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Avax Apparels And Ornaments IPO subscribed 26.50 times on Day 2. Check GMP and other details
Team Finance Saathi
08/Jan/2025
What's covered under the Article:
- Avax Apparels And Ornaments IPO offers a price band of ₹70 per share, with an issue size of ₹1.92 Crores.
- Grey Market Premium (GMP) of ₹23 indicates potential listing gains of 32.98%.
- Strong financial growth, with high ROCE and ROE, and a low P/E ratio make it an attractive IPO for risky investors.
Avax Apparels And Ornaments operates as a wholesale trader of knitted fabrics, specializing in the supply of materials for men’s and women’s jackets. They directly source from manufacturers and supply to businesses and ready-made garment manufacturers in Punjab. Additionally, the company has ventured into the online retail sector, offering a range of silver jewelry products such as rings, pajebs, kadas, plate sets, glassware, bangles, bowls, and chains, which are sold nationwide.
The Avax Apparels And Ornaments IPO is a fixed price issue of ₹1.92 Crores, consisting of a fresh issue of 2.74 lakh shares. The IPO opens on January 07, 2025, and closes on January 09, 2025, with the listing date set for January 14, 2025, on the BSE SME platform. The price band for the IPO is ₹70 per share, and the market capitalization at the IPO price is ₹7.27 Crores.
The lot size for the IPO is 2,000 shares, and the minimum investment for retail investors is ₹1,40,000. High-Net-Worth Individuals (HNIs) need to apply for a minimum of 2 lots (4,000 shares), totaling ₹2,80,000.
Subscription and Grey Market Premium (GMP):
As of January 05, 2025, the Grey Market Premium for the Avax Apparels And Ornaments IPO stands at ₹23, suggesting potential listing gains of 32.98%. This indicates strong demand for the IPO, reflecting investor confidence in the company’s growth potential.
Financial Performance and Valuation:
Avax Apparels And Ornaments has demonstrated consistent growth in its financial performance. The revenues from operations for the period ending September 30, 2024, stood at ₹1,500.93 lakh, showing an increase compared to ₹1,470.21 lakh in the previous year, marking a steady upward trajectory.
- EBITDA for FY2024 is ₹145.20 lakh, which has grown significantly from ₹99.22 lakh in FY2023, highlighting the company's ability to improve profitability.
- Profit After Tax (PAT) for the period ending September 30, 2024, is ₹90.61 lakh, marking a strong increase compared to ₹69.44 lakh in FY2023, reflecting healthy growth.
Key financial indicators show:
- Pre-issue EPS of ₹18.06 and post-issue EPS of ₹13.30 for FY24.
- Pre-issue P/E ratio of 3.88x and post-issue P/E ratio of 5.26x, significantly lower than the industry P/E ratio of 90x.
- Return on Capital Employed (ROCE) for FY24 is 61.68%, and Return on Equity (ROE) is 43.91%, suggesting excellent returns on investments and efficient capital utilization.
Investment Recommendation:
The Avax Apparels And Ornaments IPO appears to be fairly priced, with strong financial performance and solid growth prospects in both the knitted fabric trade and silver jewelry retail sectors. The GMP of ₹23 indicates good listing gain potential of 32.98%, making it an attractive opportunity for risk-tolerant investors looking for short-term gains.
With a low P/E ratio, strong ROE, and consistent financial growth, this IPO stands out as an appealing option for investors interested in a fairly priced investment with potential for substantial listing gains.
The Upcoming IPOs in this week and coming weeks are Sat Kartar Shopping,Barflex Polyfilms.