Phoenix Overseas Ltd. IPO

Harikanta Overseas

• Harikanta Overseas is coming out with an initial public offering (IPO) of 26,70,000 shares in a price band of Rs 91- 96 per equity share.
• The issue will open on May 20, 2026 and will close on May 22, 2026.
• The shares will be listed on SME Platform of BSE.
• The face value of the share is Rs 10 and is priced 9.10 times of its face value on the lower side and 9.60 times on the higher side.
• Book running lead manager to the issue is Interactive Financial Services.
• Compliance Officer for the issue is Swati Malu.

Profile of the company

Harikanta Overseas is engaged in the manufacturing of Synthetic textile fabrics. Its product portfolio includes Ikat fabrics, polyester garment fabrics, saree fabrics, dhupion fabrics, poly linen, and natural fiber. It primarily caters fabric to women’s wear, producing fabrics for sarees, dress materials, and kurtas, while also offering fabrics for men’s kurtas. Although its fabrics have multiple end uses, the majority of them are utilized in the manufacturing of different types of sarees.

With the objective of broadening business horizons and accessing international markets, the Promoters incorporated the company on October 22, 2018. This marked a milestone in their entrepreneurial journey, creating a platform for global trade. The company commenced exports of products such as Ikat fabrics and Dhupion fabrics, which not only reinforced its market presence but also expanded its customer base beyond India. 

This step diversified the group’s business portfolio and placed it on a path of growth with an emphasis on global expansion. With the objective of supplying products to overseas customers, it has set up a manufacturing unit at Surat, Gujarat. Its current manufacturing facility is spread across 953.93 sq. mtrs. at Sai Ram Industrial Estate-2, Bamroli Gam, Bamroli, Surat, Gujarat. 

Proceed is being used for:

• Capital expenditure for factory premises  
• Capital expenditure for plant and machineries   
• Working capital  
• General corporate purposes 

Industry Overview

India’s textiles sector is one of the oldest industries in the Indian economy, dating back to several centuries. The industry is extremely varied, with hand-spun and hand-woven textiles sectors at one end of the spectrum, with the capital-intensive sophisticated mills sector at the other end. The fundamental strength of the textile industry in India is its strong production base of a wide range of fibre/yarns from natural fibres like cotton, jute, silk, and wool, to synthetic/man-made fibres like polyester, viscose, nylon and acrylic. The decentralised power looms/ hosiery and knitting sector form the largest component of the textiles sector. The close linkage of textiles industry to agriculture (for raw materials such as cotton) and the ancient culture and traditions of the country in terms of textiles makes it unique in comparison to other industries in the country. India’s textiles industry has a capacity to produce a wide variety of products suitable for different market segments, both within India and across the world.

The Indian Textile and Apparel Industry is valued at over $100 billion, employing over 45 million people and accounting for 14% of the country's industrial production. India is a global leader in producing several textile products, such as being the second biggest producer of silk, cotton and Multimode Fibre (MMF). It is also a world leader in jute production, accounting for nearly 70% of global production. Additionally, based on capacity, the country has the second largest vertically integrated production base after China. This leadership position gives the country significant advantages, such as manufacturing strength across the value chain and a huge raw material base. The value chain includes weaving, spinning, garmenting and processing.

The Textile Ministry’s allocation increases by 19%, rising from Rs 4,417.03 crore ($512 million) in 2024-25 to Rs 5,272 crore ($611 million) in 2025-26, reflecting the government’s commitment to addressing long-standing challenges and unlocking new growth opportunities. A five-year Cotton Mission is launched with an allocation of Rs 600 crore ($69.6 million) to boost extra-long staple (ELS) cotton productivity through science and technology support. The initiative promotes global agronomy best practices and clean cotton production to secure a steady raw material supply, reduce imports, enhance competitiveness, and improve farmer incomes. Two types of shuttles-less looms - Rapier looms (below 650 m/min) and Air Jet looms (below 1,000 m/min) - are fully exempted from customs duty (reduced from 7.5% to nil) to lower production costs and modernize technical textiles.

Pros and strengths

Efficient production process: Its production processes form a key part of its operations and contribute to profitability and the ability to timely meet customer requirements. The processes cover all stages of manufacturing, starting from the procurement of raw materials to the production of finished fabrics. This includes planning and scheduling of production, allocation and management of resources, machine operation, and monitoring of output at each stage. Workflow management ensures that production tasks are carried out efficiently, while quality checks at defined stages maintain product consistency. It also monitors delivery schedules to ensure timely dispatch of products to customers. These processes enable it to manage pricing, maintain product standards, and meet delivery commitments, which support customer retention and help sustain its position in the market.

Global reach and export capability: The company exports its products to markets in Thailand, Bahrain, Singapore and Cambodia, with its primary export product being Ikat fabrics. In FY25, revenue from exports, including merchant exports, accounted for 64.04% of its total operating revenue. These international markets provide it with opportunities for expansion and grow its sales. As its presence is already in different regions, it reduces its reliance on single regional market and helps it in diversifying its business. This global reach ensures that the company can grow and seize opportunities in various economic climates.

