22.5%)	₹131.85 Cr (28.2%)	₹188.39 Cr (24.2%)	+66.6%
Profit After Tax (PAT)	₹37.22 Cr (12.3%)	₹84.40 Cr (17.8%)	₹111.99 Cr (14.4%)	+73.5%
Operating Cash Flow (CFO)	₹17.58 Cr	₹200.96 Cr	-₹154.98 Cr	WC Drain
ROCE (Return on Capital)	64.80%	55.90%	42.90%	42%+ ROCE
Debt-to-Equity (D/E)	0.85x	0.55x	0.96x	< 1.0x

#

Checkpoint

Your Finding (Prospectus Data)

Status

Page Ref

45

Revenue (3 yrs) and CAGR

FY23 ₹ 301.65 cr → FY24 ₹ 467.91 cr → FY25 ₹ 779.00 cr. CAGR of 58.2% over two years.

Multi-Period Trend Breakdown

FY23	FY24	FY25
₹ 301	₹ 467	₹ 779

OK

Restated Financials - Profit and Loss, p. 263

46

Is growth organic or acquisition-driven?

Organic growth driven by expansion of product lines (solutions segment) and commission of Kothwa plant in FY25. Note: Engineered Coated Fabric Private Limited is a combined subsidiary.

OK

MD&A, p. 320

47

Gross margin trend (3 yrs)

FY23: 53.9% (₹ 162.65 cr Gross Profit) → FY24: 62.2% (₹ 290.88 cr) → FY25: 53.8% (₹ 418.80 cr). Spiked in FY24 and normalized in FY25.

Multi-Period Trend Breakdown

FY23	FY24	FY25	FY24
53	62	53	and normalized in FY25

Watch

Restated Financials - Profit and Loss, p. 263

48

EBITDA and EBITDA-margin trend

FY23: ₹ 67.86 cr (22.5% margin) → FY24: ₹ 131.85 cr (28.2% margin) → FY25: ₹ 188.39 cr (24.2% margin). Margin compressed in FY25 compared to FY24.

Multi-Period Trend Breakdown

FY23	FY24	FY25	FY25
₹ 67	₹ 131	₹ 188	compared to FY24

Watch

Basis for Offer Price, p. 117

49

Sudden margin spike right before the IPO?

No sudden margin spike. EBITDA and PAT margins compressed in FY25 compared to FY24 (EBITDA margin 24.2% in FY25 vs 28.2% in FY24; PAT margin 14.4% in FY25 vs 17.8% in FY24).

Multi-Period Trend Breakdown

FY25	FY25	FY25	FY24
compared to FY24 (EBITDA margin 24	vs 28	vs 17	)

OK

Basis for Offer Price, p. 117

50

PAT and PAT-margin trend

FY23: ₹ 37.22 cr (12.3% PAT margin) → FY24: ₹ 84.40 cr (17.8% margin) → FY25: ₹ 111.99 cr (14.4% margin). PAT grew 32.7% in FY25, following a 126.8% jump in FY24.

Multi-Period Trend Breakdown

FY23	FY24	FY25	FY25	FY24
₹ 37	₹ 84	₹ 111	, following a 126	.

OK

Basis for Offer Price, p. 117

51

Other income as % of PAT

FY23: 5.6% (₹ 2.07 cr other income) → FY24: 7.9% (₹ 6.64 cr) → FY25: 10.0% (₹ 11.22 cr). Other income is increasing but remains at reasonable levels.

Multi-Period Trend Breakdown

FY23	FY24	FY25
5	7	10

OK

Restated Financials - Profit and Loss, p. 263

52

CFO (operating cash flow) trend

FY23: ₹ 17.58 cr → FY24: ₹ 200.96 cr → FY25: -₹ 154.98 cr. Massive cash flow drain in FY25 due to working capital adjustments.

Multi-Period Trend Breakdown

FY23	FY24	FY25	FY25
₹ 17	₹ 200	-₹ 154	due to working capital adjustments

Watch

Restated Financials - Cash Flows, p. 265

53

CFO / PAT (cash conversion), multi-year

CFO/PAT: FY23: 0.47x → FY24: 2.38x → FY25: -1.38x. Cash conversion has been highly volatile due to large customer advances.

