Dudani Retail Limited, a Jaipur-based multi-channel apparel company, has filed its Draft Red Herring Prospectus for an SME IPO involving a ₹9.26 crore fresh issue. The company, promoted by Mr. Akshay Dudani and Mrs. Charu Dudani, operates through own brands, licensed manufacturing, and quick-commerce supply arrangements.

About the Company

Incorporated in 2015, Dudani Retail Limited designs, manufactures, sources, and supplies apparel through a multi-vertical business model. The company operates four distinct verticals: own-brand operations featuring Divena (women's ethnic wear) and Millennial Men (men's shirts); licensed manufacturing for Fashion & Lifestyle Marketplaces; a sell-or-return supply arrangement with a Quick-Commerce platform; and asset-light trading of men's wear.

The company maintains an in-house manufacturing facility in Jaipur for women's wear, handling cutting, stitching, finishing, and quality checks, while outsourcing dyeing, printing, and embroidery to third-party processors. Its products are distributed across major e-commerce platforms including Myntra, Amazon, Flipkart, Ajio, Nykaa Fashion, Tata Cliq, and Snapdeal, as well as through its own brand websites.

Financial Performance

The company’s financials reflect consistent profitability despite marginal revenue fluctuations. Revenue from operations stood at ₹24.59 crore in FY2026, a slight decline from ₹25.28 crore in FY2025. However, expense management drove profitability improvements, with Profit After Tax (PAT) rising to ₹1.90 crore in FY2026 from ₹1.78 crore in the previous year.

EBITDA margin for FY2026 was recorded at 12.07%, while the PAT margin improved to approximately 7.73%. Notably, operating cash flows remained negative in FY2025 (-₹0.16 crore) and FY2026 (-₹0.46 crore), indicating significant working capital consumption despite reported profits.

Why the Company Is Raising Funds

The entire ₹9.26 crore fresh issue is designated for specific corporate purposes:

• Working Capital Requirements: ₹3.97 crore (42.88%) to meet operational needs, support inventory levels, and enhance procurement capabilities.
• Repayment of Outstanding Borrowings: ₹3.00 crore (32.39%) to repay or pre-pay cash credit facilities availed from Kotak Mahindra Bank Limited, aiming to reduce interest costs and improve the debt-equity ratio.
• General Corporate Purposes: ₹1.50 crore (16.20%) for strategic initiatives, brand building, marketing, and other general exigencies.
• Capital Expenditure: ₹0.79 crore (8.53%) for purchasing computerised embroidery machinery to bring embroidery operations in-house, thereby reducing dependency on third-party processors.

Business Strengths

The company leverages several competitive advantages disclosed in the DRHP:

• Multi-Vertical Model: Operations span own-brand manufacturing, licensed manufacturing for labels like Kalini and Corsica, and quick-commerce supply, providing diverse revenue streams.
• Established Marketplace Relationships: Strong ties with Fashion & Lifestyle Marketplace companies ensure recurring manufacturing assignments on a just-in-time basis.
• Asset-Light Trading: The men's wear segment operates entirely as trading activity, avoiding heavy capital expenditure on manufacturing infrastructure.
• Integrated Workflow: Processes cover design development, fabric sourcing, sampling, manufacturing, and dispatch, supported by in-house teams for quality control and e-commerce operations.
• Supplier Network: An established network across Jaipur and other textile hubs supports raw material availability, though top 10 suppliers account for 87.25% of total purchases.

Key Risks

Several material risks are associated with the company’s operations and financials:

• Negative Operating Cash Flows: The company reported negative cash flows from operations in FY2025 and FY2026, signaling potential liquidity pressures if working capital requirements are not managed effectively.
• Platform Dependency: A significant portion of revenue is derived from a few major e-commerce platforms and licensed manufacturing arrangements. Changes in platform policies or termination of agreements could materially impact revenues.
• Supplier Concentration: With top 10 suppliers accounting for 87.25% of total purchases, any disruption in supply from key vendors could affect production schedules.
• Sell-or-Return Risk: Under the Quick-Commerce arrangement, unsold inventory returned by the platform could adversely affect working capital and profitability.
• Small Scale of Operations: With total assets of ₹17.01 crore, the company remains a small-scale operator, which may constrain its ability to compete with larger, better-capitalized peers.

Important IPO Dates

• IPO Opening Date: 25-Sep-2026
• IPO Closing Date: 29-Sep-2026
• Allotment Date: 30-Sep-2026
• Listing Date: 05-Oct-2026

Offer Details

• Issue Type: IPO (SME)
• Fresh Issue Size: ₹9.26 Crore
• Offer for Sale: Not Available
• Price Band: Not Available
• Lot Size: Not Available

Bottom Line

Dudani Retail Limited presents a profile of a profitable, multi-channel apparel player with improving margins but facing working capital constraints evidenced by negative operating cash flows. The ₹9.26 crore fresh issue aims to strengthen the balance sheet by repaying debt and funding working capital, while capital expenditure on machinery seeks to reduce outsourcing dependencies. The company’s reliance on specific e-commerce platforms and supplier concentration remain key risks alongside its small scale of operations.