Customization and flexibility: Its capability of customization and flexibility is one of the competitive strengths that differentiate it from its competitors. As consumer demand evolves, the ability to adapt and provide tailor-made solutions is crucial for meeting diverse customer needs. It excels in offering customized fabrics and flexible production options to its customers which help it build strong relationships with clients, command higher price points, and position itself as a partner to its customers. Its flexible production systems help it in handling turnarounds efficiently by streamlining workflows, using advanced machinery, and employing skilled labor. This agility enables it to serve both high-volume clients and those who require smaller, more specialized orders, thus broadening its market reach.

Risks and concerns

Dependence on repeat orders and customer relationships: The company does not have long-term contracts or binding agreements with its major customers. It primarily operates on the basis of purchase orders, and a substantial part of its business comes from repeat orders and long-standing customer relationships. While this has provided stability in the past, it also exposes it to certain risks. Any change in the buying pattern of its end users, reduction in order volumes, delay in placing orders, or disassociation by a major customer (or multiple significant customers) could adversely impact its revenues and cash flows. If it is unable to secure new orders on a consistent basis, its operations and profitability may be materially affected.

Significant dependence on yarn and other related raw materials: Yarn, including Air Tex Yarn, Texturized Poly Yarn, TPM Poly Yarn, and other related materials, constitutes a significant portion of its total operating costs. The prices and availability of these raw materials are subject to fluctuations caused by factors beyond its control, such as demand-supply imbalances, seasonal variations, changes in government policies relating to the textile sector, imposition or revision of duties, tariffs or levies, foreign exchange fluctuations, and general economic conditions. Any significant increase in the cost of yarn or other inputs, without a commensurate increase in the selling price of its products, may adversely impact its margins and overall profitability. Its supplier base is relatively concentrated. For the period ended November 30, 2025 and for the financial year ended March 31, 2025, March 31, 2024 and March 31, 2023, its top ten suppliers accounted for around 58.88%, 56.24%, 100.00% and 100.00% of total purchases. This level of concentration exposes it to procurement risks. Any disruption in supply from these key vendors, whether due to financial stress, insolvency, logistical bottlenecks, adverse weather conditions, or regulatory actions, may significantly affect its ability to maintain production schedules and meet customer demand.

Fluctuations in revenue due to seasonal sales patterns: Its business is seasonal in nature, having sizeable sales volumes during festive seasons, weddings, and other cultural events. As a result, its revenue and cash flows are often showing the good performance in certain months of the year, which could lead to fluctuations in its financial performance during different quarters. The demand for traditional Indian wear fabrics Ikat fabrics, polyester garment fabrics, saree fabrics, dhupion fabrics, poly linen, and natural fiber fabrics tends to increase significantly during festive seasons and wedding seasons in India and other markets with a large Indian diaspora. It primarily caters to women’s wear, producing fabrics for sarees, dress materials, and kurtas, while also offering fabrics for men’s kurtas. Although its fabrics have multiple end uses, the majority of them are utilized in the manufacturing of different types of sarees. However, during non-festive or off-peak periods, it may experience a slowdown in orders, leading to under-utilization of its manufacturing capacities, lower sales volumes, and reduced profitability in those periods. 

Outlook

Harikanta Overseas is engaged in the manufacturing of Synthetic textile fabrics. Its product portfolio includes Ikat fabrics, polyester garment fabrics, saree fabrics, dhupion fabrics, poly linen, and natural fiber. The company’s focus on high-quality fabrics drives customer loyalty, reinforces its market leadership, and underpins revenue growth. On the concern side, it is dependent on third party transportation service providers for delivery of raw materials from suppliers to it and delivery of finished products to its customers and business associates. Any failure on part of such transport service providers to meet their obligations could have a material adverse effect on its business, financial condition and results of operation. Further, its revenue from operations is dependent upon a limited number of customers and the loss of any of these customers or loss of revenue from any of these customers could have a material adverse effect on its business, financial condition, results of operations and cash flows.

The company is coming out with a maiden IPO of 26,70,000 equity shares of face value of Rs 10 each. The issue has been offered in a price band of Rs 91-96 per equity share. The aggregate size of the offer is around Rs 24.29 crore to Rs 25.63 crore based on lower and upper price band respectively. On performance front, the revenue from operations for FY25 stood at Rs 3,517.30 lakh whereas in FY24 it was Rs 1,111.22 lakh representing an increase of 216.53%. Moreover, profit after tax for the year ended March 31, 2025, stood at Rs 454.30 lakh and for the year ended March 31, 2024 it was Rs 81.98 lakh representing an increase of 454.20%.

The company intends to expand its product range and increase production capacity. In order to achieve this strategy, the company had acquired 74, Machines from the Proprietary concern of Promoters and that will help the company to avoid common purist. Going forward, it is exporting its products to Thailand, Bahrain, Singapore and Cambodia. It focuses on building long term relationships with its customers in domestic as well as international markets. Further, it plans to further reduce it manufacturing cost by developing strong relationships with suppliers, negotiating favorable contracts, and sourcing raw materials from cost-effective regions.