Roopa Screen’s IPO plan assumes 90-day receivables

Roopa Screen’s initial public offering (IPO) working-capital plan assumes trade receivables will be collected in 90 days in FY 2026-27 and FY 2027-28, after reaching 92 days in FY 2025-26. The assumption accompanies projected working-capital requirements of Rs 26.8276 crore by March 31, 2028, with most funding expected from internal accruals.

Why does Roopa Screen’s IPO plan assume 90-day receivables?

Roopa Screen’s IPO working-capital plan assumes customer credit will remain extended because projected receivable days decline only from 92 days in FY 2025-26 to 90 days in each of FY 2026-27 and FY 2027-28. Trade receivable days had increased from 72 in FY 2023-24 to 83 in FY 2024-25 and then 92 in FY 2025-26. The 90-day forecast therefore remains 18 days above the FY 2023-24 level.

Roopa Screen says the 90-day cycle reflects its policy of providing extended but controlled credit terms to support revenue growth, customer retention and competitive positioning. The company calculates debtor days, creditor days and inventory days using closing balances at the end of each financial year. The receivables forecast must therefore hold alongside the projected sales and closing trade-receivable balances used in its working-capital estimate.

Roopa Screen proposes to deploy Rs 4 crore of net IPO proceeds toward working capital in FY 2026-27 and Rs 2 crore for the period up to December 31, 2027. The company states that the Rs 2 crore amount is proposed to be used by the quarter ending December 2027. Bank working-capital facilities and internal accruals are intended to meet the balance of the requirement.

How much working capital does Roopa Screen project?

Roopa Screen projects working-capital requirements of Rs 17.6028 crore at March 31, 2027 and Rs 26.8276 crore at March 31, 2028, compared with Rs 14.9058 crore at March 31, 2026. Working capital is defined in the disclosure as total current assets less total current liabilities. The projected March 2028 requirement is Rs 9.2248 crore higher than the projected March 2027 amount.

Roopa Screen’s projected funding pattern changes materially between the two forecast periods. Internal accruals are projected to rise from Rs 8.9314 crore at March 31, 2027 to Rs 21.5576 crore at March 31, 2028, while bank funding is projected to decline from Rs 4.6715 crore to Rs 3.27 crore. The Rs 6 crore of IPO proceeds is separately allocated between FY 2026-27 and the period ending December 2027.

What do Roopa Screen’s inventory and payables assumptions show?

Roopa Screen projects inventory days of 70 in FY 2026-27 and FY 2027-28, down from 83 days in FY 2025-26. Inventory days were 69 in FY 2023-24 and 52 in FY 2024-25. Trade payable days are projected at 55 in each forecast year, compared with 52 days in FY 2025-26, 69 days in FY 2024-25 and 64 days in FY 2023-24.

Roopa Screen attributes the FY 2025-26 increase in inventory days to inventory rising relative to cost of goods sold, or COGS. Inventory increased to Rs 6.984 crore in FY 2025-26 from Rs 4.0945 crore in FY 2024-25, while COGS rose to Rs 30.6712 crore from Rs 28.4934 crore. The forecast requires inventory days to reduce by 13 days from FY 2025-26 while receivable days remain close to the 92-day historical level.

How dependent is the forecast on customer balances?

Roopa Screen’s trade receivables are its largest disclosed current-asset category in the projected March 2028 position. Trade receivables are projected at Rs 24.1484 crore, compared with projected inventory of Rs 11.2432 crore and short-term loans and advances of Rs 2.1487 crore. Receivables represent about 64% of projected current assets of Rs 37.5403 crore at March 31, 2028, based on the disclosed figures.

Roopa Screen’s trade receivables increased from Rs 12.7775 crore at March 31, 2026 to a projected Rs 16.099 crore at March 31, 2027 and Rs 24.1484 crore at March 31, 2028. Short-term loans and advances include advances to suppliers and employees, prepaid expenses and balances with statutory authorities. The 90-day receivables assumption is consequently a central input to the funds projected to remain tied up in current assets.

Roopa Screen does not maintain an order book measured by units or long-term contractual commitments. The company says its rotary nickel screens are consumable products used continuously in customers’ printing and textile operations, making demand primarily dependent on recurring requirements and repeat orders. Its revenue projections are based on expected customer-base expansion, historical repeat-order trends and production capacity after the expansion.

What could change Roopa Screen’s funding plan?

Roopa Screen states that its proposed fund requirements and deployment have not been appraised by a bank, financial institution, external agency or other independent agency. The company says management may revise the allocation because of financial and market conditions, business and growth strategies, competition, access to capital, regulatory conditions, interest rates or exchange-rate movements. Any funding shortfall is proposed to be met through internal accruals or unsecured loans.

Roopa Screen expects commercial operations at its new manufacturing facility to begin in March 2027. The company expects the facility to lift combined production capacity across both manufacturing sites to about 1,63,200 units, supporting higher production, sales, profitability and operating cash flow. That projected cash generation underpins the forecast increase in internal accruals from Rs 8.9314 crore to Rs 21.5576 crore.

Roopa Screen says a monitoring agency is not required because the issue size will not exceed Rs 50 crore, under Regulation 262(1) of the Securities and Exchange Board of India Issue of Capital and Disclosure Requirements Regulations. Its board and management will monitor net-proceeds use through the audit committee, with half-yearly disclosures on application of issue proceeds under Regulation 32 of the listing regulations. The company also says it will prepare an annual statement of funds used for purposes other than those stated in the prospectus.

Conclusion

Roopa Screen’s working-capital forecast relies on a limited improvement in collection time, from 92 days in FY 2025-26 to 90 days in each following forecast year, rather than a return to the 72-day cycle reported in FY 2023-24. The projected reduction in inventory days from 83 to 70 and increase in payable days from 52 to 55 partly reduce operating-cycle pressure, but projected customer balances remain the largest current-asset category.

The next disclosed milestones are commercial operations at the new facility in March 2027 and deployment of the final Rs 2 crore of working-capital IPO proceeds by the quarter ending December 2027. The unresolved matter is whether expanded capacity produces the projected operating cash flow needed to fund Rs 21.5576 crore of internal accruals at March 31, 2028 while receivables remain near 90 days.