UNITED COTFAB IPO Review

UNITED COTFAB LIMITED is a manufacturer of high-quality open-end yarn for the textile industry. The company's clients include textile manufacturers, garment exporters and distributors. The company's product portfolio includes Open End Cotton Yarn and Cotton Yarn.

United Cotfab is promoted by Mr. Nirmalkumar Mangalchand Mittal and Mr. Gagan Nirmalkumar Mittal and they have a combined experience of more than 55 years in the field of cotton textile industry since 1983.

United Cotfab has operated full year in FY2024 only and has shown stellar performance in that year. The company has reported revenue of ₹ 115 Crore and Profit of ₹ 8.6 Crore. The company have generated good returns on Capital Employed at 26.95% and Return on Equity at 72.76%. RonW of the company is 63.89%.

For the IPO,United Cotfab is issuing shares at a pre-issue EPS of Rs. 7.97 and a post-issue EPS of Rs. 5.04. The pre-issue P/E ratio is 8.78, while the post-issue P/E ratio is 13.88 against the industry P/E ratio of 26. These metrics suggest that the IPO is fairly priced.

The Grey Market Premium (GMP) indicates potential listing gains of 15% - 30%. Given the company's steady financial performance and the valuation of the IPO, we recommend only Risky Investors to apply in the IPO for small listing gains and long term investors can also invest now or post debut in share market.