Striders Impex IPO: Fast Scale-Up Story, But Can Margins Justify the SME Valuation?

Striders Impex Limited is a trading and distribution company based in Mumbai. It operates in India and abroad through its subsidiaries. The company's IPO is priced at ₹71 to ₹72 per share, aiming to raise about ₹36.3 crore through a fresh issue of 45.31 lakh shares and an offer for sale of 5.09 lakh shares. If the IPO reaches the upper price, it will raise ~ ₹32.6 crore in new capital for the business and ₹3.7 crore in cash for the selling shareholders. The issue will be listed on the NSE Emerge (SME) platform, with about 27% of equity diluted after the issue.

The Opportunity and The Risks

Global Trading & Distribution: Scale Opportunity, Working Capital Discipline Critical  

Striders Impex operates in the trading and distribution sector, which relies on global supply chains, import-export arbitrage, and efficient cross-border sourcing. India's merchandise trade, which includes both exports and imports, surpasses $1.5 trillion annually. Trading intermediaries play an important role in linking manufacturers with international buyers. Government initiatives like PLI schemes, logistics digitisation, and export promotion policies support higher trade volumes.  

India's export ecosystem is slowly diversifying. It is moving beyond traditional commodities into areas such as engineering goods, electronics, chemicals, and consumer products. Trading companies benefit from global sourcing shifts away from China, the India-UAE CEPA, and other trade agreements. They also gain from improved port logistics, digital documentation, and the growth of SME exporters.  

Still, the trading industry faces low margins and high competition. EBITDA margins typically range from 3% to 8% for traditional traders, and profitability relies heavily on procurement spreads and currency management. Working capital cycles can extend from 120 to 180 days, especially when receivables dominate, making access to bank financing crucial. In this environment, scale, supplier relationships, credit discipline, and inventory control shape long-term success. 

Business Model  

Striders Impex: Asset-Light Trading, Balance Sheet Intensive  

Striders Impex is a trading and distribution firm with operations in India and overseas subsidiaries, including those in the UAE. The company sources goods and supplies them to institutional and wholesale customers in various markets. It earns revenue through product sourcing, resale spreads, bulk procurement arbitrage, and cross-border trade margins.  

FY25 Financial Snapshot  

• Revenue: ₹6,073.11 lakh (₹60.73 Cr)  

• PAT: ₹802.03 lakh (₹8.02 Cr)  

• EBITDA (approx.): ₹898.96 lakh  

• EBITDA Margin: 14.8%  

• PAT Margin: 13.2%  

Although reported margins seem strong for a trading company, the business heavily depends on significant working capital investment.

Balance Sheet Structure (FY25)  

• Inventory: ₹1,270.96 lakh  

• Trade Receivables: ₹1,877.81 lakh  

• Trade Payables: ₹537.76 lakh  

• Total Borrowings: ₹2,055.38 lakh  

• Debt/Equity: 1.42x  

Working Capital Cycle (FY25)  

• Inventory Days: 107 days  

• Receivable Days: 113 days  

• Payable Days: 45 days  

• Net Cash Conversion Cycle: 175 days  

Growth requires ongoing funding support. The IPO fresh issue (~ ₹32.6 Cr at the upper band) mainly aims to support working capital. The model is asset-light but has a heavy balance sheet in current assets.

Striders Impex primarily acts as a trading intermediary and not a manufacturer. Revenue comes from trade volumes rather than production capacity.  

1. Core Trading Revenue (Primary Segment)  

Revenue arises from sourcing products and selling them to institutional buyers or distributors.  

FY25 highlights:  

• Cost of materials: ₹4,339.14 lakh  

• Revenue: ₹6,073.11 lakh  

• Gross Spread: ₹1,733.97 lakh  

• Gross Margin: 28.6%  

This spread must cover employee costs, finance costs, logistics, and overheads.  

2. Export & Overseas Operations  

The UAE subsidiaries help with cross-border sourcing, margin optimisation through trade routing, and access to international buyers. However, this opens the door to forex volatility risk, regulatory exposure, and geopolitical sensitivity.  

3. Cost Structure & Operating Mix (FY25)  

Cost of Materials: ₹4,339.14 lakh (71% of revenue)  

Employee Expenses: ₹99.41 lakh (1.6%)  

Finance Cost: ₹70.90 lakh (1.2%)  

Other Expenses: ₹744.25 lakh (12.3%)  

EBITDA Margin: 14.8%  

Unlike agencies or tech firms, procurement is the main cost driver here, not manpower. This shows a low fixed cost base, a high reliance on gross trading spreads, and sensitivity to price fluctuations.  

