Saraswati Saree Depot IPO

Saraswati Saree Depot is a key player in the wholesale B2B saree segment. They have been in the business of saree sales since 1966. They are also engaged in the wholesale business of other women’s apparel wear, such as kurtis, dress materials, blouse pieces, lehengas, bottoms, etc. Overall, more than 90% of their total revenues are generated from the sale of sarees.

They regularly source sarees and other women’s apparel from more than 900 weavers/suppliers across different states in India. Currently, their product catalogue lists more than 3,00,000 different SKUs. In a market which is highly unorganised, an organised player with the aforementioned scale has an excellent opportunity for growth.

The company expects that the saree industry in India will grow at a 5-6% CAGR over fiscal 2023 to fiscal 2028, reaching ₹625-650 billion by fiscal 2028. This may benefit a major company like Saraswati Saree Depot in expanding its operations.

Saraswati Saree Depot IPO Strengths

• They have a highly diversified customer base. In Fiscals 2023 and 2022, their revenues from their top 10 customers represented 8.89% and 7.90%, respectively, of their total revenues.
• Their raw material sourcing is also highly diversified. In Fiscals 2023 and 2022, their purchases from their top 10 suppliers represented 22.83% and 26.98%, respectively, of their total purchases.
• The saree products offered at their stores are highly diversified in terms of occasion, fabric, weave, pattern and ornamentations. They also have a wide variety of non-saree apparel products.

Saraswati Saree Depot IPO Risks

• Their business is highly concentrated on the sale of women’s sarees. Any changes in consumer preferences could have a disruptive effect on the survival of the business.
• They operate out of two stores in Maharashtra, which are located at Kolhapur and Ulhasnagar. Any local social unrest, natural disaster or breakdown of services could have an adverse effect on their business and financial condition.
• Their business is subject to seasonality. Lower revenues in the peak season of any fiscal year may adversely affect their overall business for the year.