Avi Ansh Textile IPO: Key Details; IPO Price is fixed at ₹62 Per Share

Incorporated in April 2005, Avi Ansh Textile Limited is a manufacturer and exporter of 100% cotton yarn, including combed and carded cotton yarn in various counts. The company operates spinning factories with a total capacity of 26,000 spindles, producing approximately 4,500 metric tons of cotton yarn annually, ranging from 20s to 40s counts. Avi Ansh Textile Limited has achieved ISO 14001:2015 and ISO 9001:2015 certifications, showcasing its dedication to environmental management and quality assurance. The company operates in both domestic and global markets, manufacturing and supplying a variety of yarns and fabrics to meet customer needs. As of September 2024, the company has 281 employees in various departments.

The Objectives of the Issue

Avi Ansh Textile Limited intends to utilise the Net Proceeds from the Issue towards the following objectives:

1. To meet Working Capital requirements
2. Term Loan Repayment
3. General Corporate Purpose
    

Highlights of Avi Ansh Textile IPO

Avi Ansh Textile IPO is set to launch with a fixed price issue of ₹26.00 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 NSE SME on 27th September 2024.
• The issue price is fixed at ₹62 per share.
• The fresh issue comprises 41.94 lakh shares, aggregating to ₹26.00 crores.
• The minimum lot size for the application is 2000 shares.
• Retail investors need to invest a minimum of ₹124,000.
• The minimum investment for HNI is 2 lots (4,000 shares), amounting to ₹248,000.
• 3Dimension Capital Services Limited is the book running lead manager for the IPO.
• Skyline Financial Services Private Ltd serves as the registrar.
• Nikunj Stock Brokers is the market maker for the IPO.
   

Avi Ansh Textile 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.

Avi Ansh Textile IPO Issue Details/Capital History

The Avi Ansh Textile IPO is scheduled from 20th September to 24th September 2024, with a fixed price of ₹62 per share and a face value of ₹10. The total issue size is 41,93,541 shares, raising up to ₹26.00 crores through a fresh issue. The IPO will be listed on NSE SME. The pre-issue shareholding is 97,84,930 shares.

Avi Ansh Textile 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: Avi Ansh Textile Ltd

Strengths:

• Strategic location of manufacturing plant
• Diversified product offerings with a commitment to quality
• Experienced management team with industry expertise
• ISO 14001:2015 and ISO 9001:2015 certifications
• Strong presence in both domestic and international markets

Weaknesses:

• High dependence on cotton as a raw material
• Capital-intensive nature of the textile industry

Opportunities:

• Growing demand for cotton yarn and fabrics in domestic and international markets
• Potential for further expansion into new geographical markets
• Scope for product diversification and value addition

Threats:

• Fluctuations in raw material prices, especially cotton
• Intense competition in the textile industry
• Changes in government policies and regulations affecting the textile sector

Financial Highlights: Avi Ansh Textile Ltd

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

Avi Ansh Textile Limited has shown significant growth in recent years. The company's revenue increased by 17%, and profit after tax (PAT) rose by 1053% between the financial year ending on 31st March 2024 and 31st March 2023.
Assets have shown strong growth, increasing from ₹4,336.85 lakhs in FY22 to ₹6,522.64 lakhs in FY24, representing a growth of about 50.4% over two years.

Revenue has seen steady growth, rising from ₹12,016.76 lakhs in FY22 to ₹14,214.65 lakhs in FY24, marking an increase of 18.3% over two years.

The company's profitability has significantly improved, especially in FY24. Profit After Tax increased from ₹155.55 lakhs in FY22 to ₹331.35 lakhs in FY24, representing a growth of 113% over two years. Notably, there was a substantial jump in profitability from FY23 to FY24, with PAT increasing by 1053% in a single year.

Net Worth has shown consistent growth, increasing from ₹1,229.62 lakhs in FY22 to ₹1,587.22 lakhs in FY24, a growth of about 29.1% over two years.

Total Borrowings have increased from ₹2,659.87 lakhs in FY22 to ₹4,481.21 lakhs in FY24, which represents an increase of about 68.5% over two years. This significant increase in borrowings, coupled with growing assets and improved profitability, suggests that the company is investing heavily in expansion or operational improvements.

The company's financial performance shows a trend of steady revenue growth with a remarkable improvement in profitability in the most recent fiscal year. The increase in borrowings, coupled with growing assets and improved profitability, indicates that the company is in an expansionary phase. However, investors should consider the high debt-to-equity ratio and its implications for the company's financial stability.