Avi Ansh Textile IPO Listing Details

Avi Ansh Textile Limited, a manufacturer and exporter of cotton yarn, made a positive debut on the Indian stock market on Friday, 27th September 2024, with its shares listing at a premium to the issue price. However, the initial gains were short-lived as the stock experienced some selling pressure during early trading.

Listing Details

• Listing Price: Avi Ansh Textile shares were listed at ₹68 per share on the NSE SME platform, marking a strong start to its journey as a publicly traded company.
• Comparison to Issue Price: The listing price represents a significant premium over the IPO issue price. Avi Ansh Textile had set its IPO price at ₹62 per share.
• Percentage Change: The listing price of ₹68 on the NSE SME translates to a premium of 9.68% over the issue price of ₹62.

First-Day Trading Performance

• Opening vs. Latest Price: Following its strong opening, Avi Ansh Textile's share price declined. By 10:31 AM, the stock was trading at ₹64.60, down 5% from its opening price but still 4.19% above the issue price, hitting the lower circuit for the day.
• Market Capitalisation: As of 10:31 AM, the company's market capitalisation stood at ₹90.29 crore.
• Trading Volume: The traded volume was 17.38 lakh shares with a traded value of ₹11.60 crore, indicating moderate investor interest on the first day of listing.

Market Sentiment and Analysis

• Market Reaction: The market initially reacted positively to Avi Ansh Textile's listing, but subsequent selling pressure led to a decline from the opening price.
• Subscription Rate: The IPO was moderately oversubscribed by 8.32 times, with retail investors leading at 11.38 times subscription and other categories at 5.25 times.
• Price Band: The stock hit its lower circuit of ₹64.60 (5% below the opening price) during morning trading.

Growth Drivers and Challenges

Expected drivers of future performance:

• ISO certifications demonstrating commitment to quality and environmental management
• Diverse product offerings in domestic and international markets
• The strategic location of a manufacturing plant
• Experienced management team

Potential challenges:

• Highly competitive cotton yarn manufacturing sector
• Volatility in raw material prices
• High debt-to-equity ratio of 2.82

Utilisation of IPO Proceeds

Avi Ansh Textile plans to use the funds for:

• Meeting working capital requirements
• Repayment of term loans
• General corporate purposes

Financial Performance

The company has demonstrated significant growth:

• Revenue increased by 17% to ₹14,214.65 lakh in FY2024 from ₹12,149.57 lakh in FY2023
  Profit After Tax (PAT) rose substantially by 1053% to ₹331.35 lakh in FY2024 from ₹28.74 lakh in FY2023

As Avi Ansh Textile begins its journey as a listed entity, market participants will closely monitor its ability to leverage its manufacturing capabilities and manage its debt to drive future growth and improve shareholder value. The positive listing followed by a decline suggests cautious market sentiment towards the company's prospects in the competitive cotton yarn manufacturing sector.