The recent news report churned down the dreams of the investors by calling IPO as a faded market. There are reports that the companies are delaying their IPO offers by a few months due to fall in the market demand and changes in the accounting system. But a ray of hope emerged when Akshar Spintex IPO promised to join the bandwagon list. The upcoming IPO of Akshar Spintex Limited gives an investor a reason to stay glued to the primary market.
A sneak peek
Started in the year 2013, Akshar Spintex is a Gujarat based venture that specializes in manufacturing cotton yarn. The company manufactures 100% cotton yarn which includes combed, semi-combed and carded yarn. The company has a total capacity of 24,480 spindles. The end users of the company products are textile manufacturers and traders.
Purpose of IPO?
The company is planning to raise the IPO worth Rs 3.39 crore to fund the working capital requirements of the company and to meet the general corporate purpose.
Fund Utilization
| Particulars | Amount (Rs. in Crores) |
| Working Capital requirements | 2.8 |
| General Corporate Expenses | 0.89 |
| Net Proceeds | 3.99 cr |
Akshar Spintex IPO Details
The company is planning to raise an an IPO offer of 67, 47,000 equity shares valued @Rs 10 each for cash at a price of Rs 40 per equity share, aggregating to Rs 26,699 crore, including the fresh issue of 9, 99,000 equity share total aggregating to Rs 4 crores and an offer for sale includes 57, 48,000 equity shares aggregating to Rs 22.99 crore along with the fresh issue.
The promoter of the company includes Ashok Bhalala, Amit Gadhiya and Harikrishna Chauhan and Rekhaben. They will hold around 65, 00,100 equity shares representing 27% of the pre-issue share capital. Here are the tabulated details for the same.
| Details | Info |
| Issue Opens on | 27th April 2018 |
| Issue Closes on:. | 3rd May 2018 |
| Issue Price | Rs.40 |
| Face Value | Rs.10 |
| Minimum Lot | 3000 |
| Minimum Investment | Rs.1,20,000 |
| Issue Constitutes | 26.98% |
| Issue Size | Rs.26.98 cr |
| Market Cap | Rs.99.99 cr |
| Listing at | BSE SME |
| Equity Shares Offered (Fresh) | 9,99,000 |
| Equity Shares Offered (OFS) | 57,48,000 |
| Total Equity Shares Offered (Fresh + OFS) | 67,47,000 |
| Equity Shares Prior to the Issue | 2,40,00,000 |
| Equity Shares after the Issue | 2,49,99,000 |
Financial health of the company
The company revenue in the last three years has grown though it has witnessed a setback in the year October 2017, but it is believed that the company will bounce back. Its EPS has been registered to 2.24%, price to earnings ratio 17.86%, return on net worth ratio 17.08%, and NAV 13.14.
| Rs. in Crore | |||||
| – | 2015 | 2016 | 2017 | 2018 (7M) | |
| Revenues | – | 15.62 | 59.84 | 90.39 | 55.60 |
| Expenses | – | 15.37 | 56.37 | 84.21 | 49.93 |
| PAT | – | (0.51) | 2.67 | 5.39 | 2.79 |
Should the investors invest in this IPO?
The company has a good growth trajectory. Its growing profit strengthens our belief in the fact that the company has a good future ahead. Moreover, the government is paying a strong impetus to the textile sector with a reason to improve the job scenario and is launching different schemes to expand the sector. Going by this, we can safely say that there is no reason to worry, but the investor should consider Akshar Spintex IPO for a long-term.
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