Avi Ansh Textile Limited has been in the yarn sector since 2005 and has grown to become a manufacturer and exporter of 100% cotton yarn. By 2012, the company had an annual production capacity of 4,500MT with 26,314 spindles, focusing on both combed and carded cotton yarn in various counts. In 2024, the company has announced a fixed price issue IPO worth ₹25.99 crores, which consists of a fresh issue of 41.93 lakh shares.

The Avi Ansh Textile Limited IPO opens for subscription on September 20, 2024, and will close on September 24, 2024. This IPO will be listed on the NSE SME platform, with the allotment expected to be finalized by September 25, 2024, and the tentative listing date set for September 27, 2024.

The IPO share price is fixed at ₹62 per equity share, and retail investors must invest a minimum of ₹1,24,000 for one lot of 2,000 shares. On the other hand, High-Net-Worth Individuals (HNIs) are required to invest a minimum of ₹2,48,000 for two lots, amounting to 4,000 shares. The IPO is managed by 3Dimension Capital Services Limited, with Skyline Financial Services Private Limited serving as the registrar. Nikunj Stock Brokers Limited will act as the sole market maker for this issue.

Grey Market Premium (GMP) for the Avi Ansh Textile IPO has been fluctuating between ₹10 and ₹12, reflecting modest confidence in the stock ahead of its listing. Although the grey market can indicate potential price movements, it is important to remember that no real price discovery occurs until the shares are traded on the stock exchange. Hence, while the GMP may suggest a 15-20% listing gain, it should not be the sole basis for an investment decision.

The subscription status as of September 23, 2024, at 12:09 PM indicates that the IPO has been subscribed 2.39 times on its second day, reflecting strong interest from investors. Investors can check the live subscription status on the NSE website for real-time updates.

In terms of financials, Avi Ansh Textile has reported impressive growth, with revenues of ₹14,214.65 lakhs for FY2024, compared to ₹12,149.57 lakhs in FY2023, ₹12,016.76 lakhs in FY2022, and ₹7,264.30 lakhs in FY2021. The company's EBITDA has grown to ₹963.68 lakhs in FY2024, up from ₹455.54 lakhs in FY2023. However, the profit after tax (PAT) has fluctuated, standing at ₹331.35 lakhs in FY2024 after being just ₹28.74 lakhs in FY2023.

The company's pre-issue EPS is ₹3.39, with a post-issue EPS of ₹2.37. The pre-issue P/E ratio is 18.28x, and the post-issue P/E ratio is 26.16x, compared to the industry average of 28x. The return on capital employed (ROCE) for FY2024 is 15.88%, while the return on equity (ROE) stands at 20.88%, suggesting that the IPO is fairly priced.

IPO Objectives:

₹2011.94 lakhs will be used for working capital requirements.

₹394.76 lakhs will be directed towards term loan repayment.

₹56.29 lakhs will go towards general corporate purposes.

Investors can check their IPO allotment status on September 25, 2024, by visiting the registrar's website and selecting Avi Ansh Textiles Limited from the dropdown list. By entering either their application number, PAN, or DP Client ID, investors can quickly determine their allotment status.

In summary, while Avi Ansh Textile has shown strong growth in recent years, its post-issue P/E ratio suggests that the stock may be fully valued. Investors should consider the IPO's pricing and valuation carefully. Based on the current GMP, it may offer moderate listing gains, but long-term investment potential should be evaluated based on the company's ability to sustain its growth and maintain profitability in the competitive yarn sector.

Investors should note that all information provided here is for educational purposes only and does not constitute financial advice. Always conduct your own research or consult with a financial advisor before making any investment decisions.

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