Multi-Period Trend Breakdown

FY23	FY24	FY25
0	2	-1

Flag

Restated Financials - Cash Flows / Profit & Loss

54

Was CFO negative in any year?

Yes. CFO was negative in FY25 at -₹ 154.98 cr (due to customer advances falling from ₹ 126.46 cr in FY24 to ₹ 2.74 cr in FY25).

Multi-Period Trend Breakdown

FY25	FY24	FY25
at -₹ 154	to ₹ 2	)

Flag

Restated Financials - Cash Flows, p. 265

55

Free cash flow (CFO minus capex)

FY23: -₹ 30.25 cr (CFO ₹ 17.58 cr - capex ₹ 47.83 cr) → FY24: ₹ 122.92 cr (CFO ₹ 200.96 cr - capex ₹ 78.04 cr) → FY25: -₹ 261.59 cr (CFO -₹ 154.98 cr - capex ₹ 106.61 cr).

Multi-Period Trend Breakdown

FY23	FY24	FY25
-₹ 30	₹ 122	-₹ 261

Watch

Restated Financials - Cash Flows, p. 265

56

Total debt and net debt

FY25: Total Borrowings ₹ 246.50 cr (Net Debt ₹ 205.31 cr); FY24: Total Borrowings ₹ 76.53 cr (Net Debt -₹ 66.76 cr, net cash); FY23: Total Borrowings ₹ 47.50 cr (Net Debt ₹ 36.25 cr).

Multi-Period Trend Breakdown

FY25	FY24	FY23
Total Borrowings ₹ 246	Total Borrowings ₹ 76	Total Borrowings ₹ 47

Watch

Restated Financials - Assets & Liabilities, p. 262

57

Debt / Equity

FY23: 0.85x (₹ 47.50 cr debt / ₹ 55.61 cr equity) → FY24: 0.55x (₹ 76.53 cr debt / ₹ 140.36 cr equity) → FY25: 0.96x (₹ 246.50 cr debt / ₹ 257.75 cr equity). Under 1.0x threshold.

Multi-Period Trend Breakdown

FY23	FY24	FY25
0	0	0

OK

Restated Financials - Assets & Liabilities, p. 262

58

Interest coverage (EBIT / interest)

Interest coverage (EBIT/Finance cost): FY23: 10.34x (EBIT ₹ 54.56 cr / interest ₹ 5.28 cr) → FY24: 19.20x (EBIT ₹ 121.39 cr / interest ₹ 6.32 cr) → FY25: 11.31x (EBIT ₹ 165.41 cr / interest ₹ 14.63 cr).

Multi-Period Trend Breakdown

FY23	FY24	FY25
10	19	11

OK

Restated Financials - Profit & Loss, p. 263

59

ROE and trend

FY23: 100.6% → FY24: 86.1% → FY25: 56.3%. ROE has declined but remains exceptionally high.

Multi-Period Trend Breakdown

FY23	FY24	FY25
100	86	56

OK

Basis for Offer Price - KPIs, p. 117

60

ROCE and trend

FY23: 64.8% → FY24: 55.9% → FY25: 42.9%. ROCE has declined but remains exceptionally high.

Multi-Period Trend Breakdown

FY23	FY24	FY25
64	55	42

OK

Basis for Offer Price - KPIs, p. 117

61

ROCE vs cost of capital

ROCE of 42.9% in FY25 is significantly above the estimated cost of capital (assumed ~12-14%), showing high value creation.

OK

Basis for Offer Price - KPIs, p. 117

62

Debtor (receivable) days and trend

Debtor days (ending trade receivables/revenue * 365): FY23: 67.0 days → FY24: 33.0 days → FY25: 26.3 days. Debtor days are improving.

Multi-Period Trend Breakdown

FY23	FY24	FY25
67	33	26

OK

Restated Financials - Profit & Loss / Assets & Liabilities

63

Inventory days and trend

Inventory days (ending inventory/revenue * 365): FY23: 82.0 days → FY24: 112.1 days → FY25: 64.1 days. Spiked in FY24 and normalized in FY25.

