About Piotex Industries Limited

The company is engaged mainly in 2 activities:

1. Trading of Cotton Bales, Synthetic Fiber, Cotton Yarn and Fabric: The company was established in Oct 2019, and till then the company has started trading business of Cotton Bales and Cotton Yarn in the textile hub of Maharashtra viz. Malegaon, Ichalkaranji and Bhiwandi. Also company supply the cotton yarn to Burhanpur and Ahmedabad. This business is already going on day to day, and also added fabric trading business from 2022-23. Also the Company has a Sole Selling Agency agreement with Babasaheb Deshmukh Industries Private Limited for their finished product i.e. Cotton Yarn.
2. In the same way the company started manufacturing through job work and Fabric Weaving job in which company provides the Yarn to job workers and weaving unit and they do the process of weaving on contracted charges and return the finished goods. The finished goods i.e. Fabric is then sold to customers.

The company focuses in high quality yarn and fabrics utilizing the best technology, at the most competitive prices and maintaining long term association with its clients. The level of advancement in job work process determines the productivity of machines and labour, which in turn determines the production and profitability of the Company.

The Indian textile and apparel industry is expected to grow at 10% CAGR from 2019-20 to reach US$ 190 billion by 2025-26. India has a 4% share of the global trade in textiles and apparel.

India is the world’s largest producer of cotton. Estimated production stood at 362.18 lakh bales during cotton season 2021-22 projecting to reach 7.2 million tonnes by 2030, driven by increasing demand from consumers. In FY23, exports of readymade garments (RMG) cotton including accessories stood at US$ 7.68 billion till January 2023. It is expected to surpass US$ 30 billion by 2027, with an estimated 4.6-4.9% share globally.

Production of fibre in India reached 2.40 MT in FY21 (till January 2021), while for yarn, the production stood at 4,762 million kgs during the same period. Natural fibres are regarded as the backbone of the Indian textile industry, which is expected to grow from US$138 billion to US$195 billion by 2025.

Risk associated to the issue:

• Dependency on vendors and no manufacturing facilities: The company is dependent on third parties for the manufacturing of its products and maintenance of adequate inventory to ensure procuring products based on supply necessities. Company has entered into Sole selling and Job work Agreements with the various spinning units for manufacturing and trading the products.
• High competition: The company faces high competition from existing players and potential entrants in the Indian textile industry. The Indian textile industry is highly competitive both in the cotton yarn and cotton knitted fabrics.
• Top ten customers: Top 10 customers contributes approximately 98% of revenue.
• Top ten suppliers: Top 10 suppliers contributed approximately 60% of total purchases. Suppliers may vary from period to period depending on the demand-supply mechanism and thus the supply process from these suppliers might change as they continue to seek more cost effective suppliers in normal course of business.
• High working capital requirements: business requires significant amount of working capital and major portion of working capital is utilized towards inventories and trade receivables.