UNITED COTFAB IPO Review - Issue Date, Price, GMP, Allotment, Lot Size, and Details

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 LIMITED, a Fixed Price issue amounting to Rs 36.28 crores, consisting entirely of a fresh issue of 51.84 lakh shares. The subscription period for the IPO opens on June 13, 2024, and closes on June 19, 2024. The allotment is expected to be finalized on THURSDAY, JUNE 20, 2024, and the shares will be listed on the BSE SME with a tentative listing date set for MONDAY, JUNE 24, 2024.

The price is set at ₹70 per share, with a minimum lot size of 2000 shares. Retail investors are required to invest a minimum of ₹140,000, while the minimum investment for High-Net-Worth Individuals (HNIs) is 2 lots (4000 shares), amounting to ₹280,000.

Beeline Capital Advisors Private Limited is the book-running lead manager, Purva Sharegistry (India) Private Limited is the registrar. Spread X Securities Private Limited is also the market maker for the United Cotfab IPO.

Grey Market Premium (GMP) of United Cotfab Limited

The Grey Market Premium is expected in the range of Rs 11 - Rs. 21 based on the financial performance of the company. No real trading is done on the basis of Grey Market Premium that's why no real discovery of price can be done before the listing of shares on the stock exchange. The Grey Market Premium totally depends upon the Demand and Supply of the shares of the company in unorganized manner which is not recommended. The Grey Market Premium is mentioned for educational and informational purposes only.

Objectives of United Cotfab Limited

United Cotfab Issue Proceeds from the Fresh Issue will be utilized towards the following objects:
1. To Meet Working Capital Requirements
2. General Corporate Purposes

Refer to UNITED COTFAB RHP for more details about the Company.

UNITED COTFAB IPO Details

IPO Date June 13, 2024 to June 19, 2024
Listing Date June 24, 2024
Face Value ₹10
Price ₹70 per share
Lot Size 2000 Shares
Total Issue Size 5184000 Equity Shares (aggregating to ₹36.28 Cr)
Fresh Issue 5184000 Equity Shares (aggregating to ₹36.28 Cr)
Offer for Sale Nil
Issue Type Fixed Price Issue IPO
Listing At BSE SME
Share holding pre issue 1,20,06,000
Share holding post issue 1,71,90,000

UNITED COTFAB IPO Lot Size

Application Lots Shares Amount
Retail (Min) 1 2000 ₹140,000
Retail (Max) 1 2000 ₹140,000
HNI (Min) 2 4000 ₹280,000

UNITED COTFAB IPO Timeline (Tentative Schedule)

IPO Open Date THURSDAY, JUNE 13, 2024
IPO Close Date WEDNESDAY, JUNE 19, 2024
Basis of Allotment THURSDAY, JUNE 20, 2024
Initiation of Refunds FRIDAY, JUNE 21, 2024
Credit of Shares to Demat FRIDAY, JUNE 21, 2024
Listing Date MONDAY, JUNE 24, 2024
Cut-off time for UPI mandate confirmation 5 PM on WEDNESDAY, JUNE 19, 2024

UNITED COTFAB IPO Reservation

Investor Category Shares Offered Reservation %
Retail Shares Offered 24,62,000 50% of the Net Issue
Non-Retail Shares Offered 24,62,000 50% of the Net Issue
Market Maker Portion 260,000 -

UNITED COTFAB IPO Promoter Holding

Share Holding Pre Issue 99.99
Share Holding Post Issue 69.84

About UNITED COTFAB Limited

United Cotfab Limited (Formerly Known as the United Cotfab LLP and United Cotfab Private Limited) operating since 2015 in the Textile Industry in Ahmedabad, Gujarat. They are engaged in the manufacturing of high-quality open end yarn, catering to the textile industry. With a strong focus on innovation, quality, and customer satisfaction, they have established themselves as a trusted name in the market. Their state-of-the-art manufacturing facility and dedicated team ensure that they deliver exceptional products to meet the diverse needs of their clients. 

Their vision is to be recognized as a preferred supplier of open end yarn, known for their commitment to excellence, sustainable practices, and customer-centric approach. They strive to contribute to the growth and success of their clients by providing them with reliable and superior-quality products.

The company have over 25 years of working experience and have sold over 50 of their products to more than 325 trusted & satisfied clients. Notable trusted clients are as follows, Jindal, Anubha, aarbhee, Pratap Group, JRD Denims Ltd., Sangam & E-LAND APPAREL.