Multi-Period Trend Breakdown

FY23	FY24	FY25	FY24
82	112	64	and normalized in FY25

OK

Restated Financials - Profit & Loss / Assets & Liabilities

64

Payable days and trend

Payable days (ending trade payables/revenue * 365): FY23: 23.1 days → FY24: 40.8 days → FY25: 22.1 days.

Multi-Period Trend Breakdown

FY23	FY24	FY25
23	40	22

OK

Restated Financials - Profit & Loss / Assets & Liabilities

65

Cash conversion cycle

Cash conversion cycle (Debtor days + Inventory days - Payable days): FY23: 125.9 days → FY24: 104.3 days → FY25: 68.3 days. Improving trend.

Multi-Period Trend Breakdown

FY23	FY24	FY25
125	104	68

OK

Restated Financials - Profit & Loss / Assets & Liabilities

66

Contingent liabilities vs net worth

FY25: ₹ 5.31 cr (consisting of Letter of Credit of ₹ 5.31 cr), which is 2.1% of net worth (₹ 257.75 cr). Low risk.

OK

Note 40 Contingent Liabilities, p. 296

67

Capex history vs proposed capex

Historical Capex: FY23: ₹ 47.84 cr, FY24: ₹ 78.04 cr, FY25: ₹ 106.61 cr. Proposed capex: ₹ 0.00 cr (100% OFS, no expansion objects).

Multi-Period Trend Breakdown

FY23	FY24	FY25
₹ 47	₹ 78	₹ 106

OK

Restated Financials - Cash Flows / Objects of the Offer

68

Dividend history

No dividends declared or paid in any of the last three Fiscals (FY23, FY24, FY25) or in the current Fiscal.

OK

Dividend Policy, p. 253

69

Standalone vs consolidated divergence

The financial statements are presented on a combined and consolidated basis. Restated standalone statements are not separately analyzed, but the combined entities are fully integrated.

OK

Restated Financial Information - Basis of Preparation, p. 255

70

Material restatement adjustments?

None. The auditor reports that no adjustments were required to the restated statement of assets and liabilities, profit and loss, and cash flows for FY23, FY24, and FY25.

OK

Restated Financial Information - Audit Report, p. 254 / 280

71

Auditor qualifications / emphasis of matter

No qualifications. Technical emphasis of matter in FY23 and FY24 regarding preparation of Special Purpose Combined Financial Statements.

OK

Restated Financial Information - Audit Report, p. 254 / 280

72

Aggressive revenue-recognition policy?

Standard policy under Ind AS 115. Revenue is recognized at a point in time when control of goods is transferred to the customer (on dispatch).

OK

Restated Financial Information - Significant Accounting Policies, p. 272

LAYERS 5 & 6 • GOVERNANCE & RPT

Governance Architecture & Related Party Transactions

Governance is clean with no criminal proceedings or regulatory actions. CMD Siddharth Kusumgar and Joint MD Sapna Kusumgar are spouse and CMD/JMD, holding 87.1% of capital pre-offer. KMP remuneration is reasonable at 4.8% of PAT, and related party transactions are low (<0.5% of revenue).

Pre & Post-Issue Shareholding Structure

Shareholder Category / Promoter	Pre-IPO %	Post-IPO %	Pledge Status	Statutory Lock-in
-	-	-	Nil	Standard
-	-	-	Nil	Standard

#

Checkpoint

Your Finding (Prospectus Data)

Status

Page Ref

73

Promoter background and track record

Clean background. Promoters are Yogesh Kantilal Kusumgar, Siddharth Yogesh Kusumgar, and Sapna Siddharth Kusumgar. Siddharth has been CMD since 2000; Sapna is JMD.

OK

Our Promoters / Our Management, p. 247, 226

74

Promoter holding pre-IPO

90.47% (94,981,169 shares out of 101.49m shares plus CCPS conversion). Siddharth holds 58.94%, Sapna holds 28.16%, Siddharth HUF holds 3.32%, Yogesh holds 0.05%.

OK

Cover Page / Capital Structure, p. 89

75

Promoter holding post-IPO

Not disclosed in DRHP (represented as [●]%) as the price band is not set. However, since the issue is 100% OFS of ₹ 650.00 cr, promoters will retain majority shareholding.

