- **Sportking India is fundamentally a cotton yarn spinner - it buys raw cotton, runs it through nearly 380,000 spindles across three Punjab factories, and sells the resulting yarn to weavers and knitters in 39 countries.** The company was built over four decades by the Avasthi family, growing from 6,000 spindles making acrylic yarn in Ludhiana in 1993 into one of India’s largest yarn exporters, with the second-generation managing director now running day-to-day operations. The recurring approach is simple: own large-scale, fungible spindle capacity that can switch between cotton, blended and synthetic yarns as demand shifts, manage the cotton-to-yarn price spread by booking orders months ahead, and keep the factories running at over 95% utilisation - then reinvest the cash into more spindles and cheaper power. # Business segments A single engine - yarn manufacturing - that spins cotton, polyester-cotton blends and acrylics for domestic and export markets, now extending downstream into fabric and garments through recent acquisitions. ## 1. Yarn manufacturing: the spinning engine that drives everything **The company runs one of India’s largest independent spindle bases, turning raw cotton into finished yarn for global garment brands - and it makes money on the spread between what cotton costs and what yarn sells for.** - **Three fungible factories** - the company operates 379,152 spindles across three units in Punjab: a 66,480-spindle plant in Ludhiana for acrylic and blended yarns, a dye house that supports both spinning units, and a 312,672-spindle plant in Bathinda that makes compact cotton and blended yarn. Because the spindles are fungible, the company can shift production between cotton, polyester-cotton blends and synthetics depending on which market offers the best margin at any given time. - **The cotton-to-yarn spread is the profit engine** - the business earns its margin on the difference between the cost of raw cotton and the selling price of yarn, a one-time sale per unit with no recurring revenue. To protect that spread, the company books sales orders roughly 90 days in advance, so it knows what price it will receive before it commits to buying the cotton. - **A five-to-six-month cotton buffer** - the company holds large cotton inventories, enough for about half a year of production, and stations its own procurement team in cotton-growing regions to secure quality fibre at the right time. As one of India’s largest cotton buyers, it has bargaining power that smaller spinners lack, and it imports raw cotton from overseas when domestic prices or quality don’t suit. - **Sold to brands you know** - the yarn ends up in garments sold by M&S, Zara, H&M, Jack & Jones, Inditex and C&A, among others, with no single customer accounting for more than 10% of revenue. The company sells roughly half its output domestically through dealers and half directly or through agents to export markets, shifting the mix as demand and pricing dictate - China, Bangladesh and Hong Kong are key export destinations. - **Best-in-class utilisation** - all three units run at more than 95% capacity utilisation, which the company describes as best-in-class, producing over 81,000 tonnes of yarn in FY25. That high throughput, combined with price leadership in its market segments driven by consistent quality and competitive pricing, keeps the factories full and the fixed costs spread thin. ## 2. Forward integration: stepping into fabric and garments **The company is buying its way downstream - acquiring promoter-group businesses that dye fabric and make readymade garments, so it can capture more value from the textile chain instead of stopping at yarn.** - **Bought, not built from scratch** - the Board has approved acquiring a majority stake in Marvel Dyers and Processors, a fabric dyeing and finishing business, and buying the manufacturing operations of Sobhagia Sales, a garment maker with turnover of roughly Rs. 116 crores, on a slump-sale basis. Both are promoter-group companies, and the transactions are structured at arm’s length with consideration payable in cash or shares. - **Small today, meant to grow** - the fabric and garmenting business is expected to contribute only about 6-7% of the top line by the end of the current year, so it remains a small add-on to the core spinning operation. The logic is forward integration: a yarn maker that can also sell processed fabric and finished garments captures more of the value that would otherwise go to its customers. - **Management brought in to match the ambition** - the company appointed Chetan Rupal as Whole-time Director in August 2025, bringing over 15 years of fabric-dyeing experience, which the company says directly helps the yarn business by enabling it to offer pre-dyed, high-quality yarns to customers. # Group structure and partners **Sportking is a standalone company with no subsidiaries or joint ventures - its only external equity stake is a 26% investment in a solar power SPV that supplies cheap electricity to its factories.** - **No subsidiaries, no complex structure** - the company has no subsidiaries, associate companies or joint ventures as of the latest filings, making it a straightforward single-entity business. - **A solar SPV for cheaper power** - the company invested Rs. 14.10 crores for a 26% stake in Evincea Renewable Seven Private Limited, an SPV that has commissioned a 40.3 MW solar power plant and supplies electricity to the Bathinda and Ludhiana units under a 25-year agreement. This is projected to save roughly Rs. 14-15 crores annually in power costs. - **Family-led board with independent oversight** - the six-member board includes Munish Avasthi as Chairman and Managing Director, his son as a director, one other executive director, and three independent directors.