A manufacturer of copper cables and wires. The company primarily focuses on manufacturing different types of copper cables which finds application in Transformers. The product portfolio consists of Copper Strips, Paper Covered Copper Strips and Wires (Kraft/Crepe/Nomex/Mica), multi-paper-covered copper conductors, Bare Copper Wires and Strips, copper submersible wires, Copper Tapes and Fiber Glass Copper.
The company majorly supply its products to the transformer manufacturing companies in India. Since the promoters have been in the industry since 2008 leads them to healthy relations in the industry.
The company has 3 manufacturing units, 1) Odhav, Ahmedabad 2) Kubadthal, Ahmedabad and 3) Waghodia, Vadodara. Having a combined installed capacity of 5,868 MT for manufacturing bare Copper wire & Strips, 1,404 MT for Paper Covered Copper Strips & wire, 1,512 MT for Cable Wires, 5,760 MT for Copper Rods, 10,080 MT for Copper Flats, 972 MT for Submersible Wires and 540 MT for Fiber Glass Covered Copper Strips.
But the company is in the process of setting up a new manufacturing plant (8308 sq. mtrs) at Bhayala, Bavla, Gujarat, to increase manufacturing capabilities. The aim of the company is to consolidate all the 3-manufacturing unit at one place.
Manufacturing is emerging as an integral pillar in the country’s economic growth, thanks to the performance of key sectors like automotive, engineering, chemicals, pharmaceuticals, and consumer durables. The Indian manufacturing industry generated 16-17% of India’s GDP pre-pandemic and is projected to be one of the fastest growing sectors.
Manufacturing exports have registered highest ever annual exports of US$ 447.46 billion with 6.03% growth during FY23 surpassing the previous year (FY22) record exports of US$ 422 billion. India has the capacity to export goods worth US$ 1 trillion by 2030 and is on the road to becoming a major global manufacturing hub. With 17% of the nation’s GDP and over 27.3 million workers, the manufacturing sector plays a significant role in the Indian economy.
The manufacturing sector of India has the potential to reach US$ 1 trillion by 2025. The implementation of the Goods and Services Tax (GST) will make India a common market with a GDP of US$ 3.4 trillion along with a population of 1.48 billion people, which will be a big draw for investors.
India has very limited known reserves of copper ore exploitable for copper production. The total resources of copper ore in the country as on 1.4.2015 are estimated at 1511.50 million tonnes with about 12.16 million tonnes of copper metal. Demand of copper is increasing due to progress of implementation of electric vehicle worldwide with associated charging infrastructure, decarbonization policy push by US and EU and more and more emphasis on green energy to mitigate climate change. Copper being the green metal has been considered as a core driver for moving the global economy toward net zero emissions. Copper has been termed as new oil.
Risk to the issue:
Dealer finance SG Finserve Limited of Rs. 300 lacs: State Bank of India had sanctioned the working capital limit of Rs 1500.00 lacs and as part of primary security the entire current assets of the Company. But now the company has raised another Rs. 300 Lakhs from SG Finserve without the approval from State Bank of India. The bank may recall the entire working capital loan and term loan from the Company for breaching the terms and conditions of the bank insisting for closure of the loan account with SGFL.
2 factories are on rental basis: Factory at Kubadthal and Waghodia are on leases basis. Kubadthal factory is on lease bases for a period of 11 months and 29 days w.e.f. April 01, 2023 and Waghodia factory is taken on lease basis for a period of Seven years w.e.f. September 01, 2022. Company has applied for the Factory licenses for Our Waghodia factory in the month of October, 2023.
Limited number of suppliers & Customers: Top 10 suppliers hold 98.81% share in raw materials in the sub period ended on 29th Feb’24. Otherwise 80%-90% share is held by the top 10 suppliers. The same is with customers. Top 10 customers hold 75.79% share in revenue for the sub period ended on 29th Feb’24, which was 81.92% in FY23.
No intellectual property rights over corporate logo: The same is not registered with the Trade Marks and patents Authority. The company have applied for registration of the same with the Trade Marks and patents Authority.
Third party transportation service: The company is dependent on third party transportation service providers for the delivery of raw material to company from suppliers and delivery of its finished products to the customers. Uncertainties and risks can affect the business.
