Avax Apparels and Ornaments is a company specializing in the wholesale trade of knitted fabric, catering primarily to businesses and ready-made garment manufacturers in Punjab. Their expertise lies in supplying knitted textiles for producing both men's and women's jackets. Alongside this, the company also operates in the online retail sector, offering a wide range of silver jewelry, including silver rings, ladies' pajeb, gents' kada, plate sets, glassware, bangles, bowls, chains, and more. These products are available for supply to major cities across India, positioning the company as a versatile player in both the textile and jewelry markets.

Avax Apparels and Ornaments IPO Details

The Avax Apparels and Ornaments IPO is a Fixed Price Issue amounting to ₹1.92 crores, with 2.74 lakh shares being offered in the fresh issue. The IPO opens on January 7, 2025, and closes on January 9, 2025. The allotment date is set for January 10, 2025, and the listing is expected on January 14, 2025, on the BSE SME platform.

The share price for this IPO is fixed at ₹70 per equity share, giving the company a market capitalization of ₹7.27 crores at the IPO price. The lot size is 2,000 shares, with a minimum investment requirement of ₹1,40,000 for retail investors, and a minimum of ₹2,80,000 for High-Net-Worth Individuals (HNIs), who need to apply for two lots (4,000 shares).

Subscription Status and Grey Market Premium (GMP)

As of January 9, 2025, at 11:10 AM, the IPO has been subscribed 107.55 times on its final day of subscription, indicating strong investor interest. The Grey Market Premium (GMP) for this IPO is currently ₹11, representing a potential listing gain of 15.71% at the expected listing price of ₹93.

The GMP trend has shown fluctuations, with a ₹23 GMP on January 5, 2025, suggesting an initial investor enthusiasm. The IPO’s GMP trend can provide insights into investor demand but is often considered speculative and should not be the sole basis for investment decisions.

Financial Performance and Valuation

The financial performance of Avax Apparels and Ornaments demonstrates steady growth. For the fiscal year ending September 30, 2024, the company reported revenues of ₹1,500.93 lakh, marking growth compared to ₹1,470.21 lakh in the previous fiscal year. The EBITDA for the same period was ₹145.20 lakh, while the Profit After Tax (PAT) stood at ₹90.61 lakh.

Key performance metrics for FY24 include:

• Pre-issue EPS of ₹18.06
• Post-issue EPS of ₹13.30
• Pre-issue P/E ratio of 3.88x
• Post-issue P/E ratio of 5.26x
• The Industry P/E ratio stands at 90x, highlighting that the IPO is reasonably priced when compared to the broader industry.

The Return on Capital Employed (ROCE) is an impressive 61.68%, and the Return on Equity (ROE) stands at 43.91%, demonstrating strong profitability and efficiency.

Investment Recommendation

Based on the financial performance, valuation, and GMP trends, the Avax Apparels and Ornaments IPO is deemed fairly priced. The company’s steady growth and attractive financial ratios make it an attractive investment for risk-tolerant investors, particularly those looking for listing gains.

However, investors must keep in mind the inherent risks of the Grey Market Premium and the lack of formal trading data. Therefore, while there is a potential for listing gains, it is essential to evaluate the risks involved, especially given the IPO’s smaller size and the speculative nature of the GMP.

In conclusion, riskier investors may consider applying for the IPO, given the potential for listing gains and reasonable valuation, but a careful approach is advised.

How to Check Allotment Status

Investors can easily check the Avax Apparels and Ornaments IPO allotment status starting from January 10, 2025, by following these simple steps:

1. Visit the official Registrar’s website for IPO allotment status.
2. Select Avax Apparels and Ornaments IPO from the dropdown list.
3. Enter application number, PAN, or DP Client ID to check the status.

By following these steps, investors can determine if they have been allotted shares and proceed with any further actions.

Objectives of the IPO

The funds raised through the IPO will be utilized for the following purposes:

1. ₹150 lakh will be used to meet the working capital requirements.
2. ₹21.80 lakh will be used for general corporate purposes.

This funding structure aims to support the company’s operational needs and help fuel its future growth.

Conclusion

In summary, the Avax Apparels and Ornaments IPO presents an exciting opportunity for investors looking to tap into the growing sectors of wholesale textiles and silver jewelry. With strong financials, a reasonably priced offering, and the potential for listing gains, it offers an appealing option for risk-tolerant investors looking to benefit from listing price appreciation. However, as always, investors should assess their risk appetite and consider the speculative nature of GMP trends before applying.

The Upcoming IPOs in this week and coming weeks are Sat Kartar Shopping,Barflex Polyfilms and Laxmi Dental.

The Current active IPO are Standard Glass Lining, Quadrant Future, Capital Infra Trust, Delta Autocorp, Avax Apparels, B R Goyal.