Avax Apparels IPO Opens on 20th Sep 2024 with Price Price of ₹70 Per Share

Incorporated in June 2005, Avax Apparels And Ornaments Limited is involved in two separate lines of business: wholesale trading of knitted cloth and online retail of silver ornaments. The company wholesales knitted fabric and sells silver ornaments online, including rings, ladies' payal, gents kada, plate sets, glass, bangles, bowls, chains, and other jewellery. It supplies to all major cities across the country. The company has recently purchased machinery for manufacturing knitted cloth, aiming to start manufacturing soon as a step towards backward integration. As of September 2024, the company has 7 full-time employees.

The Objectives of the Issue

Avax Apparels And Ornaments Limited intends to utilise the Net Proceeds from the Issue towards the following objectives:

1. To meet the Working Capital requirements of the Company
2. To meet the General Corporate Purposes

Highlights of Avax Apparels And Ornaments IPO

Avax Apparels And Ornaments IPO is set to launch with a fixed price issue of ₹1.92 crores. The issue is entirely fresh. Here are the key details of the IPO:

• The IPO opens for subscription on 20th September 2024 and closes on 24th September 2024.
• The allotment is expected to be finalised on 25th September 2024.
• Refunds will be initiated on 26th September 2024.
• Credit of shares to Demat accounts is also expected on 26th September 2024.
• The company will tentatively list on BSE SME on 27th September 2024.
• The issue price is fixed at ₹70 per share.
• The fresh issue comprises 2.74 lakh shares, aggregating to ₹1.92 crores.
• The minimum lot size for the application is 2000 shares.
• Retail investors need to invest a minimum of ₹140,000.
• The minimum investment for HNI is 2 lots (4,000 shares), amounting to ₹280,000.
• SKI Capital Services Limited is the book running lead manager for the IPO.
• Skyline Financial Services Private Ltd serves as the registrar.
• SKI Capital Services is the market maker for the IPO.

Avax Apparels And Ornaments IPO - Key Dates

The cut-off time for UPI mandate confirmation is 5:00 PM on 24th September 2024. This deadline is crucial for investors to ensure their applications are processed successfully. Investors are advised to complete their applications well before this deadline to avoid any last-minute technical issues or delays.

Avax Apparels And Ornaments IPO Issue Details/Capital History

The Avax Apparels And Ornaments IPO is scheduled from 20th September to 24th September 2024, with a fixed price of ₹70 per share and a face value of ₹10. The total issue size is 2,74,000 shares, raising up to ₹1.92 crores through a fresh issue. The IPO will be listed on BSE SME. The pre-issue shareholding is 7,65,158 shares.

Avax Apparels And Ornaments IPO Allocation & Minimum Investment Lot Size

The IPO shares are allocated across different investor categories as follows:

Investors can place bids for a minimum of 2000 shares, with additional bids required in multiples of this figure. The table below illustrates the minimum and maximum investment amounts for retail investors and HNIs, expressed in shares and monetary values.

SWOT Analysis: Avax Apparels And Ornaments Ltd

Strengths:

• Locational advantage (hub of cloth manufacturing)
• Good network and connections with players in the sector
• Excellent customer relations
• Experienced and professional team
• Good track record of management

Weaknesses:

• Limited financial resources
• Limited pricing power due to emerging competition
• Limited experience, specifically in silver ornament sales

Opportunities:

• Government thrust under Make in India Policy
• Good demand for knitted cloth and silver ornaments is expected to grow further
• Positive government initiatives
• Increasing the share of the market

Threats:

• Changes in government policy
• Exposure to sharp changes in raw material prices

Financial Highlights: Avax Apparels And Ornaments Ltd

Below are the financial results for the Fiscal years FY24, FY23, and FY22:

Avax Apparels And Ornaments Limited has shown significant growth in recent years. The company's revenue increased by 50% and profit after tax (PAT) rose by 99% between the financial year ending on 31st March 2024 and 31st March 2023.

Assets have shown substantial growth, increasing from ₹57.66 lakhs in FY22 to ₹484.6 lakhs in FY24, representing a remarkable growth of about 740% over two years.

Revenue has seen exponential growth, rising from ₹28.87 lakhs in FY22 to ₹2,205.98 lakhs in FY24, marking an impressive increase of 7,540% over two years.

The company's profitability has improved significantly. Profit After Tax increased from ₹1.01 lakhs in FY22 to ₹138.19 lakhs in FY24, representing a substantial growth of 13,582% over two years.

Net Worth has shown strong growth, increasing from ₹1.65 lakhs in FY22 to ₹314.68 lakhs in FY24, a growth of about 19,062% over two years.

Total Borrowings have increased from ₹15.28 lakhs in FY22 to ₹41.13 lakhs in FY24, representing an increase of about 169% over two years. This increase in borrowings, coupled with the significant growth in assets and revenue, suggests that the company is rapidly expanding.

The company's financial performance shows a trend of exponential growth across all key metrics. While this growth is impressive, investors should consider the sustainability of such rapid expansion and the company's ability to manage this growth effectively. The low base in FY22 contributes to the high percentage increases observed.