TEXTILE SECTOR IN INDIAN INDUSTRY

▪ India is the world’s second-largest producer of textiles and garments. India is the world's 3rd largest exporter of Textiles and Apparel.
▪ The textiles and apparel industry contributes 2.3% to the country’s GDP, 13% to industrial production and 12% to exports.
▪ The textile industry has around 45 million workers employed in the textiles sector, including 3.5 million handloom workers.
India’s textile and apparel exports (including handicrafts) stood at US$ 44.4 billion in FY22, a 41% increase YoY and Total textile exports are expected to reach US$ 65 billion by FY26.
▪ The Indian textile and apparel industry is expected to grow at 10% CAGR from 2019-20 to reach US$ 190 billion by 2025-26.
▪ The Rs. 10,683 crore (US$ 1.44 billion) PLI scheme is expected to be a major boost for textile manufacturers. The scheme proposes to incentivise MMF (man-made fibre) apparel, MMF fabrics and 10 segments of technical textiles products.
▪ Mr. Piyush Goyal discussed the roadmap to achieve the target of US$ 250 billion in textiles production and US$ 100 billion in exports by 2030.

UNITED COTFAB LIMITED STRENGTHS & STRATEGIES

1. Cost Effective Manufacturing Process
2. Entering into new geographies
3. Maintaining strong relationship with customers
4. Optimum Utilization of Resources
5. Experienced Promoters
6. Location advantage of our manufacturing facility
7. Scalable Business Model

UNITED COTFAB LIMITED RISK FACTORS & CONCERNS

1. Company's revenues are highly dependent on their operations in geographical region of state of Gujarat & Maharashtra.
2. The Company is dependent and will continue to depend on their manufacturing facilities.
3. Company requires deployment of labour and depend on availability of labour.
4. The Comapny may face foreign exchange risks that could adversely affect their results of operations and cash flows.
5. Any future issuance of their Equity Shares may dilute prospective investors’ shareholding, and sales of their Equity Shares by their major shareholders.
6. Company's lenders have charge over their movable and immovable properties in respect of finance availed by them.

UNITED COTFAB Limited Financial Information (Restated Consolidated)

Amount in (₹ in Lakhs)

Period Ended Mar 31, 2024 Mar 31, 2023 Mar 31, 2022 Mar 31, 2021
Reserve of Surplus 188.10 - - -
Total Assets 8168.46 5,367.71 1,559.95 107.10
Total Borrowings 4750.93 3821.18 773.47 106.50
Fixed Assets 4461.00 3800.25 359.88 -
Cash 0.07 1.09 15.81 20.58
Net Borrowing 4750.86 3820.09 757.66 85.92
Revenue 11,529.41 44.20 - -
EBITDA 1790.94 20.98 1.60 0.11
PAT 866.65 13.93 1.60 0.11
EPS 7.97 0.14 0.02 0.00

Note 1:- ROCE, ROE is calculation is based on 31st Mar, 2024 Data.
Note 2:- EPS is based on 31st Mar, 2024 Data.

Key Performance Indicator

KPI Values
EPS Pre IPO (Rs.) ₹ 7.97
EPS Post IPO (Rs.) ₹ 5.04
P/E Pre IPO 8.78
P/E Post IPO 13.88
ROE 72.76%
ROCE 26.95%
P/BV 2.41
Debt/Equity 3.42
RoNW 63.89%

UNITED COTFAB Limited IPO Peer Comparison

Company Name EPS ROCE ROE P/E (x) P/Bv Debt/Equity RoNW (%)
United Cotfab Ltd ₹ 5.04 26.95% 72.76% 13.88 2.41 3.42 63.89%
Lagnam Spintex Ltd ₹ 8.25 9.43% 14.3% 15.8 2.11 3.47 9.43%
PBM Polytex Ltd ₹ -9.38 -6.59 % -5.32 % - 0.48 0.01 -6.59 %
Vippy Spinpro Ltd ₹ 7.41 7.36 % 5.90 % 22.9 1.31 0.82 7.36 %
UNITED COTFAB Limited Contact Details

UNITED COTFAB LIMITED

Survey No. 191, Village-Timba, Taluka-Dascroi, Timba, Ahmedabad, Dascroi -382425, Gujarat, India
Contact Person : Ms. Muskan Kashyap
Tele No. : +91 9879874955
Email Id : info@unitedcotfab.com
Websitehttps://www.unitedcotfab.com/index.html#

UNITED COTFAB IPO Registrar and Lead Manager(s)

Lead Manager - Beeline Capital Advisors Private Limited
Email : mb@beelinemb.com
Tel. No. : 079 4918 5784
Website : https://beelinemb.com/

Registrar - PURVA SHAREGISTRY (INDIA) PRIVATE LIMITED
Tele No. : +91 022 4961 4132 / 3199 8810
Email ID : support@purvashare.com
Websitehttps://www.purvashare.com/

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. 

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