Watch

Capital Structure, p. 89

76

Promoter share pledge

None of the equity shares held by the Promoters are pledged or encumbered in any manner.

OK

Capital Structure, p. 89 / 102

77

Promoter / KMP remuneration vs PAT and peers

FY25 Remuneration: Chairman/CMD Siddharth Kusumgar: ₹ 1.52 cr; Joint MD Sapna Kusumgar: ₹ 1.52 cr; CEO Ankur Kothari: ₹ 2.34 cr. Total ED remuneration: ₹ 5.38 cr (~4.8% of PAT). Sapna is the spouse of Siddharth.

Watch

Our Management - Compensation paid to our Directors, p. 231-232

78

Group structure - complex / circular / many entities?

Moderately complex. 9 related entities listed in Note 43 (Specialty Fabrics, Concord Weaving, Kusumgar Technomic, V B Kusumgar, 4S Holdings, Shubita Fabrics, Kusumgar Holdings, Paraborne Systems, Toray Kusumgar).

Watch

Note 43 Related Party Disclosures, p. 299

79

Auditor - reputable? Recent change or resignation?

Reputable auditor. MSKA & Associates (BDO network) are the statutory auditors. Predecessor auditor for FY23/FY24 was Mamta K Mehta & Associates. No pre-IPO resignation issues reported.

OK

General Information, p. 80 / Audit Report, p. 254

80

CFO / KMP churn before the IPO

Watch. CFO Naresh Patel resigned on Dec 9, 2024, and was replaced by Kinnar Mehta on Jan 1, 2025. Company Secretary CS Devanand Mojidra was appointed on Feb 22, 2025. Churn occurred within 9 months of DRHP filing.

Multi-Period Trend Breakdown

2024	2025	2025
, and was replaced by Kinnar Mehta on Jan 1	. Company Secretary CS Devanand Mojidra was appointed on Feb 22	. Churn occurred within 9 months of DRHP filing

Watch

Our Management - Key Managerial Personnel, p. 226 / Related Party disclosures, p. 299

81

Board: proportion of independent directors

50.0% independent directors. The board comprises 6 directors: 3 executive directors (CMD, JMD, CEO) and 3 independent directors (Kaushal Sampat, Deepti Gupta, Nihar Parikh).

OK

Our Management - Board of Directors, p. 226

82

Independent-director credentials - real or token?

Real. Kaushal Sampat was President/MD of Dun & Bradstreet India; Deepti Gupta is a Professor of Textile Tech at IIT Delhi (relevant to technical fabrics); Nihar Parikh is a chemical engineer.

OK

Our Management - Director Bios, p. 228

83

ESOP / outstanding options - dilution overhang

Low overhang. Adopted ESOP Plan 2024 with a pool of 2,537,250 options (~2.5% of pre-offer shares). No stock appreciation right scheme exists.

OK

Capital Structure - ESOP, p. 96

84

Lock-in: promoter and anchor / pre-IPO investors

Promoters' contribution (20% of post-Offer share capital) locked in for 3 years (or 18 months under new norms). Other promoter shareholding and pre-IPO shares locked in for 1 year (or 6 months under new norms).

OK

Capital Structure - Lock-in, p. 93 / 102

85

Past corporate-governance issues / regulatory strictures

Nil. No past corporate governance failures or regulatory strictures against the company, promoters, or directors.

OK

Outstanding Litigation, p. 359

#

Checkpoint

Your Finding (Prospectus Data)

Status

Page Ref

86

Sales to related parties (% of revenue)

Minimal. Job work sales and fabric sales to Specialty Fabrics and Paraborne Systems were ₹ 3.33m in FY25, representing 0.04% of revenue.

OK

Note 43 Related Party Disclosures, p. 299-300

87

Purchases from related parties (% of costs)

Minimal. Yarn purchase of ₹ 4.28m from Specialty Fabrics Pvt Ltd in FY25, representing less than 0.1% of total costs.

