SKFL – Crafting a legacy in technical textiles

SME IPO – Shree Karni Fabcom LTD (SKFL)

SKFL – Crafting a legacy in technical textiles

SKFL manufactures technical textiles for diverse industries, such as luggage, medical arch support, chairs, shoes, and apparel.

Before going more in-depth about the Company, Let’s Understand

What are technical textiles?

- Technical textiles are defined as high-performance textile products, materials, and fibres used for their functionality rather than their aesthetic qualities.

- Technical textiles have varied applications in several vital industries, including aerospace, packaging, hazard protection, shipping, sports, agriculture, defence, healthcare, and construction.

- It offers significant improvements in performance, efficiency, resource utilization, cost reduction, environmental protection, and cost-effectiveness.

- This is the fastest-growing subsegment used in an array of sectors. Their end-use applications are widespread and include industries such as agriculture, construction, sports apparel, healthcare, etc.

Technical textiles account for ~13% of India’s total textile and apparel market. The current estimated size of technical textiles is US $19 Bn, and the domestic market is expected to grow by 15-20%.

About SKFL

The company produces specialized technical textiles tailored to various industries, including luggage accessories, backpacks, apparel, footwear, upholstery, medical support, and other lifestyle and industrial applications.

The company’s expertise lies in converting yarn into fabric through knitting processes. It has outsourced weaving, coating, sizing, and embossing to its subsidiary, IGK Technical Textile LLP.

The company operates under a B2B model, engaging with institutional manufacturers and traders across different states in India.

Product Portfolio & its Applications

Installed Capacity & Utilization

Client List

Growing and increasing margin & stable return ratios

High D/E ratio, but interest cost is manageable

Of the total debt amounting to Rs. 95 crore, the working capital loan from the bank stands at Rs. 30 crore, with an interest rate of 9%. However, the company receives a 6% interest subsidy, resulting in an effective interest rate of 3%. Additionally, approximately Rs. 25 crore comprises interest-free loans provided by the promoters.

About Issue

The Company is raising Rs. 42.5 Cr, of which Rs. 30 Cr will be utilized for a new dyeing unit, Rs. ~2 Cr for new bag manufacturing, Rs. 5 Cr for WC and the rest for general and issue expenses.