Saraswati Saree Eyes Men's Ethnic Wear Market Expansion Following IPO Triumph

Saraswati Saree Depot Ltd. plans to venture into men’s ethnic wear in a move to expand its product range, according to the company's Head of Investor Relations Nikhil Dulhani.

The focus will be on the lower price range initially, with ambitions to move into the mid and premium segments over time, Dulhani told NDTV Profit in an interaction after the company made its stock market debut.

Dulhani emphasised the company’s optimistic growth outlook. "Our IPO’s success and the growth trends from 2014 to 2023 reflect a robust expansion trajectory. We anticipate that the ethnic wear market will continue to boom" Dulhani said that the company can outpace industry growth, targeting an increase more than 5-6%.

Saraswati Saree made its stock market debut on Tuesday, with its shares listing at Rs 200 each, marking a 25% premium over the issue price of Rs 160 per share.

On the National Stock Exchange, the stock debuted at Rs 194 per share, reflecting a 21% premium, and swiftly reached the upper circuit limit. The IPO was oversubscribed of 107.52 times, largely driven by non-institutional investors.

Regarding recent performance, Dulhani shared, “In the fiscal 2024, we sold 1.6 crore sarees, up from 1.5 crore in the preceding financial year. Both years saw over Rs 6 crore in sales, and we expect continued improvement and growth.”

At present, Saraswati Saree Depot’s market presence is strong in the western and southern regions of India. "We believe there’s still significant untapped potential in these areas, with over 90% market presence in the west and south," Dulhani added. The company does not have immediate plans to expand into northern, eastern, or central markets, focusing instead on maximizing opportunities in existing regions.

Addressing competition from the unorganised sector, Dulhani explained, "The organised sector currently accounts for 25-30% of the market, and the unorganised sector hold around 70% market share"... "We expect the organised sector to grow, driven by GST implementation and other regulations that make it challenging for unorganised players."

Regarding Saraswati Saree Depot’s new foray into men’s ethnic wear, Dulhani elaborated, "We aim to start with low-range products and gradually introduce mid to premium ranges." Our existing customer base of over 13,000 unique clients for men's ethnic wear, who also purchase sarees, will be an asset in this new venture. While it’s early to predict specific revenue contributions or margin impacts, we anticipate significant growth in this segment, he said.