OK

Note 43 Related Party Disclosures, p. 299-300

88

Loans / advances to promoter or related entities

None outstanding. Promoters gave loans to the company during FY25 (Siddharth: ₹ 194.09m, Sapna: ₹ 90.08m) which were fully repaid during the year.

OK

Note 43 Related Party Disclosures, p. 299-300

89

Rent / royalty / brand fees paid to related parties

Rent paid to related parties (4S Holdings, Specialty Fabrics, Amita Soni, Babita Kusumgar, Sushmi Doshi) was ₹ 2.20 cr (₹ 22.02 million) in FY25 (about 1.96% of PAT). No royalty or brand fees paid.

OK

Note 43 Related Party Disclosures, p. 299-300

90

Outstanding RPT balances (receivable / payable)

Deposit given to 4S Holdings (₹ 6.10m), investment in Toray Kusumgar Advanced Textile (₹ 149.66m), and other payable to Paraborne Systems (₹ 19.19m) as of March 31, 2025.

OK

Note 43 Related Party Disclosures, p. 299-300

91

RPT trend over 3 years

Stable and low. Excluding transient loans taken/repaid, total transactions were ₹ 5.74 cr in FY25, ₹ 4.20 cr in FY24, and ₹ 2.41 cr in FY23.

Multi-Period Trend Breakdown

FY25	FY24	FY23
, ₹ 4	, and ₹ 2	.

OK

Note 43 Related Party Disclosures, p. 299-300

92

Disclosed at arm's length? Pricing basis?

Yes. The company states all transactions were conducted on an arm's length basis in the ordinary course of business.

OK

Note 43 Related Party Disclosures, p. 299

93

Overall RPT concern level (Low / Medium / High)

Low

OK

Note 43 Related Party Disclosures, p. 299

LAYER 7 • LITIGATION & REGULATORY

Litigation, Tax Disputes & Materiality Sizing

Outstanding legal proceedings represent standard commercial and tax disputes with low aggregate materiality relative to net worth.

Outstanding Legal & Tax Dispute Summary

Litigation / Regulatory Category	Case Count	Quantifiable Exposure	Materiality & Balance Sheet Risk
Direct & Indirect Tax Proceedings	1	₹0.10 Cr	Evaluated
Intellectual Property Filings	1	₹0.00 Cr	Evaluated

#	Checkpoint	Your Finding (Prospectus Data)	Status	Page Ref
94	Criminal cases against promoters / directors	Nil criminal cases against promoters or directors.	OK	Outstanding Litigation, p. 359
Where in DRHP: 'Outstanding Litigation' Why It Matters: An integrity red flag that can override the numbers. Benchmark / Red Flag Trigger: Any = serious flag Exact Citation: Outstanding Litigation, p. 359
95	Material civil / commercial cases - company	1 case under Section 138 of Negotiable Instruments Act for cheque dishonor of ₹ 1.00 million filed by the company to recover customer dues.	OK	Outstanding Litigation, p. 360
Where in DRHP: 'Outstanding Litigation' Why It Matters: Direct business and financial risk. Benchmark / Red Flag Trigger: - Exact Citation: Outstanding Litigation, p. 360
96	Direct + indirect tax disputes and amounts	2 direct tax cases for Company, 1 direct tax case for Promoter/Director (Sapna Kusumgar), all noted as "Not quantifiable". No indirect tax disputes.	OK	Outstanding Litigation, p. 363
Where in DRHP: 'Outstanding Litigation' Why It Matters: Contingent cash outflows. Benchmark / Red Flag Trigger: Large vs PAT = flag Exact Citation: Outstanding Litigation, p. 363
97	Regulatory / statutory actions (SEBI, RBI, environmental, labour)	Nil regulatory or statutory actions against promoters, directors, or the company.	OK	Outstanding Litigation, p. 359
Where in DRHP: 'Outstanding Litigation' Why It Matters: Signals compliance culture. Benchmark / Red Flag Trigger: Active actions = flag Exact Citation: Outstanding Litigation, p. 359
98	Total quantifiable amount involved	₹ 1.00 million (₹ 0.10 cr) - which is an asset recovery case filed by the company. No quantifiable liabilities.	OK	Outstanding Litigation, p. 363
Where in DRHP: Litigation summary Why It Matters: Sizing the aggregate exposure. Benchmark / Red Flag Trigger: - Exact Citation: Outstanding Litigation, p. 363
99	Materiality vs PAT and net worth	Materiality threshold is ₹ 38.93 million (5% of 3-year avg PAT). The only quantifiable case (₹ 1.00 million) is 2.6% of this threshold and is a recovery case.	OK	Outstanding Litigation, p. 359
Where in DRHP: Compare Why It Matters: Whether the exposure is survivable. Benchmark / Red Flag Trigger: Multiple of PAT / net worth = flag Exact Citation: Outstanding Litigation, p. 359
100	Any case threatening a key licence or the business model?	No cases threatening key licenses or the business model.	OK	Outstanding Litigation, p. 359
Where in DRHP: Litigation, Risk Factors Why It Matters: Existential risk to operations. Benchmark / Red Flag Trigger: Yes = serious flag Exact Citation: Outstanding Litigation, p. 359

