Sham Foam’s initial public offering (IPO) opened for subscription today. As of the end of Day 1, the issue has been subscribed 0.02x overall. While the Qualified Institutional Buyers (QIB) and Non-Institutional Buyers (NII) categories show 0x subscription, the Retail category has seen a 0.03x subscription.

Subscription Status

The following table outlines the Day 1 subscription figures for Sham Foam:

About the Company

Sham Foam is launching its IPO with a price band set at ₹130. The company is seeking to raise capital through this public offering. The minimum bid quantity for the IPO is 2000 shares. Investors can apply within the issue size range of ₹260000 to ₹500000.

Offer Details

• Price Band: ₹130.00000 - ₹130.00000
• Issue Size: ₹260000 - ₹500000
• Min Bid Qty: 2000
• IPO Opens: Today

Sham Foam Limited, a Haryana-based vertically integrated manufacturer of polyurethane (PU) foam and home comfort products, has filed its Draft Red Herring Prospectus (DRHP) for an SME Initial Public Offering. The company plans to raise approximately ₹35.01 Crore through a fresh issue to fund capacity expansion and working capital requirements. With revenue growing from ₹73.73 Crore in FY2024 to ₹92.32 Crore in FY2026, Sham Foam aims to leverage its pan-India dealer network of over 1,300 dealers to scale operations further.

Company Overview

Sham Foam Limited is engaged in the manufacturing, distribution, marketing, and selling of PU foam, mattresses, and allied home comfort products. Incorporated in 2020, the company operates as a full-stack vertically integrated entity, controlling processes from product design to customer engagement. Its state-of-the-art manufacturing facility in Ambala City, Haryana, spans 2,04,460 sq. feet with an installed capacity of 15,000 TPA for foam production.

The company holds ISO 9001:2015 and BIS Certification (IS 7933:2022). It serves customers across 13 states through a robust dealer network. Key revenue-contributing states include Uttar Pradesh (27.34%), Punjab (21.13%), Haryana (12.98%), and Delhi (11.45%).

Offer Details

The SME IPO is structured as a fresh issue with no Offer for Sale (OFS). The total issue size is approximately ₹35.01 Crore. The price band is not yet available. The proceeds will be utilized for capital expenditure, working capital, and general corporate purposes.

Objects of the Issue

Financial Highlights

Sham Foam demonstrated strong financial performance over the last three years. Revenue from operations grew at a CAGR of approximately 11.90%, while net profit surged significantly in FY2026.

Risk Factors

Investors should note several material risks disclosed in the DRHP:

1. Outstanding Litigation: The company, promoters, and directors are involved in legal proceedings involving ₹536.42 Lakhs. Adverse outcomes could impact reputation and finances.
2. Raw Material Volatility: Raw material costs constituted 78.75% of revenue in FY2026. The top 10 suppliers account for 78.56% of purchases, creating supply concentration risk.
3. Leased Facility: The manufacturing unit is on a 30-year lease (August 2025 to July 2055). Non-renewal or unfavorable relocation terms could disrupt operations.
4. Customer Concentration: Top 10 customers contributed 25.06% of revenue in FY2026. There are no long-term agreements with these customers.
5. Negative Cash Flows: The company reported negative net cash flow of ₹1.05 Crore in FY2025, though it recovered to ₹5.39 Crore in FY2026.

Valuation & Peer Comparison

Specific peer comparison data and valuation multiples are not available in the DRHP. However, Sham Foam’s PAT margin expanded from 4.03% in FY2024 to 9.37% in FY2026, indicating improved operational efficiency. Investors will need to assess the valuation once the price band is disclosed, considering the post-issue equity base expansion from the ₹35.01 Crore infusion.

Bottom Line

Sham Foam Limited presents a growth story with strong revenue scaling and improving profitability metrics. The vertical integration and extensive dealer network provide competitive advantages. However, investors must weigh these against high raw material costs, litigation risks, and the company’s relatively short operating history since incorporation in 2020.