Riyaasat Lifestyle files DRHP for SME IPO to fund expansion
Riyaasat Lifestyle Limited has filed its Draft Red Herring Prospectus (DRHP) for an SME IPO to raise ₹21.97 crore. The proceeds will fund the establishment of four new showrooms in Mumbai, Surat, Hyderabad, and Bengaluru, and meet working capital needs. The company reported a PAT of ₹4.87 crore in FY2025, with revenue from operations reaching ₹27.87 crore in the 10-month period ended January 2026. However, investors should consider risks such as geographic revenue concentration in Western India and negative operating cash flows.
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Riyaasat Lifestyle Limited has filed its Draft Red Herring Prospectus (DRHP) for an SME IPO to fund geographic expansion and working capital requirements. The Ahmedabad-based ethnic wear company, incorporated in 2021, aims to utilize the net proceeds to establish four new showrooms in Mumbai, Surat, Hyderabad, and Bengaluru, thereby diversifying its revenue concentration beyond Western India. The IPO is scheduled to open on June 18, 2026, and close on June 22, 2026.
Financial Performance
The company has demonstrated consistent revenue growth since its inception. Revenue from operations increased from ₹20.93 Cr in FY2023 to ₹27.87 Cr in the 10-month period ended January 2026. Profitability has also improved significantly, with Profit After Tax (PAT) rising from ₹1.32 Cr in FY2023 to ₹4.87 Cr in FY2025. For the 10 months ended January 2026, the company reported a PAT of ₹4.29 Cr and a PAT margin of 15.25%.
| Period | Revenue from Operations (₹ Cr) | Total Revenue (₹ Cr) | PAT (₹ Cr) | PAT Margin (%) |
|---|---|---|---|---|
| FY2023 | 20.93 | 20.94 | 1.32 | 6.30% |
| FY2024 | 22.88 | 23.34 | 4.08 | 17.49% |
| FY2025 | 24.80 | 25.19 | 4.87 | 19.33% |
| 10M FY2026 | 27.87 | 28.13 | 4.29 | 15.25% |
Objects of the Issue
The company plans to deploy the IPO proceeds towards specific growth-oriented objectives. A total of ₹12.47 Cr is allocated for capital expenditure to set up the new showrooms. Additionally, ₹9.50 Cr is earmarked for working capital requirements to support inventory management and operational costs. A portion of the funds will also be utilized for general corporate purposes.
| Purpose | Amount (₹ Cr) |
|---|---|
| Setting up 4 new Stores | 12.47 |
| Working Capital Requirements | 9.50 |
| General Corporate Purpose | Not Specified |
Risk Factors
Investors should note several material risks disclosed in the filing. The company currently derives 100% of its revenue from Western India, with Gujarat alone contributing 67.13% of total revenue as of January 2026. This geographic concentration poses a risk if the company fails to replicate its success in new regions. Furthermore, the company reported negative cash flows from operating activities in three of the four reported periods, amounting to ₹272.60 lakhs for January 2026, primarily due to inventory build-up. The debt-to-equity ratio also increased sharply to 3.38x in the 10 months ended January 2026 from 1.59x in FY2025.
Business Overview
Riyaasat Lifestyle Limited operates through a multi-channel model comprising exclusive offline showrooms and an online presence. The company specializes in blending traditional Indian craftsmanship with contemporary design, offering products such as Sherwani, Kurta Pyjama, and Lehenga Choli. Men's ethnic wear contributes 60.18% of the company's revenue. The management team includes Gaurang Ramanbhai Galiya as Managing Director and Ramanbhai Nanubhai Galiya as Chief Executive Officer.
How will the company manage the increased working capital requirements and potential inventory risks associated with expanding into four new geographically diverse markets?
What strategies does Riyaasat Lifestyle plan to employ to successfully penetrate markets outside of Western India and reduce its current 100% revenue concentration in that region?
Will the IPO proceeds be sufficient to lower the sharply increased debt-to-equity ratio of 3.38x, or will further leverage be required to fund growth?
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