Vivekanand Cotspin Limited is set to enter the SME IPO market with its public issue from September 21, 2026. The company has filed its Draft Red Herring Prospectus, or DRHP, for the issue.
The Gujarat-based company works in the cotton and textile sector. Its business covers cotton ginning and yarn production. The company turns raw cotton into cotton bales and then uses cotton to produce yarn.
The IPO comes at a time when the company has reported a sharp rise in revenue. Vivekanand Cotspin reported revenue from operations of ₹408.01 crore in FY2026, compared with ₹290.47 crore in FY2025. However, its profit remains quite small compared with its sales.
What Does Vivekanand Cotspin Do?
Vivekanand Cotspin operates from a single facility at Rangpurda, Kadi, in Mahesana, Gujarat. The company has an integrated business model, which means it handles more than one part of the cotton process.
It has an annual capacity of about 4,551 MT for cotton yarn and 8,000 MT for cotton bales. Its products are sold in India as well as overseas markets.
The company exports to countries such as Bangladesh, China, Vietnam and South Africa. This gives it access to customers outside India, although overseas sales also expose the business to changes in global demand, currency rates and trade conditions.
Revenue Rose Sharply in FY2026
The most notable part of the company’s latest financial results is its revenue growth.
Revenue from operations stood at ₹408.01 crore in FY2026. This was much higher than ₹290.47 crore in FY2025. In FY2024, revenue from operations was ₹357.39 crore.
Total revenue stood at ₹409.32 crore in FY2026, against ₹290.94 crore in FY2025 and ₹358.02 crore in FY2024.
The numbers show that FY2026 was a strong year for sales after the fall seen in FY2025. However, higher sales did not result in a similar rise in profit.
Profit Remains Small
Vivekanand Cotspin reported a profit after tax, or PAT, of ₹3.69 crore in FY2026. In FY2025, PAT stood at ₹4.07 crore, while FY2024 PAT was ₹3.35 crore.
This is an important point for investors to understand. The company has a large revenue base, but its final profit is much smaller.
Based on FY2026 revenue from operations of ₹408.01 crore and PAT of ₹3.69 crore, the net profit margin is below 1%. Another financial data source reports the FY2026 PAT at ₹3.68 crore and the PAT margin at 0.90%.
This type of low margin means the company’s earnings can be affected by even small changes in cotton prices, production costs, power costs and selling prices.
Cash Flow Shows Improvement
The company’s operating cash flow showed a better picture in FY2026.
Operating cash flow stood at ₹8.67 crore in FY2026. This was a clear change from the negative operating cash flow of ₹10.79 crore in FY2025.
Total equity also rose to ₹28.94 crore in FY2026 from ₹17.26 crore in FY2025. Non-current liabilities fell to ₹17.78 crore from ₹34.53 crore during the same period.
These changes indicate better cash generation and a stronger equity position in FY2026. Still, the company’s balance sheet and cash needs remain important areas to watch because textile businesses often require substantial working capital.
Where Will the IPO Money Go?
The company plans to use the IPO proceeds mainly for machinery and working capital.
Around ₹5.27 crore is planned for capital expenditure. This money will go toward upgraded spinning machinery, including Comber Machines, Compact Spinning Systems and Link Corner or Autoconer Winding Systems.
Another ₹11 crore is planned for working capital needs. The company also plans to use a part of the funds for general corporate purposes, subject to the applicable limit under SEBI rules.
The proposed machinery upgrade is important because better equipment can help improve production quality, capacity and efficiency. The key question will be whether these upgrades can also help the company improve its profit margin over time.
IPO Dates and Issue Details
The Vivekanand Cotspin IPO is scheduled to open on September 21, 2026, and close on September 23, 2026. The reported allotment date is September 24, while the proposed listing date is September 28, 2026.
Current market sources report an issue size of ₹24.05 crore and a price band of ₹32 to ₹37 per share. The issue is reported as a fresh issue without an Offer for Sale. Investors should check the final RHP for the confirmed terms before applying, as IPO details can change between the DRHP and final offer document.
Customer Concentration Is a Major Risk
One important risk is the company’s dependence on a limited number of customers.
According to the DRHP-related details, the top 10 customers accounted for 51.18% of revenue in FY2026. In some periods, Ambica Cotseeds Limited contributed as much as 47.23% of revenue, while Vivekanand Industries contributed 23.13%.
Such dependence can create pressure if a major customer reduces orders, changes suppliers or faces its own business problems. A wider customer base would reduce this risk over time.
Cotton Prices Can Affect Profit
Vivekanand Cotspin operates in a commodity-based industry. Cotton is its main raw material, so changes in cotton prices can have a direct effect on costs.
If raw cotton prices rise faster than the company’s selling prices, its profit margin can come under pressure. This matters more for Vivekanand Cotspin because its net margin is already below 1%.
The company also depends on the availability of cotton. Any major change in supply, crop output or market prices can affect its operations and financial results.
Dependence on One Factory
Another risk is the company’s dependence on a single manufacturing facility in Gujarat.
When a business has one main production site, any major problem at that location can affect the whole operation. Equipment failure, fire, natural events, power problems or other disruptions could affect production and sales.
The company also has outstanding export obligations under the Advance Authorization Scheme. The DRHP-related information refers to a potential duty liability of ₹303.97 lakh. The company also has disclosed issues related to delays in GST returns and EPF payments.
Overall Picture
Vivekanand Cotspin enters the IPO market with a sharp rise in revenue and better operating cash flow in FY2026. Revenue from operations reached ₹408.01 crore, while operating cash flow stood at ₹8.67 crore.
At the same time, profit remains modest at ₹3.69 crore. The company also faces risks from customer concentration, cotton price changes, dependence on one manufacturing facility and certain regulatory matters.
The planned IPO funds are aimed at better machinery and higher working capital support. The success of this plan will depend on whether the company can use the new funds to improve production and, more importantly, turn its strong sales into better profits.
For investors, the key figures to watch after the IPO will be revenue growth, profit margin, cash flow, debt, customer concentration and the benefit from the new machinery. These factors will show whether the company’s higher sales can translate into stronger and more stable earnings.
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