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Encompass Design India

• Encompass Design India (ScaleSauce) is coming out with an initial public offering (IPO) of 37,58,400 shares in a price band of Rs 101-107 per equity share. 
• The issue will open on December 05, 2025 and will close on December 09, 2025.
• The shares will be listed on SME Platform of NSE.
• The face value of the share is Rs 10 and is priced 10.10 times of its face value on the lower side and 10.70 times on the higher side.
• Book running lead manager to the issue is 3Dimension Capital Services.
• Compliance Officer for the issue is Nikita Dinesh Chandak.

Profile of the company

Encompass Design India, operating under the brand name ‘ScaleSauce’, is engaged in building and scaling consumer brands in India, with a focus on the home & living and food segments tailored to the modern urban Indian consumer. The company was incorporated in 2010 as a trading enterprise and commenced the trading of fabrics. In response to emerging market opportunities, it subsequently expanded its operations to include e-commerce support services, which it operated alongside its trading activities. 

The company’s core business activities include the manufacturing of home and lifestyle products, such as bed sheets, curtains, comforters, table linens, and pillow covers, as well as food products, with a primary focus on sauces, marketed under its own brands. In addition to its manufacturing operations, the company is also involved in the trading of agro-based products, cotton, and fabrics. It further undertakes the sale of various other goods, primarily through gated market platforms, enabling access to niche buyers.

In addition to its product-based operations, the company offers a comprehensive range of digital and e-commerce support services designed to enable the growth of consumer brands in the online space. These services provide end-to-end solutions across marketing, technology, and operations, catering to both direct-to-consumer (D2C) businesses and corporate clients. Through these offerings, it assists brands in enhancing visibility, expanding their digital presence, and driving sales growth.

Proceed is being used for:

• Funding capital expenditure requirements of the company towards purchasing office, interior work and refurbishment
• Meeting working capital requirements of the company
• Repayment/ prepayment of certain borrowings availed by the company
• General corporate purpose

Industry Overview

In recent years India has experienced a boom in internet and smartphone penetration. As of November 2024, India has around 944.7 million wireless internet subscribers, which is increased from 941.5 from October 2024. The smartphone base has also increased significantly and is expected to reach 1.1 billion by FY25. This has helped India’s digital sector, and it is expected to reach $1 trillion by 2030. This rapid rise in internet users and smartphone penetration coupled with rising incomes has assisted the growth of India’s e-commerce sector. India’s e-commerce sector has transformed the way business is done in India and has opened various segments of commerce ranging from Business-to-Business (B2B), direct-to-consumer (D2C), Consumer-to-Consumer (C2C) and Consumer-to-Business(C2B). India’s social commerce Gross Merchandise Value (GMV) stood at $2 billion in 2020. By FY25, it is expected to reach $20 billion, with a potentially monumental jump to $70 billion by FY30, owing to high mobile usage.

Meanwhile, India’s textiles sector is one of the oldest industries in the Indian economy, dating back to several centuries. The industry is extremely varied, with hand-spun and hand-woven textiles sectors at one end of the spectrum, with the capital-intensive sophisticated mills sector at the other end. The fundamental strength of the textile industry in India is its strong production base of a wide range of fibre/yarns from natural fibres like cotton, jute, silk, and wool, to synthetic/man-made fibres like polyester, viscose, nylon and acrylic. The market for Indian textiles and apparel is projected to grow at a 10% CAGR to reach $350 billion by 2030. Moreover, India is the world's 3rd largest exporter of Textiles and Apparel. India ranks among the top five global exporters in several textile categories, with exports expected to reach $100 billion. India’s home textile industry is expected to expand at a CAGR of 8.9% during 2023-32 and reached $23.32 billion in 2032 from $10.78 billion in 2023.

The future of the Indian textiles industry looks promising, buoyed by strong domestic consumption as well as export demand. India is working on various major initiatives to boost its technical textile industry. Owing to the pandemic, the demand for technical textiles in the form of PPE suits and equipment is on the rise. The government is supporting the sector through funding and machinery sponsoring. Top players in the sector are achieving sustainability in their products by manufacturing textiles that use natural recyclable materials. With consumerism and disposable income on the rise, the retail sector has experienced a rapid growth in the past decade with the entry of several international players like Marks & Spencer, Guess and Next into the Indian market. The growth in textiles will be driven by growing household income, increasing population, and increasing demand by sectors like housing, hospitality, healthcare, etc. The industrial textiles market is likely to increase at an 8% CAGR from $2 billion in 2020 to $3.3 billion in 2027. The overall Indian textiles market is expected to be worth more than $209 billion by 2029. 

Pros and strengths

Strong brand and innovative products: The company operates a portfolio of premium brands across two high-growth consumer categories -- Home & Living and Gourmet Food & Beverages. Each brand is differentiated by product innovation and clear focus on what customers want; i) Stoa Paris: Offers premium home textiles with special innovations like Ultra Satin, a fabric designed to be gentle on skin and hair, making it different from regular options. Such features allow it to charge premium pricing while building repeat customer engagement; ii) Quirkloom: The product design teams watch trends in subcultures, such as reading, travel, sports, and music, to create in-the-moment designs that cater to fans of these young generation; and iii) Small Batch: Focuses on small-batch gourmet products made from high-quality ingredients and chef-developed recipes, appealing to health-conscious and quality-focused consumers.

