Surat Trade & Mercantile Ltd is a commodity trader that makes its money by buying physical metal and instantly locking in a sale price on a futures exchange, never leaving a bet open overnight. It was born in 1945 as a textile manufacturer, Surat Textile Mills, but sold every last machine and factory in April 2022 and renamed itself in September 2023 to match its new life. The recurring approach is a hard pivot: when one business stops working, the company sells it, consolidates the cash, and starts something entirely different - debt-free and with no subsidiaries in tow. # Business segments Two engines that feed each other - a commodity-trading operation that generates the turnover, and an investment portfolio that puts the surplus cash to work - both run from the same balance sheet with no debt. ## 1. Commodity trading: the operating engine **The company buys physical silver and copper, sells them forward on an exchange in the same breath, and earns the spread - a hedged, cash-and-carry model with no open positions.** - **Fully hedged, every trade** - it buys the physical commodity and simultaneously sells a futures contract on an exchange (MCX or NCDEX) for the same quantity, locking in a return on investment before the metal even moves; no trade is ever kept open or unhedged. - **Metals are the real focus** - although its legal object clause permits trading in everything from wheat and cotton to crude oil and cattle, in practice the business runs almost entirely on silver and copper. - **Customer concentration is a fact of life** - in its first year of trading, all continuing revenue came from a single customer, NCUBE VENTURES LLP; the following year, four customers - Jyotirmay Jewels, Capri Global Holdings, Aprn Enterprises and Edelweiss Mutual Fund - each accounted for more than a tenth of revenue. - **Two risks, both contained** - mark-to-market moves during a transaction can demand extra margin cash, which affects the return on investment but not the final profit, and a settlement failure at the exchange is theoretically possible but considered highly unlikely because SEBI tightly regulates MCX and NCDEX. ## 2. Financial investments: the treasury engine **Surplus cash from the asset sale and trading profits is parked in a mix of mutual funds, bonds and alternative investment funds to earn a return while staying liquid.** - **Born from the factory sale** - when the Jolwa manufacturing division assets were disposed of in April 2022, the proceeds were deployed in phases into a diversified financial portfolio rather than sitting idle. - **AIFs for yield, bonds for stability** - the portfolio holds units in credit and venture-debt funds such as Avendus Structured Credit Fund II, Ask Private Credit Fund and Blume Ventures India Fund IV, alongside a perpetual bond from Bank of Baroda that pays a fixed coupon. - **A deliberate tilt toward credit** - the company has stated it plans to allocate more to high-performance credit AIFs, aiming to reduce portfolio volatility and potentially lift returns compared with plain-vanilla debt. # Group structure and partners **The company is a standalone, debt-free listed entity with no subsidiaries or joint ventures, controlled by a single promoter family that consolidated its holding through a merger.** - **No corporate layers underneath** - as of March 2025, Surat Trade & Mercantile has no subsidiaries, joint ventures or associate companies, so all assets and earnings sit directly on its own books. - **The merger that simplified everything** - Vareli Trading Company Limited, a promoter-group investment vehicle, was amalgamated into Surat Textile Mills Limited in September 2022, eliminating one layer of the holding structure and putting shares directly into the hands of seven individual and HUF shareholders. - **Promoters own just over two-thirds** - the seven shareholders - Praful A. Shah, Shilpa P. Shah, Alok P. Shah, Deepika A. Shah, Suhail P. Shah and two HUFs - together hold 68.45% of the equity, with the Managing Director, Alok P. Shah, being a Stanford-trained electrical engineer and University of Chicago MBA. - **The old textile buyer is no longer family** - Garden Silk Mills, which was once a promoter-group company, was reclassified as a public shareholder in January 2022.