4. Operating Leverage & Growth Dynamics  

Revenue grew from ₹2,996.42 lakh (FY23) to ₹4,170.48 lakh (FY24) to ₹6,073.11 lakh (FY25), indicating a CAGR of about 42%. PAT rose from ₹203.12 lakh (FY23) to ₹802.03 lakh (FY25).  However, this growth has led to increased borrowings and higher receivables, which highlights the working-capital intensity of the model.   

Key Business Strategies

• Scale Through Working Capital Expansion: IPO proceeds will strengthen working capital. This will allow for higher trade volumes without high short-term borrowing.

• Deepen Supplier & Customer Relationships: Improve procurement terms and secure repeat institutional buyers to protect spreads and stabilise revenues.

• Leverage Overseas Subsidiaries: Use UAE entities to optimise cross-border sourcing, diversify markets, and improve margin flexibility.

• Improve Cash Cycle Discipline: Reduce receivable days and improve inventory rotation to sustain ROE and control leverage as the business scales.

Promoters

Striders Impex is led by Mustafa Esmail Kapasi, Kumarshri Rajkumar Bahety, and Mariya Mustafa Kapasi. After the IPO, the promoters will keep majority control, with their minimum contributions locked in for three years according to SME rules. Mustafa Esmail Kapasi (Chairman and MD) has finished higher secondary education and manages strategy and supplier relations. Kumarshri Rajkumar Bahety (MD) is a graduate who oversees procurement and operations. Mariya Mustafa Kapasi, also a graduate, plays a role in strategic and administrative oversight.The promoter group has shown strong revenue growth since 2021; however, maintaining this growth will depend on better management of working capital and leverage.

Promoter Holding

Working Capital Intensity

Striders runs a trading model that relies heavily on working capital. In FY25, receivables were ₹18.78 crore, and inventory was ₹12.71 crore, resulting in a cash conversion cycle of about 175 days. Thus, growth depends on credit discipline and inventory turnover.

Asset-Light but Capital Absorbing

The business is operationally light on assets, with few fixed assets compared to its ₹60.73 crore in revenue for FY25. However, capital is tied up in receivables instead of capital expenditures, making liquidity management more crucial than asset use.

Cash Flow Sensitivity

Profit growth has come with increased borrowings, which reached ₹20.55 crore in FY25. In trading companies, profits do not always translate into cash, so collection efficiency remains essential.

Profitability Profile

Revenue rose from ₹29.96 crore in FY23 to ₹60.73 crore in FY25, reflecting a compound annual growth rate of about 42%. The EBITDA margin improved to around 14.8%, and the return on equity exceeded 50%. Sustainability now depends on maintaining margins and reducing the working capital cycle.

Peer Comparison

Sector Specific Ratios

Striders Impex is raising about ₹32.6 crore through a new issue, along with a small Offer for Sale. The main goal is to improve working capital and support revenue growth.

The funds will be used for:

• Funding additional working capital needs

• Supporting higher inventory and receivables as trade volumes increase

• Reducing reliance on short-term loans

• General corporate purposes

With a cash conversion cycle of around 175 days, growth is costly. The IPO seeks to finance expansion without excessively increasing debt.

Investment Thesis

• Revenue increased from ₹29.96 crore in FY23 to ₹60.73 crore in FY25, which is about a 42% compound annual growth rate (CAGR)

• EBITDA margin rose to around 14.8% in FY25

• Return on equity (ROE) surpassed 50%, showing strong earnings growth

• The asset-light model has low fixed asset intensity

• Foreign subsidiaries offer flexibility for sourcing across borders

Topline growth is clear. However, ongoing success depends on better cash conversion and keeping procurement spreads intact.

LMVT Framework

Leadership: The promoter leads a trading business that has grown quickly since 2021. The next stage needs stricter control over working capital and debt.

Moat: The trading industry has few entry barriers. The competitive edge comes from supplier relationships, pricing discipline, and credit management, not structural obstacles.

Valuation: Profitability indicators are strong for a trading business, but debt levels and the number of days for receivables are crucial to watch. Maintaining EBITDA margins around 14-15% is essential.

Tailwinds: India’s expanding export market and the need for global supply chain diversification benefit trading intermediaries.

Bottom Line

Striders Impex is a rapidly growing trading company in a competitive and capital-intensive industry. The chance lies in increasing volumes while keeping spreads. The risk comes from potential balance sheet strain. Long-term value creation will depend on careful management of working capital.