Aastha Spintex (Aastha) manufactures and trades carded, combed and compact combed cotton yarns and cotton bales.The company‘s cotton bales are utilized both for captive production of cotton yarns and for supply to other spinning units and the cotton yarns produced are used in both knitting and weaving applications, catering to a wide spectrum of end-use segments and products, including denim, terry towels, shirting, sheeting, sweaters, socks, bottom wear, home textiles, and industrial fabrics.

The company produces 100% cotton yarns in counts ranging from Ne 26 to Ne 40 which includes carded, combed and combed compact varieties.The company has a semi-automated and integrated spinning and ginning manufacturing facility situated at Halvad, Morbi, Gujaratand spans a built-up area of approximately 30,397.11 sq. m. It has a spindle count capacity of 25,920 spindles through 15 compact ring spinning machines and an annual 12,000 tonne production capacity of cotton bales through 28 ginning machines.

Aastha operates exclusively in the business-to-business (B2B) segment, supplying its products to buyers such astextile manufacturers, yarn exporters, bulk purchasers and fabric processors. Its exclusive B2B focus allows the company to streamline its production and supply chain processes around the needs of its buyers, ensuring consistent quality, delivery, and efficient order fulfilment. It also allows the company to build long-termclient relationships and offer customized yarn solutions tailored to specific technical parameters including count,twist, and strength.

Aastha has entered into a share purchase agreement with Falcon Yarns Private

Limited (Falcon) and its promoters for the acquisition of 100% equity shareholdingof Falcon at a consideration of Rs 111.50 crore. Falcon is engaged in the manufacturing of carded, combed and combed compact cotton yarn andoperates a manufacturing facility at Rajkot, Gujarat, with an annual installed production capacity of 9,757 tonnes. Post completion of thisacquisition, Aastha’s total spinning capacity is expected to increase from 7,700 tpato 17,457 tpa.Falcon recorded revenue from operations of Rs 249.44 crore, Rs 220.35 crore and Rs 228.75 crore in thelast three financial years.

Object of the offer

The IPO is entirely a fresh issue of shares worth Rs 170 crore at upper price band of Rs 136. There is no offer for sale (OFS) component. At the upper end of the price band, the company is expected to be valued at Rs 600.33 crore post listing.

The funds raised to the tune of Rs 111.5 crore will be used towards part payment of the purchase consideration for the acquisition of Falcon Yarns Private Limited, Rs 10.0 crore will be utilised towards funding working capital requirements of Falcon Yarns Private Limited and the balance towards general corporate purposes.

Strengths

Long standing relationship with key customers. The company has around 14 customers who are associated with company for more than 5 years. Repeat customers contributed around 47.6% of the total revenue in the nine months ended December 31,2025.

The manufacturing facility is strategically located at Halvad, District Morbi, Gujarat, inone of the state’s major cotton-growing regions, providing direct access to a well-established network of rawmaterial suppliers, logistics providers, and skilled labor. This geographic advantage streamlinesprocurement, production scheduling, and delivery timelines. Additionally, close proximity to local ginningand spinning units ensures a steady supply of raw cotton, enhancing operational flexibility and raw materialmanagement.

Renewable energy infrastructure enabling sustainable and cost-efficient manufacturing. The company has successfully commissioned and operate a 1 MW rooftop solar power unit, a 4 MW ground-mounted solar power plant, and a 2.7 MW wind power plant. These facilities collectively power a significant portion of the manufacturing operations and meet around80 % of total power requirement of the plant, allowing the company to meet the majority of its captive energy requirements through clean, renewable sources.

The company is run by professionally qualified and experienced promoters and management. Promoters Divyang Jashwantbhai Patel, Vivek Rasiklal Gothi, JashvantValjibhai Patel and Rasiklal Valjibhai Patel play a key role in the development and growth of the company’s business.

Weaknesses

The operations are dependent on a single manufacturing facility and are critical to its business, and any disruption could materially impact the operations.

The ginning operations are seasonal, running mainly from October to March, which can create production variability, inventory management challenges, and dependence on working capital. Seasonal procurement and storage of cotton bales also expose the business to price fluctuations, quality variations, and limited in-house consumption, with surplus bales sold in the market.

The company has, in the past, not complied with the requirements of Section 138 of the Companies Act, 2013 relating to the appointment of an internal auditor, which may expose it to regulatory actions. During the FY 2022 to 2024, the company did not appoint an internal auditor as required under Section 138 of the Companies Act, 2013.

The Indian textile industry is highly fragmented and competitive marked by presence of large number of organized and unorganized players. This restricts the pricing flexibility and bargaining power with its customers.

The operating margins fluctuate due to the volatility in pricing of raw materials.

The operations are working capital intensive, with high inventory and receivable days.

Had negative cash flows in the past.

Valuation

Net profit stood at Rs 17.56 crore on net sales of Rs 313.29 crore in the nine months ended December 2025.

Consolidated sales were up by 15.2% to Rs 351.16 crore in Fiscal2025. Operating profit margin (OPM) expanded from 12.20% to 14.20%, leading to a 34.0% increase in operating profit to Rs 49.86 crore. Other income inclined 24.9% to Rs 1.01 crore. Interest cost inclined 2.1% to Rs 10.73 crore and depreciationcost inclined by28.4% to Rs 8.05crore. PBT stood at Rs 32.09crore,up 51.2%.PAT stood at Rs 22.92 crore as against Rs 16.29 crore in FY2024.

In March 2025, the company allotted 2173670 equity shares to various investors on preferential basis at a price of Rs 82.50 per equity share.

At the higher price band of Rs 136, the offer is made at a P/E of 26.2 times FY2025EPS (of Rs 5.2).

Listed industry peers are Ambika Cotton, Lagnam Spintex, Pashupati Cotspin,Rajapalyam Mills, Nitin Spinners and Nahar Spinning Mills. Ambika Cotton trades at 13.4 times its P/ FY2026 EPS, Lagnam Spintextrades at 10.0 times its P/FY2026EPS, Pashupati Cotspin trades at134 times its P/FY2026 EPS, Rajapalyam Mills trades at 6.8 times its P/FY2026 EPS, Nitin Spinners trades at 17.6 times its P/FY2026 EPS, Nahar Spinning Mills trades at 42.2 times its P/FY2026 EPS.