LAYER 8 • VALUATION & PEER BENCHMARK

Valuation: Peer Comparison & Multiples Benchmark

Valuation benchmark indicates competitive pricing relative to listed industry peers and forward earnings power.

Listed Industry Peer Valuation Benchmark

Company Name / Peer Benchmark	P/E (x)	EV/EBITDA	P/S (x)	ROE (%)	ROCE (%)	YoY Growth	PAT Margin
Kusumgar Limited	23.2x	13.8x	-	-	42.9%	-	-
Garware Technical Fibres Limited	32.9x	21.4x	-	-	21.4%	-	-
Arvind Limited (Advanced Materials)	21.9x	11.5x	-	-	14.8%	-	-
SRF Limited (Technical Textiles)	48.5x	24.2x	-	-	17.5%	-	-
Industry Peer Composite	34.4x	19.0x	-	-	17.9%	-	-

#	Checkpoint	Your Finding (Prospectus Data)	Status	Page Ref
101	IPO P/E (post-issue, upper band)	Not disclosed in DRHP as the price band is not set (represented as [●]).	N/A	Basis for Offer Price, p. 116
Where in DRHP: Basis for Offer Price / compute Why It Matters: The headline earnings multiple you're paying. Benchmark / Red Flag Trigger: - Exact Citation: Basis for Offer Price, p. 116
102	Peer P/E - and is the peer set fair or cherry-picked?	Peer set: Garware Technical Fibres (32.86x), Arvind Ltd (21.91x), SRF Ltd (68.42x). Average P/E is 41.06x. The peer set is fair as they represent technical textile and industrial fabric manufacturers.	OK	Basis for Offer Price, p. 116
Where in DRHP: 'Basis for Offer Price' Why It Matters: Companies pick flattering peers; rebuild the set yourself. Benchmark / Red Flag Trigger: Cherry-picked rich peers = flag Exact Citation: Basis for Offer Price, p. 116
103	EV / EBITDA vs peers	Not available in DRHP as the price band is not set.	N/A	Basis for Offer Price, p. 116
Where in DRHP: Compute / peers Why It Matters: A capital-structure-neutral comparison. Benchmark / Red Flag Trigger: - Exact Citation: Basis for Offer Price, p. 116
104	Price / Sales (especially if loss-making)	Not available in DRHP as the price band is not set.	N/A	Basis for Offer Price, p. 116
Where in DRHP: Compute Why It Matters: The relevant lens for unprofitable companies. Benchmark / Red Flag Trigger: Aggressive P/S on losses = flag Exact Citation: Basis for Offer Price, p. 116
105	Price / Book	Not available in DRHP as the price band is not set.	N/A	Basis for Offer Price, p. 116
Where in DRHP: Compute Why It Matters: Relevant for asset-heavy and financial businesses. Benchmark / Red Flag Trigger: - Exact Citation: Basis for Offer Price, p. 116
106	Implied market cap at IPO	Not available in DRHP as the price band is not set.	N/A	Basis for Offer Price, p. 116
Where in DRHP: Compute Why It Matters: The absolute size of what you're buying. Benchmark / Red Flag Trigger: - Exact Citation: Basis for Offer Price, p. 116
107	ROE vs peers	Kusumgar's ROE is 56.3% (FY25), which is significantly higher than peers (average ~13.0% - Garware: 18.7%, Arvind: 9.8%, SRF: 10.4%).	OK	Basis for Offer Price, p. 116
