Avax Apparels and Ornaments Lists at 90% Premium, Shows Strong Performance on BSE SME

resr 5paisa Research Team

Last Updated: 14th January 2025 - 12:33 pm

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Avax Apparels and Ornaments Limited, operating since June 2005 in wholesale trading of knitted fabric and online retail of silver ornaments, marked its entry into the public markets on Tuesday, January 14, 2025. The company, which specializes in wholesale trading of knitted cloth and online retail of silver ornaments with operations across major cities in India, commenced trading on BSE SME amid exceptional investor enthusiasm.
 

 

Avax Apparels Listing Details

The company's market debut reflected strong investor confidence in its business model and growth prospects:

  • Listing Time & Price: When trading commenced at market open, Avax Apparels shares debuted at ₹133 on BSE SME, delivering an impressive premium of 90% to IPO investors. This strong opening validates the market's recognition of the company's business model and growth plans.
  • Issue Price Context: The significant premium emerged after the company had fixed the issue price at ₹70 per share. This pricing approach successfully balanced retail investor accessibility with fair value for the company's growth potential.
  • Price Evolution: By 10:50 AM IST, investor enthusiasm continued to build, pushing the stock to ₹139.65, representing an outstanding gain of 99.50% over the issue price, after touching the same price as an intraday high, demonstrating sustained buying interest throughout the early trading session.
     


Avax Apparels First-Day Trading Performance 

The trading activity showed robust participation and strong investor conviction:

  • Volume and Value: Within the first few hours, 1.20 lakh shares changed hands, generating a turnover of ₹1.64 crore. Notably, 100% of traded shares were marked for delivery, indicating pure investment interest rather than speculative trading.
  • Demand Dynamics: The stock's trading pattern showed continued strength with buy orders for 1.04 lakh shares, reflecting strong buying interest at higher levels.
     


Avax Apparels Market Sentiment and Analysis

  • Market Reaction: Strong opening followed by further upward momentum
  • Subscription Rate: The Avax Apparels IPO was massively oversubscribed by 260.42 times
  • Pre-listing Grey Market Premium: Shares showed strong demand in unofficial markets

 

Avax Apparels Growth Drivers and Challenges

Expected drivers of future performance:

  • Locational advantage in textile hub
  • Strong network and sector connections
  • Excellent customer relations
  • Experienced professional team
  • Good management track record

 

Potential challenges:

  • Tiny post-IPO equity
  • Highly competitive market
  • Fragmented segment
  • Margin sustainability concerns
  • Longer gestation period

 

Utilisation of IPO Proceeds 

The ₹1.92 crore raised through fresh issue will be used for:

  • Meeting working capital requirements
  • General corporate purposes
     

 

Avax Apparels Financial Performance 

The company has shown strong results:

  • Revenue increased to ₹22.06 crore in FY2024 from ₹14.70 crore in FY2023
  • H1 FY2025 (ended September 2024) showed revenue of ₹15.01 crore with PAT of ₹0.91 crore
  • Net worth of ₹4.05 crore as of September 2024
  • Total borrowings of ₹0.72 crore

 

As Avax Apparels and Ornaments begins its journey as a listed entity, market participants will closely monitor its ability to execute growth plans and maintain operational metrics. The strong listing and sustained momentum suggest robust investor confidence in the company's prospects in the textile and ornaments sector, particularly given its strategic location and established business relationships, despite concerns about the small equity base and highly competitive market environment.
 

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