Shakti Polytarp IPO

GMP History

Strengths

• ✓The company claims to manufacture a wide range of tarpaulin products, including geotextile, lumber wrap, house wraps, pond liners, and green net. These products serve customers across the agriculture, construction, automotive, transportation & logistics, and consumer goods industries, with facilities to develop products based on customer requirements.
• ✓The company claims to undertake its manufacturing operations at its facility in Nirmani, Khargone, Madhya Pradesh, equipped to develop and manufacture its product portfolio. Its in-house operations support inventory management and production processes, while quality controls are stated to ensure adherence to applicable quality standards.
• ✓The company claims to have established relationships with domestic clients from whom it receives regular orders. It states that understanding customer needs and preferences helps maintain these relationships, while continued product improvements and expansion into existing and emerging markets support efforts to develop its customer base.
• ✓The company has seen a consistent increase in revenue from operations and PAT. Revenue from operations increased from Rs 62.01 crore in FY24 to Rs 166.23 crore in FY25 to Rs 215.65 crore in FY26, while PAT increased from Rs 0.98 crore in FY24 to Rs 4.97 crore in FY25 to Rs 10.06 crore in FY26.

Risks

• !The company’s revenues are substantially dependent on tarpaulin manufacturing and granule trading. Revenue from all types of tarpaulin was Rs 99.82 crore (46.29%) in FY26, Rs 52.92 crore (31.84%) in FY25, and Rs 37.31 crore (60.17%) in FY24. Revenue from the sale of granules was Rs 104.01 crore (48.25%), Rs 100.09 crore (60.21%), and Rs 10.94 crore (17.65%), respectively. Any decline in demand, changes in customer preferences, or inability to retain or attract customers may adversely affect its business and financial performance.
• !The company has experienced underutilisation of its manufacturing capacity in earlier periods. In FY24, installed capacity was 4,200 MTPA against actual production of 2,715 MTPA, resulting in 64.64% utilisation. In FY25, capacity increased to 6,900 MTPA with production of 4,151.60 MTPA and 60.17% utilisation. In FY26, installed capacity further increased to 12,900 MTPA, while actual production was 6,277 MTPA, resulting in 48.66% annualised utilisation. It is important for the company to maximise capacity utilisation to maximise revenue and profits.
• !The company is dependent on a limited number of customers for a significant portion of its revenues. Revenue from its top 10 customers was Rs 167.90 crore (77.86%) of revenue from operations in FY26, Rs 137.45 crore (82.69%) in FY25, and Rs 37.56 crore (60.57%) in FY24. Loss of a major customer or reduction in demand could adversely affect its business, financial condition, and results of operations.
• !The company procures raw materials from various suppliers, with its top 10 suppliers accounting for Rs 177.02 crore (90.61%) of purchases of materials and traded goods in FY26, Rs 136.42 crore (93.44%) in FY25 and Rs 36.36 crore (68.87%) in FY24. Any dispute, disruption, or loss of business with one or more major suppliers may adversely affect the company’s business operations.
• !The company derives a significant portion of its revenues from Madhya Pradesh. Revenue from the state amounted to Rs 197.91 crore (91.77%) in FY26, Rs 158.51 crore (95.35%) in FY25, and Rs 59.07 crore (95.26%) in FY24. Any political, geographical, or economic developments, increased competition, natural disasters, or changes in demand in the state may adversely affect the company’s revenues and profitability.
• !The company faces competition from existing and potential competitors in India, including larger and established players with greater brand recognition, operating history, financial resources, product development, and marketing capabilities. Competitors may offer lower prices, wider product ranges, or enter strategic arrangements to gain market share, which could reduce demand for the company’s products, selling prices, operating margins, profits, and revenue.
• !The company’s group entities are involved in ongoing tax proceedings. Any adverse rulings in any of these cases could be detrimental to the company’s business prospects.
• !The company has positive cash flow from operating activities in FY26 but, the company reported negative cash flows from operating activities of Rs 10.78 crore in FY25 and Rs 2.05 crore in FY24. In FY25, the negative operating cash flow was mainly attributable to increases in inventories, trade receivables, and short-term loans and advances. In FY24, it was primarily due to an increase in trade receivables and a decrease in trade payables. It reported negative cash flows from investing activities of Rs 36.85 crore in FY26, Rs 9.39 crore in FY25, and Rs 5.25 crore in FY24, primarily due to capital expenditure on property, plant, and equipment and investment in capital work-in-progress. While this expenditure on creating assets can potentially bring more revenues and profits, this needs to be monitored. Sustained negative cash flows or significant investing outflows could put pressure on the company’s liquidity and financial flexibility.
• !As of FY26, the company’s trade receivables were Rs 8.35 crore. Any failure to collect these receivables on time or at all can negatively impact the business and its financial condition.
• !As of FY26, the company had outstanding financial indebtedness of Rs 72.11 crore. Any failure to service or repay these loans can harm the company’s operations and financial position.

About Shakti Polytarp

Shakti Polytarp is a manufacturer of tarpaulin and water-resistant materials used for protecting goods, equipment, and other products from rain, moisture, and weather-related exposure. Its tarpaulins are manufactured using PP granules, LLDPE, LDPE, and HDPE and are available in different sizes, colours, specifications and thicknesses ranging from 70 GSM to 450 GSM. The company specialises in manufacturing six-layer and eight-layer tarpaulins and sells its products under the brand name Dinotarp. Its manufacturing unit is located at Nimrani, Khargone, Madhya Pradesh, and spans approximately 198,450 sq. ft. The facility is equipped with an extrusion tape line, extrusion lamination, circular looms, sealing machines, and recycling machines. Products undergo examination, testing, and evaluation for compliance with customer specifications and industry standards. The company also sells granules used as raw materials in tarpaulin manufacturing. It primarily operates on a B2B model, supplying products to businesses across industries, while also catering to B2C customers.