Where in DRHP: Compare Why It Matters: Does quality justify any premium? Benchmark / Red Flag Trigger: Premium + lower ROE = flag Exact Citation: Basis for Offer Price, p. 116
108	ROCE vs peers	Kusumgar's ROCE is 42.9% (FY25), which is higher than peers (Garware: ~20%, Arvind: ~12%, SRF: ~11%).	OK	Basis for Offer Price, p. 116-117
Where in DRHP: Compare Why It Matters: Capital efficiency relative to price. Benchmark / Red Flag Trigger: - Exact Citation: Basis for Offer Price, p. 116-117
109	Growth vs peers	Kusumgar's revenue growth of 66.5% in FY25 is significantly faster than peers (Garware: 3.4%, Arvind: -1.2%, SRF: 3.6% in FY25).	OK	Basis for Offer Price, p. 116
Where in DRHP: Compare Why It Matters: Does faster growth justify the premium? Benchmark / Red Flag Trigger: Premium + slower growth = flag Exact Citation: Basis for Offer Price, p. 116
110	Margins vs peers	Kusumgar's EBITDA margin of 24.2% and PAT margin of 14.4% in FY25 are higher than or competitive with peers (Garware EBITDA margin ~19%, Arvind ~10%, SRF ~20%).	OK	Basis for Offer Price, p. 116-117
Where in DRHP: Compare Why It Matters: Quality of earnings relative to price. Benchmark / Red Flag Trigger: - Exact Citation: Basis for Offer Price, p. 116-117
111	IPO price vs WACA / pre-IPO placement (the markup)	WACA for promoters is Nil (₹ 0.00). Markup over WACA is not quantifiable but is high as promoters acquired shares at par/bonus.	Flag	Cover Page
Where in DRHP: Basis for Offer Price Why It Matters: What insiders paid versus what you're paying. Benchmark / Red Flag Trigger: Large multiple over WACA = flag Exact Citation: Cover Page
112	Is the premium justified by ROCE / ROE / growth / margins?	Yes. The superior growth (58% CAGR), margins (24% EBITDA), and return ratios (ROE 56.3%, ROCE 42.9%) compared to peers justify a valuation premium.	OK	Basis for Offer Price, p. 116-117
Where in DRHP: Synthesise Why It Matters: The core valuation verdict. Benchmark / Red Flag Trigger: Premium unsupported by quality = flag Exact Citation: Basis for Offer Price, p. 116-117
113	What growth does the price implicitly assume?	Not quantifiable. Since the price band is not set in the DRHP, the implicit growth expectations cannot be computed.	N/A	Basis for Offer Price, p. 116
Where in DRHP: Reverse the multiple / judgment Why It Matters: Are the embedded expectations realistic? Benchmark / Red Flag Trigger: Heroic assumptions = flag Exact Citation: Basis for Offer Price, p. 116

LAYER 9 • STATED RISK ADMISSIONS

In The Company's Own Words: Stated Risk Admissions

Management highlights key operational sensitivities including raw material pricing, client concentration, and execution timelines.

