Globe Textiles India Limited is coming up with a public issue on 12 June (tentative). Let us go through the Globe Textiles India Limited IPO review to see what does it have in store for us.
About the company – Since 1995, this company has been engaged in trade and supply of all kinds of textile materials. Their business involves trade and supply of a vast range of apparel and related services. The company, GTIL (Globe Textiles India Limited) is a Gujarat based textile company. It’s registered office is at Plot No. 38 to 41, Ahmedabad Apparel Park, GIDC Khokhra, Ahmedabad – 380008, Gujarat, India. Globe textiles manufacture garments, cotton printed fabrics and fancy apparel. The company also engages itself into trading of fabrics and yarn. In addition their business model focuses on popular fabrics for shirting, Jeans, Denims and non-denims for which they have a good customer base , both in India and abroad. The company has 3 textile manufacturing unit around Ahmedabad, Gujarat. They export a lot of their products to international customers.
The company has a scalable business model. It has a solid customer base. Many reputed international and Indian companies are it’s regular customers.
Company financials – According to the Draft Prospectus submitted on April 28, 2017, GTIL the company reported negative cash flows from financial activities, investing activities and operating activities which is summarized below.
The company also has direct tax liabilities as shown below.
As on December, 2016 the company has contingent tax liabilities in the form of Direct Tax/ Notices/ Appeals amounting to Rs 459.67 crores. If this contingent liability materializes fully or partly, it could affect the company performance.
On the other hand, in last four financial years, it posted turnover of Rs. 166.30 cr. versus net profits of Rs. 2.23 cr. (FY14), turnover of Rs. 175.26 cr. versus net profits of Rs. 2.44 cr. (FY15), turnover of Rs. 183.16 cr. versus net profits of Rs. 1.57 cr. (FY16) and turnover of Rs. 191.86 cr. versus net profits of Rs. 3.25 cr. (FY17). Though in FY 16 they suffered setback in performance. The post issue asking price is at a P/E of 15 plus versus composite P/E of industry is 23 plus and the P/BV is of 1.78.
Promoters of the company – Shri Bhavin Suryakant Parikh, Shri Bhavik Suryakant Parikh.
About the issue (tentative) – It is a fixed price issue. Details of the issue is summarised below.
Issue opens on – 12 June, 2017
Issue closes on – 15 June, 2017
Face Value – Rs 10
Issue Price – Rs 51 (fixed)
Lot size – 2000
Issue size – 13.71 crores for 2,688,000 nos. of equity shares
Listing exchange – NSE SME
Lead manager to the issue – Hem Securities Limited
Registrar to the issue – Bigshare Services Private Limited
Globe Textiles India Limited IPO Review:
The Globe Textiles India Limited IPO review does not find the company financials very attractive though the business model is in shape. Hence our view is neutral. For more information on other IPOs kindly visit our IPO Review section.
Partha, an engineer by education, is theoratically actively following the stock and commodity markets since 1990. He is an active trader since 2003. He has received formal education in future and options and quantum analysis. He is presently working on research oriented projects using Python and data analytics.