Game Changer BSE SME IPO review

•    The company is engaged in sourcing all kind of fabrics for its customers from third parties.
•    It does not have its own manufacturing unit and thus operating on an asset light model.
•    The issue appears fully priced based on its highly inflated earnings from FY24 onwards.
•    It is operating in a highly competitive and fragmented segment.
•    Only cash surplus/risk seeker/well-informed investors may park moderate funds for short term.

ABOUT COMPANY:
Game Changers Texfab Ltd. (GCTL) is engaged in finding the finest fabric material as per customer specifications and sourcing them from the right suppliers, ensuring the right material solutions. ‘Sourcing of Fabrics’ refers to the process of selecting and procuring raw materials for textile production, which includes identifying suppliers, negotiating prices, and ensuring the quality and sustainability of the fabrics. The company deals with variety of fabrics but specializes in women's wear fabrics and technical textiles fabrics, including outdoor and PVC-coated fabrics for a variety of uses such as awnings, outdoor furniture upholstery, tarpaulins, sports goods, tents, etc.

To strengthen its sourcing operations, it manages a network of over 10 sourcing offices, ensuring access to a range of daily as wells as premium fabrics at competitive prices. It has two comprehensive retail experience stores which double up as sampling centres through which it offers a wide range of fabric materials. In these stores, the company features both Ready-made and semi-stitched garments. Additionally, it offers Made to Measure garments with in-store customization and fabric value additions tailored to meet customers' specific preferences. Apart from its offline presence, the company also has online platform, featuring over 10,000 designs and a network of 500+ diverse suppliers, to support export houses, boutiques in creating unique samples for clientele.

Also, in order to eliminate the need for capital-intensive machinery or owned production facilities, it operates through a Deemed Manufacturing model, wherein it has a network of six deemed manufacturing units. ‘Deemed Manufacturing Model’ refers to a business arrangement where it outsources manufacturing activities to a third-party manufacturer, without owning or operating any manufacturing facility. In this model, the third-party manufacturer is responsible for the production of goods on behalf of it. Operating on this model makes it asset light and gives the ability to be agile by on-boarding new production facilities based on changing needs and trends. This allows it to reduce the costs associated with owning and managing manufacturing facilities, while still benefiting from the production capacity and expertise of the manufacturer to scale operations without investing in costly infrastructure.

This dual approach of ‘Right Sourcing’ and ‘Deemed Manufacturing’ enables the company to provide the customers with “what they need”, rather than simply selling “what it has”. This customer-centric strategy is a key differentiator for the company.

It has two brands under its name, “TradeUNO” and “Fall in Love”. TradeUNO was established in 2015, offering a diverse range of premium fabrics to businesses as well as retail customers. The name "TradeUNO" perfectly reflects the vision and mission behind premium fabric and garment brand. "Trade" represents its commitment to global reach, focus on building strong connections within the textile industry, emphasizing the seamless flow of premium fabrics across markets. "UNO" meaning "one" in Italian, was carefully selected to symbolize its aspiration to be the singular, go-to brand for fabrics that combine aesthetic beauty with exceptional performance.

Currently, it operates two fabric stores ranging from 4,000 to 10,000 sq. ft., offering a wide selection of fabric designs & patterns, an experience centre, a sampling office, a dedicated tailoring and value-added service area, and an office space. As on June 30, 2025, it had the total strength of 23 employees in various departments other than Directors of the Company. Also, for stitching and other purposes it employs workers purely on contractual basis. 

ISSUE DETAILS/CAPITAL HISTORY:
The company is coming out with its maiden book building route IPO of 5376000 equity shares of Rs. 10 each to mobilize Rs. 54.84 cr. IPO opens for subscription on October 28, 2025, and will close on October 30, 2025. The company has announced a price band of Rs. 96 – Rs. 102 per share. The minimum application to be made is for 2400 shares and in multiple of 1200 shares thereon, thereafter. Post allotment, shares will be listed on BSE SME. The issue constitutes 30.05% of post-IPO paid-up equity capital of the company. From the net proceeds of the issue, the company will utilize Rs. 25.50 cr. for working capital, Rs. 15.00 cr. for capex requirements, and the rest for general corporate purposes.

The IPO is solely lead managed by Corpwis Advisors Pvt. Ltd., while Skyline Financial Services Pvt. Ltd. is the registrar to the issue. NNM Securities Pvt. Ltd. is the market maker. The IPO is underwritten to the tune of 15% by Corpwis Advisors and 85% by NNM Securities.

The company has issued initial equity shares at par value, and issued further equity shares at a fixed price in the range of Rs. 5200 – Rs. 18050 per share between December 2017 – July 2022, also issued bonus shares in the ratio of 400 for 1 in January 2025. The average cost of acquisition of shares by the promoters is Rs. 0.02, Rs. 2.46, and Rs. 45.01 per share. 

Post-IPO, company’s current paid-up equity capital of Rs. 12.52 cr. will stand enhanced to Rs. 17.89 cr. Based on the upper price band of the IPO, the company is looking for a market cap of Rs. 182.51 cr. 

FINANCIAL PERFORMANCE:
On the financial performance front, for the last three fiscals, the company has posted a total income/net profit, of Rs. 100.58 cr. / Rs. 0.53 cr. (FY23), Rs. 97.86 cr. / Rs. 4.27 cr. (FY24), Rs. 115.59 cr. / Rs. 12.07 cr. (FY25). For Q1 of FY26 ended on June 30, 2025, it earned a net profit of Rs. 4.27 cr. on a total income of Rs. 24.11 cr. Thus, in a pre-IPO year, from FY24 onwards, it posted inflated financial data which is perhaps for fetching fancy valuations.

For the last three fiscals, the company has reported an average EPS of Rs. 1.86, and an average RoNW of 63.39%. The issue is priced at a P/BV of 5.05 based on its NAV of Rs. 20.19 as of June 30, 2025, but its post-IPO NAV data is missing from the offer documents.  

If we attribute its FY26 super annualized earnings on post-IPO expanded equity base, then the asking price is at a P/E of 10.69, and based on its FY25 earnings, the P/E stands at 15.13. Thus, with the inflated earnings from FY24 onwards, the issue appears fully priced. The sustainability of such margins going forward is a major concern, as it is operating in a highly competitive and fragmented segment.

The company has posted PAT margins of 0.52% (FY23), 4.36% (FY24), 10.44% (FY25), 17.70% (Q1-FY26), and RoCE Margins of 11.01%, 44.39%, 65.97%, 16.35%, respectively for the referred periods. 

DIVIDEND POLICY:
The company has not declared any dividends for the reported periods of the offer document. It has adopted a dividend policy in December 2024, based on its financial performances and future prospects.

COMPARISON WITH LISTED PEERS:
As per the offer document, the company has shown TT Ltd., and Bhandari Hosiery as its listed peers. They are currently trading at a P/E of NA, and 14.8 (as of October 24, 2025). However, they are not truly comparable on an apple-to-apple basis.

MERCHANT BANKER’S TRACK RECORDS:
This is the 7th mandate from Corpwis Advisors in the last two fiscals, out of the last 6 listings, 2 opened at discount, 1 at par, and the rest with premium ranging from 0.13% to 10.53% on the listing date. The LM has an average track record.