Operations are limited to the state of Gujarat: The revenue from Gujarat is 100%, 99.98%, 95.00% and 95.23% in the FY21, FY22, FY23 and for the stub period ended on February 29, 2024 respectively. Looking to the good quality of products, company will be able to sale entire production within Gujarat.
Volatility in raw material prices: Copper is the basic and one of the major raw materials for manufacturing process. The copper prices are being governed by the international forces. Prices prevailing at Landon Metal Exchange is one of the effective key factors affecting the prices of copper i.e. the raw materials required by company.
High working capital requirements in competitive business environment: Company is subject to high working capital requirements and inability to fund these requirements in a timely manner may adversely impact its financial performance. Growing competition in the domestic market from domestic organized and unorganized players and/or the international players, makes the company subject to pricing pressures and require them to reduce the prices of products to retain the existing customers and/or attract new customers, which may have a material adverse effect on revenues and margins.
Labor-intensive industry and continuous need of power and fuel: During monsoon season, a majority of our labor force go to their hometowns/villages to assist their families in farming and harvesting of crops, resulting in a temporary labor shortage which may affect the production in manufacturing facilities. It also require substantial power and fuel for manufacturing facilities, and energy costs represent a significant portion of the production costs for operations.
1. Aadhaar and PAN Card of the taxpayer and the company
2. Bank Statements of the taxpayer/company/firm
3.Form 26AS: It is a summary of all the taxes that have been deducted from your income, such as TDS (Tax Deducted at Source).
4. Form 16: It is issued by your employer, which gives the details about the total salary + TDS deducted from it.
5. Investment and financial documents: If you have invested in shares, mutual funds, or fixed deposits, dividend statements, capital gains reports (if you have sold any assets), and interest certificates need to be attached.
6. Proof of other income: Other than your salary, if you have earned from different sources, such as from freelance work, rental income, or interest, you need to attach the documents, such as bonus receipts, interest certificates, rental agreements, and any freelance payment statements, to prove the same.
7. Deductions and tax-saving investments: To claim deductions under sections 80C - for investments in PPF, ELSS, etc., 80D - for insurance premiums, or 80G for the charitable donations, you need to attach the documents to prove the same.
8. Form 10E (If Applicable): If you have received salary arrears or any special bonuses, then you need to attach the Form 10E - it is used to claim tax relief for those payments under section 89(1) of the Income Tax Act, 1961.
9. TDS Certificates: If you have earned income from sources other than your salary, such as rent, interest, or professional fees, then your TDS might have TDS deducted. In this case, you need to attach the TDS certificates from those sources to show that tax has been deducted and deposited with the government.
10. Details of Foreign Income (If Applicable): If you have earned from abroad or own foreign assets, you need to disclose all the information in your ITR. Documents such as foreign bank statements, income certificates, or details of foreign investment are necessary to report this income correctly.
1. Aadhaar and PAN Card of the taxpayer and the company
2. Bank Statements of the taxpayer/company/firm
3.Form 26AS: It is a summary of all the taxes that have been deducted from your income, such as TDS (Tax Deducted at Source).
4. Form 16: It is issued by your employer, which gives the details about the total salary + TDS deducted from it.
5. Investment and financial documents: If you have invested in shares, mutual funds, or fixed deposits, dividend statements, capital gains reports (if you have sold any assets), and interest certificates need to be attached.
6. Proof of other income: Other than your salary, if you have earned from different sources, such as from freelance work, rental income, or interest, you need to attach the documents, such as bonus receipts, interest certificates, rental agreements, and any freelance payment statements, to prove the same.
7. Deductions and tax-saving investments: To claim deductions under sections 80C - for investments in PPF, ELSS, etc., 80D - for insurance premiums, or 80G for the charitable donations, you need to attach the documents to prove the same.
8. Form 10E (If Applicable): If you have received salary arrears or any special bonuses, then you need to attach the Form 10E - it is used to claim tax relief for those payments under section 89(1) of the Income Tax Act, 1961.
9. TDS Certificates: If you have earned income from sources other than your salary, such as rent, interest, or professional fees, then your TDS might have TDS deducted. In this case, you need to attach the TDS certificates from those sources to show that tax has been deducted and deposited with the government.
10. Details of Foreign Income (If Applicable): If you have earned from abroad or own foreign assets, you need to disclose all the information in your ITR. Documents such as foreign bank statements, income certificates, or details of foreign investment are necessary to report this income correctly.
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