Agile and scalable business model: The company’s business model is designed for flexibility and rapid scaling: i) In Home & Living, it manages in-house design and core manufacturing (cutting and stitching) to control quality and time; ii) For Gourmet Food & Beverages, the company develops recipes internally and partners with cloud kitchens and kitchen specialists to execute small-batch production, enabling it to scale up or down based on demand; iii) Warehousing and logistics are centralised and optimised, supporting both segments with integrated operations for efficient inventory turnover and reduced lead times. This structure enables the company to respond swiftly to demand changes, launch seasonal or limited-edition SKUs, and scale profitably.

Experienced leadership and business synergies: The company’s leadership team brings decades of hands-on experience in key areas like branding, retail, online marketing, supply chain, and technology. Amit Dalmia, Chairman & Managing Director, has over 27 years of experience in technology, digital business, and building strong brands. Susmita Dalmia, Whole-Time Director, has more than 20 years of expertise in product design, planning, and tech. Ruman Agarwal, also a Whole-Time Director, brings 19 years of experience in digital marketing, product strategy, and e-commerce operations. Yogendra Vashishta, Chief Strategy Officer, has nearly 38 years of experience in branding and creative strategy, having held senior positions at well-known companies like Reliance and VIP Industries. This combined experience helps the company to stay innovative, run smoothly, and grow steadily.

Risks and concerns

Dependence on limited suppliers for raw materials: The company relied on a limited number of suppliers for the procurement of raw materials required for its manufacturing operations and for sourcing products intended for trading. The company has procured 50.15%, 47.54% and 31.81% of its raw material from top 10 suppliers in FY25, FY24 and FY23 respectively. This reliance exposes it to various operational and financial risks. Also, the company has not entered into any long-term supply agreements with these suppliers, and its procurement is conducted on a purchase-order basis. Furthermore, the absence of long-term contractual arrangements may limit its bargaining power and expose it to unfavorable pricing or supply terms, which could adversely affect its margins and overall profitability.

Operational risks arising from platform-based sales model: The company primarily sell its self-manufactured products through third-party online marketplaces such as Amazon and Myntra. These platforms charge teh company commissions and fees for listing and selling its products, and it is subject to their terms and conditions. Any increase in the commission rates or fees charged by these platforms could result in higher operating costs for it. In order to maintain its margins, it may be compelled to increase the prices of its products, which could adversely affect customer demand, its competitiveness, and overall financial performance. Additionally, any changes in their policies, algorithms, or business practices could impact its visibility, sales volume, and profitability. The company’s dependence on these platforms exposes it to risks beyond its control, and any adverse developments related to them could have a material adverse effect on its business, financial condition, and results of operations.

High revenue dependence on top customers: The majority of the company’s revenue from operations is concentrated towards a limited number of customers. The company has garnered 66.53%, 77.92% and 81.88% of its total revenue from top 10 customers in FY25, FY24 and FY23 respectively. The loss of its major customers or a significant reduction in demand from any of its major customers may adversely affect its revenues and profitability. The company cannot assure that it shall generate the same quantum of business, or any business at all, from these customers, and loss of business from one or more of them may adversely affect its operations and profitability.

Outlook

Encompass Design India, known as ‘ScaleSauce,’ builds and scales consumer brands in India, focusing on home, living, and food segments for modern urban consumers. The company has strong brand and innovative products. It has agile and scalable business model. On the concern side, the company depends upon a limited number of suppliers for providing raw materials and products. Furthermore, it has not entered into any long-term agreement or contract for providing these raw materials and products. Any dispute with one or more of them may adversely affect its business operations. Moreover, the company derives a significant portion of its revenue from its trading activity, any event negatively affecting the trading activity could have a material adverse effect on its business, results of operations, financial condition and prospects.

The company is coming out with a maiden IPO of 37,58,400 equity shares of Rs 10 each. The issue has been offered in a price band of Rs 101-107 per equity share. The aggregate size of the offer is around Rs 37.96 crore to Rs 40.21 crore based on lower and upper price band respectively. On performance front, the company’s revenue from operation rose to Rs 5,464.94 lakh in FY 2025 from Rs 4,004.18 lakh in FY 2024, registering an impressive increase of 36.48%. For FY?2024-25, the restated profit after tax stood at Rs 1,079.38?lakh, compared to Rs 687.90?lakh in FY?2023-24, representing an increase of 56.91%. 

The company follows a clear, data-driven approach to building and growing its brands. This process begins with identifying unmet needs among premium Indian consumers and developing differentiated products and brands that address those gaps. These are validated through a combination of customer feedback, repeat purchases, and marketing performance indicators, ensuring a strong product-market fit. Once validated, the company grows the brand by following a clear plan that includes launching new products based on consumer preferences, seasonal demand, and changing lifestyle trends. It follows a clear step-by-step process for product development -- starting with recipes created by chefs, followed by small batch testing and multiple tastings until the final version is approved. This ensures it to deliver consistent quality, even at scale. With strong digital marketing and multi-channel sales experience, it is able to bring products to market quickly and grow its brands in a smart, cost-effective way.