Axita Cotton IPO Review (Date, Price, DRHP)

Axita Cotton IPO Review

Axita Cotton Limited is engaged in manufacturing and export of cotton bales and cotton seeds. It is mainly Gujarat based company. This company is a TUF approved by the textile ministry of India-Govt. of India. The article is going to reflect Axita Cotton IPO Review along with issue detail, objectives.

Axita Cotton Limited IPO Review Issue Details :

  • IPO Opens on – December 27, 2018.
  • IPO Closes on – January 02, 2018.
  • Face Value – Rs 10 Per Equity Share.
  • Issue Price – Rs 60 Per Equity Share.
  • Issue Type – Fixed Price Issue IPO.
  • Market Lot – 2000 shares.
  • Minimum Order Quantity – 2000 shares.
  • Issue Size – 1,752,000 Equity Shares of Rs 10 aggregating up to Rs 10.51 Cr.
  • Listing Exchange – BSE SME Exchange.
  • Draft Prospectus – Click Here.

Objectives of the issue of the Company :

  • Net Incremental Working Capital Requirement of this company.

About The Company –

  • Axita Cotton Limited is incorporated in 2013.
  • This company has installed 48 Ginning and Pressing machines which are having the capacity of processing 87,600 MT/Per annum of seed cotton.
  • The plant of Axita Cotton Limited is equipped with modern and automatic plant and machinery.
  • This company is producing cotton bales and cotton seeds.
  • Axita Cotton Limited is producing basically two varieties of cotton bales namely Shankar-6 and MCU-5/MECH.
  • The production facility of this company is situated at Kadi in Mahesana District of Gujarat state which is close to the rich cotton growing areas of Maharashtra, Saurashtra and other regions of Gujarat.
  • Axita Cotton Limited’s products are sold in the state of Gujarat, Rajasthan, Maharashtra and Madhya Pradesh.
  • This company is also engaged in the business of trading of Kapas, cotton bales and cotton seeds while ginning and pressing of Kapas on a job work basis.
  • Axita Cotton Limited started exporting products through merchandise exporters in 2015.
  • This company also commenced exporting its products directly to few countries namely Pakistan, Bangladesh, and Vietnam, from the Financial year 2016-2017 onwards.
  • Axita Cotton Limited has 23 employees in the various department.

Axita Cotton Limited

Location :

Axita Cotton Limited – Admin Office

“Noopur”, Flat No. 1,133, Azad Society,
Opposite Samay Apartment,
Ambavadi, Ahmedabad-380015
Gujarat, India.

Axita Cotton Limited – Factory Address

kadi thol raod,
village – borisana, kadi-382715,
district – mehsana,
state – Gujarat, India.

Axita Cotton Limited – Registered Office

B-303 Ashutosh avenue,
opp vasupujya tower,
naranpura,
Ahmedabad-380013,
Gujarat, India.

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The promoter of Axita Cotton Limited :

  • Mr. Nitinbhai Govindbhai Patel, aged 53 years is a Promoter Cum Managing Director of the Company.
  • Mr. Kushal Nitinbhai Patel, aged 29 years, is the Promoter Cum Managing Director of the company.
  • Mr. Amitkumar Govindbhai Patel, aged 49 years is a Promoter Cum Managing Director of this company.

The Board of Directors of this company :

  • Mr. Nitinbhai Govindbhai Patel, aged 53 years is a Promoter Cum Managing Director of the Company.
  • Mr. Kushal Nitinbhai Patel, aged 29 years, is the Promoter Cum Managing Director of the company.
  • Mr. Amitkumar Govindbhai Patel, aged 49 years is a Promoter Cum Managing Director of this company.
  • Mrs. Diptiben Hemantkumar Patel, aged 56 Years is an Independent Director of the Company.
  • Mr. Rakesh Mahendrakumar Patel, aged 49 Years is an Independent Director of the Company.
  • Mr. Dhruven Patel, aged 30 Years is an Independent Director of the Company.

Business Strategy of this company :

  • The main business strategy of Axita Cotton Limited is Inventory Level or Stocking of Goods.
  • Quality of this company’s products is the second business strategy of this company.
  • One of the strategies is the Optimal Utilization of Resources.
  • To build-up, a professional organization is another strategy of Axita Cotton Limited.
  • Continue to maintain strong relationships with their Customers. This is the main business strategy of this company.

Competitive Strengths of Axita Cotton Limited :

  • Location of the Factory (Production Unit) –

Axita Cotton Limited and factory is situated at the well-developed industrial area, with all the infrastructure facilities and both skilled and unskilled manpower are available at competitive cost. The factory location is near Kadi, which is
connected to state highway connecting Ahmedabad – Mehsana -Palanpur. There are many Ginning units at Kadi. All
infrastructure facilities like availability of skilled labor, raw material, technology, Communication, electricity,
transportation etc. are easily available due to extensive industrialization in the area.

  • An experienced management team of this company and a (motivated and efficient) workforce –

Axita Cotton Limited is managed by a team of experienced personnel having experience in different aspects of the cotton industry. This company believes that their qualified and experienced management has substantially contributed to the growth of their business operations.

  • Installed Capacity, Cost-effective production and timely fulfillment of orders –

Axita Cotton Limited is having installed capacity of processing 87600 MT/per annum of seed cotton. In FY 2017-18, This company is able to produce 6392.68 MT /per annum cotton bales and 10882.06 MT/per annum cotton seeds. Axita Cotton Limited has taken various steps in order to ensure adherence to timely fulfillment and also to achieve greater cost efficiency as timely fulfillment of the orders is a prerequisite in their industry.

  • Increase in Business scalability –

The focus on Axita Cotton Limited is maximum capacity utilization, developing linkages with quality raw material
suppliers and achieving consequent economies of scale. This company believes that this business model has proved successful and scalable for them in the last few financial years. Axita Cotton Limited can scale upward as per the requirement generated by this Company. The business scale generation is basically due to the increasing demand of the products, development of new markets and by adopting aggressive marketing of the product, innovation in the product range and by maintaining the consistent quality of the product.

SWOT Analysis of this company :

  • STRENGTHS –

  1. Installed Capacity of 87,600 MT or Annum.
  2. Locational Advantage.
  3. Increase in Business Scalability and Captive Consumption.
  • WEAKNESSES –

  1. Seasonal availability of our Finished product and Raw Material.
  2. Dependence on Suppliers for Products availability.
  • OPPORTUNITIES –

  1. Large Growth Potential
  2. Increasing Demand for the product in the international and Domestic Market.
  3. Government incentive for the growth of the textile sector.
  • THREATS –

  1. Market Competition.
  2. Changes in Market Trends or Demand.

Company Financials :

This is the most important part of the Axita Cotton IPO Review.

Axita Cotton IPO

Axita Cotton IPO Review:

Now, come to the Axita Cotton IPO Review part of the content. The above amounts reflect profit-loss of the company over the past years. The data displays that the company has gone through ups and down phase over the years. The performance shows that in the FY18 the company has gained maximum profit among the years. The first quarter of the FY18 also carries a good profitable record. Now, let’s have a look at the prospectus of the company, it reveals the fundamental ratios of the company. Basic and diluted EPS (Earnings Per Share) was at the level of 3.29 as per the FY18. P/E or price to earnings ratio stands at 18.26 (based on basic and diluted EPS). RoNW (Return on Net Worth) and NAV/Share are 25.97 and 26.65 respectively. Based on the information Axita Cotton IPO Review carries a NEUTRAL view.

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