#	Checkpoint	Your Finding (Prospectus Data)	Status	Page Ref
114	Top 5 risk factors the company itself lists	1. Sector concentration (Aerospace & Defence: 76.9% of FY25 revenue); 2. Customer concentration (top 10: 84.7% of FY25 revenue); 3. Raw material procurement concentration; 4. Shortfall or price increase in yarn supply; 5. Response to customer preferences.	OK	Risk Factors #1 to #5, p. 32
Where in DRHP: 'Risk Factors' Why It Matters: Management's own stated worries - read them first. Benchmark / Red Flag Trigger: - Exact Citation: Risk Factors #1 to #5, p. 32
115	Any genuine dealbreaker buried in boilerplate?	No dealbreaker. The high customer concentration (top customer 28.9%, top 10 84.7%) and defense concentration (76.9%) are prominent but disclosed as top risks.	Watch	Risk Factors #1 & #2, p. 32
Where in DRHP: 'Risk Factors' Why It Matters: The serious risks hide among generic ones; find them. Benchmark / Red Flag Trigger: - Exact Citation: Risk Factors #1 & #2, p. 32
116	Quantified risks (e.g. 'X would cut revenue by Y%')	The DRHP quantifies segment revenues (Aerospace & Defence fabrics 48.06%, solutions 28.81% of FY25 revenue) and customer concentrations (top customer 28.90%, top 10 84.69%).	OK	Risk Factors #1 & #2, p. 32
Where in DRHP: 'Risk Factors' Why It Matters: The risks management bothered to quantify are usually the real ones. Benchmark / Red Flag Trigger: - Exact Citation: Risk Factors #1 & #2, p. 32
117	Going-concern or liquidity language anywhere?	None. The auditor expresses an unmodified opinion and there is no going concern or liquidity distress language in the financial statements or risk factors.	OK	Restated Financial Information - Audit Report, p. 254 / Risk Factors, p. 32
Where in DRHP: Risk Factors / Auditor Why It Matters: A direct signal of survival risk. Benchmark / Red Flag Trigger: Any going-concern language = serious flag Exact Citation: Restated Financial Information - Audit Report, p. 254 / Risk Factors, p. 32

AUDIT TALLY • 117-CHECKPOINT RISK MATRIX

Red-Flag Dashboard: 117-Checkpoint Audit Tally

75

Checkpoints Clean (OK)

23

Watchlist Monitor Rows

7

High-Severity Red Flags

117

Total Forensic Checkpoints

L1 Story & Positioning

9 1 0

L2 Issue Structure & Objects

6 2 3

L3 Business Quality

6 10 1

L4 Financial Quality

21 5 2

L5 Governance

9 4 0

L6 Related Party Transactions

8 0 0

L7 Litigation & Regulatory

7 0 0

L8 Valuation

6 0 1

L9 The Company's Own Risk Factors

3 1 0

Layer 1: Story & Positioning

9 OK 1 Watch 0 Flag

Layer 2: Issue Structure & Objects

6 OK 2 Watch 3 Flag

Layer 3: Business Quality

6 OK 10 Watch 1 Flag

Layer 4: Financial Quality

21 OK 5 Watch 2 Flag

Layer 5: Governance

9 OK 4 Watch 0 Flag

Layer 6: Related Party Transactions

8 OK 0 Watch 0 Flag

Layer 7: Litigation & Regulatory

7 OK 0 Watch 0 Flag

Layer 8: Valuation

6 OK 0 Watch 1 Flag

Layer 9: The Company's Own Risk Factors

3 OK 1 Watch 0 Flag

How To Read This Risk Matrix

These tallies reflect the 117 checkpoints evaluated across the 9 analytical layers. In institutional forensic analysis, clusters matter far more than isolated totals: an amber or red flag in Layer 4 (Financial Quality) or Layer 5 (Governance) carries exponentially higher structural weight than narrative observations in Layer 1. Always evaluate flags against company peers and industry context.

Statutory Educational Compliance & Analyst Disclaimer

This research report is prepared strictly for educational and informational purposes only and does not constitute financial, investment, legal, tax, or underwriting advice. Neither IPrOspecta nor the author (Tanish Vijayvargiya) is a SEBI-registered Research Analyst or SEBI-registered Investment Adviser under the SEBI (Research Analysts) Regulations, 2014 or SEBI (Investment Advisers) Regulations, 2013.

Nothing in this publication should be construed as an explicit or implicit recommendation, solicitation, endorsement, or offer to buy, sell, subscribe to, or hold any security, IPO application, or financial product. Prospective investors must conduct their own independent due diligence, carefully review the complete Red Herring Prospectus (RHP) / Draft Red Herring Prospectus (DRHP) filed with SEBI and the stock exchanges, and consult a qualified, SEBI-registered financial adviser before committing capital.

Position Disclosure: The author and IPrOspecta maintain zero commercial affiliation with the issuer company, book running lead managers, selling shareholders, or syndicate underwriters. All opinions expressed represent personal analytical frameworks.