Akshar Spintex Limited or ASL is a company who is engaged in the manufacturing of cotton yarn. The company is based in Gujarat. They manufacture 100% cotton yarn including combed, semi-combed as well as carded yarn. ASL is in the process of getting their company listed in the primary markets through an initial public offering. We have checked the draft red herring prospectus of the company and will post our Akshar Spintex Limited IPO Review in this article.
About Akshar Spintex Limited IPO :
- IPO Opens on – April 27, 2018.
- IPO Closes on – May 3, 2018.
- Face Value – Rs. 10 Per Equity Share.
- Issue Price – Rs. 40 Per Equity Share.
- Issue Type – Fixed Price Issue IPO.
- Market Lot – 3000 shares.
- Minimum Order Quantity – Nil.
- Issue Size – 6,747,000 Equity Shares of Rs 10 aggregating up to Rs 26.99 Cr.
- Listing Exchange – BSE SME Exchange.
- Draft Prospectus – Download.
Objectives of the issue:
- Funding the working capital requirements of this company.
- General corporate purposes.
- Akshar Spintex Limited is incorporated in 2013.
- The manufacturing facility of this company is situated in the vicinity of the rich cotton growing areas of Gujarat.
- Akshar Spintex Limited has installed capacity of total 24,480 spindles.
- This company has 216 employees on its payroll.
- Akshar Spintex Limited takes immense pride in perceiving its role as the comprehensive architect of every single yarn that produces.
- It is this demand for perfection that has spurred the growth of an organization and its corporate philosophy.
- This company have total 24,480 spindles with annual production 6000 MT in cotton yarn for this count range is 16’s to 44’s Ne contamination controlled auto coned carded, semi coned and combed mill with all latest German and Japanese technology machineries.
- Those who can furnish clients with the best quality, competitive price and excellent customer services and prompt delivery can only survive in the market.
Promoters of the company :
- Ashok Bhalala, aged 44 years, is the Promoter and Managing Director of this company.
- Amit Gadhiya, aged 31 years, is the Promoter and Whole Time Director of this company.
- Harikrishna Chauhan, aged 50 years, is the Promoter and Whole Time Director of this company.
- Rekhaben Chauhan, aged 44 years, is the Promoter of this company.
The company has posted great financials on the financial year 2016 where profitability has increased by more than 10 times. They have again almost doubled their profits next year. The PE ratio is around 20 while the peers are quoting at a PE of around 10. Hence, we feel the issue price of Rs. 40 per equity share is on the higher side. Hence, our Akshar Spintex Limited IPO Review has a NEUTRAL view on this issue. However, long-term investors can try to invest small quantity in ASL IPO if their risk appetite supports them.