Harikanta Overseas Limited is a manufacturer of synthetic textile fabrics, specializing in products like Ikat fabrics, polyester garment fabrics, and saree fabrics. The majority of its production is utilized in the manufacturing of various types of sarees, primarily catering to the women’s wear segment. The business has deep roots, originating from manual power looms operated by the promoters' grandfather, before evolving into a modern corporate entity The company’s business model centers on an integrated manufacturing process based in Surat, Gujarat, the textile hub of India. In addition to its domestic operations, the company has expanded its horizons into global trade, exporting Ikat and Dhupion fabrics to build an international customer base. This strategic move was formalized with the incorporation of the private limited entity in 2018 to broaden its market presence. Currently, the company is operating from its facility in the Diamond Industrial Park and is undergoing a major expansion plan. This plan includes constructing an additional 44,893 sq. ft. of factory space and investing in advanced production units through the purchase of new plant and machinery. These efforts are designed to significantly increase capacity utilization and support a wider product range, such as poly linen and natural fibers. The future outlook for Harikanta focuses on leveraging the combined experience of its multi-generational leadership—Hardik, Abhishek, and Nilesh Gotawala—to drive efficiency and modern production practices. With the fresh capital from this public issue, the company aims to strengthen its domestic market position through its associate concerns while scaling its manufacturing capabilities to meet growing domestic and international demand. As per financial performance, Harikanta Overseas Limited has posted total income / net profits of Rs 15.06 / 0.25 Cr (FY23), Rs 11.27 / Rs 0.81 Cr (FY24), Rs 35.50 Cr / 4.46 Cr (FY25) and Rs 26.28 Cr / 5.08 Cr (Upto 30.11.25 FY26). So as per previous financials data, company has shown good growth, but sudden rise in net profit, negative operating cash flow in FY25 and 8M FY26 and sudden rise in trade receivables in 8M FY26 raised concerns. Company has an average EPS of Rs 3.84 and average RoNW of 33.76% for last three fiscals. Issue is priced at a P/BV of 3.68 as per NAV of Rs 26.08/- as on 30.11.25 If we attribute latest earnings of FY24, FY25 and annualised FY26 on equity post issue, then asking price is at a P/E of around 115.53, 21.20 and 12.42 respectively. As per RHP, comparison between listed peers is shown in above table. On BRLM's front, Interactive Financial Services Limited is associated with this IPOs, and has handled 30 IPOs in last three fiscal years. From last 10 IPOs, six opened below issue price and remaining all above issue price or at par, on the day of listing. As of now, from last 10 IPOs, seven are trading below issue price and remaining all are trading above issue price or at par. (as on 15.05.26) As per financials, Harikanta Overseas Limited has shown good growth, RoNW is 32.41% and P/E is 115.53, 21.20 and 12.42 respectively as per FY24, FY25 and annualised FY26 earnings. So, issue looks fully priced. But sudden rise in net-profit, negative operating cash flow and higher trade receivables in 8M FY26 raises doubts. The company is a manufacturer of synthetic textile fabrics, specializing in products like Ikat fabrics, polyester garment fabrics, and saree fabrics, which is highly competitive business segment. Performance of BRLM is poor. So, we give AVOID rating for this IPO. Readers must consult a qualified financial advisor prior to making any actual investment decisions.
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