Axita Cotton Limited IPO
The Company is founded by Mr. Nitin Patel & Kushal Patel. They are engaged in manufacturing & export of best quality cotton bales & cotton seeds. They are professionally managed company having large network and infrastructure in the home company is equipped with state-of-art infrastructure backed by the large and fully automatic plant for cotton to cotton bales.
Having in-depth knowledge of this business help them in delivering optimum result in specified business challenges apart from global computation with their futurist approach. This yields overall increases in turnover of company to supply good quality cotton word wide.
Axita cotton Pvt Ltd is located at kadi District – mehsana (-Gujarat, India). The company is spread over 12000 square yards and equipped by the latest machinery & technology for ginning and pressing cotton. They have more than 48 double roller ginning machine, latest Ginning machinery, approved by the government of India ministry of textiles through TUF project Using all of this machinery and paying more hard-work the company is now able to GIN 250000 Kg. of Raw Cotton per day. The company is also able to produce more than 500 cotton bales(170Kg) per day.
Objects of the Axita Cotton Limited IPO:
Axita Cotton Limited IPO Details:
Open Date: | Dec 27 2018 |
Close Date: | Jan 02 2019 |
Total Shares: | 1,752,000 |
Face Value: | ₹ 10 Per Equity Share |
Issue Type: | Fixed Price IPO |
Issue Size: | 10.51 Cr. |
Lot Size: | 2000 Shares |
Issue Price: | ₹ 60 Per Equity Share |
Listing At: | BSE SME |
Listing Date: | Jan 10 2019 |
Promoters And Management:
Financials of Axita Cotton Limited IPO:
Particulars | For the year/period ended (in Rs Lacs) | ||||
30-June-2018 | 31-Mar-18 | 31-Mar-17 | 31-Mar-16 | 31-Mar-15 | |
Total Assets | 2,556.03 | 2,229.49 | 1,750.51 | 1,387.41 | 1,330.79 |
Total Revenue | 2,121.59 | 12,392.36 | 9,152.24 | 6,875.95 | 7,705.35 |
Profit After Tax | 32.60 | 82.13 | 2.71 | 12.46 | (28.51) |
Recommendation on Axita Cotton Limited IPO:
Lead Manager of Axita Cotton Limited IPO:
Registrar of Axita Cotton Limited IPO:
Company Address:
Bid Details of Axita Cotton Limited IPO as on
02 Jan 2019 | 11:58:01 PM
Category | No.of shares offered | No. of shares bid |
---|---|---|
830,000 | 1,994,000 | |
830,000 | 1,288,000 | |
92,000 | 92,000 | |
1,752,000 | 3,374,000 |
QIBs | No |
QIBs+HNIs Subscription | 2.40X |
Retail Subscription | 1.55X |
Total Subscription | 1.98X |
Discussion on Axita Cotton Limited IPO:
8 Comments
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Avoid .There is Not even a single textile or yarn company to retain above issue price. Lagnam spintex. Akshar spintex. Angel fiber. Sri ram protein. Even the recent one shubham textile
I am not sure what prints lm to come up with such issues. Not sure about listing day price buy Long term it’s definitely a avoid.
EPS is 1.25 there fore according to me fairvalue ₹ 7 to 10 only.
The major portion of the revenue of the company is derived from the sales made to Axita Exports Private Limited and Aditya Oil Industries (Group Company/Entity). Both the companies are Group companies, so they do not have any major revenue generated client other than group companies.
Let us see the valuation of the company:
1. Total Outstanding Shares Post issue would be = 65.52 lakhs
2. PAT for FY18= 82 lakh
3. EPS= 1.25
4. P/E = 48( Very High)
5. Mcap= 39.31 Cr
6. Sales of FY18= 123 Cr
7. Mcap/Sales= 0.32( reasonable)
8. EV= 56 Cr
9. EBITDA= 3.44 Cr
10. EV/EBITDA= 16.27( Very High).
Conclusion: The Valuation in terms of P/E and EV/EBITDA is very steep.
1. FY15
EBITDA Margins= 2.03%
PAT Margins= Negative( Due to loss)
ROE= Negative
2. FY16
EBITDA Margins= 2.89%
PAT Margins= 0.18%
ROE= 5.19%
3. FY17
EBITDA Margins= 1.90%
PAT Margins= 0.02%
ROE= 1.11%
4. FY18
EBITDA Margins= 2.77
PAT Margins = 0.66%
ROE=25%
ROE(Post Issue)= 4.68%
Conclusion: The Company has very low and inconsitent EBITDA and PAT margins in the last 4 years. The ROE of the business is just below 6 % in the last 4 years which is also very low. The ROE should be atleast more than risk free return of 8% in FD else why would anybody invest in the company.
Superb analysis.
Where do you get all the figures?
Is it from outside this website?
Calculated by using the Balance sheet and Profit n loss statements given in the DRHP by the company.
D/E Calculation based upon the time frame
A. On 30.06.2018:
Debt= 15.98 Cr
Equity= 3.55 Cr
D/E= 4.50(High)
B. On 25.09.2018
They have issued 23 lakhs shares via Right Issue at Rs. 15. So total equity 3.55 Cr + 23*15= 7 Cr.
Debt = 15.98 Cr
Equity= 7 Cr
D/E= 2.28
C. The company is coming up with an IPO of 17,52,000 Shares at a Price of Rs.60
Equity post issue will be = 17.52*60+7 Cr= 17.512 Cr
Debt= 15.98 Cr
D/E= 0.91
Conclusion: This is how the company has reduced its D/E from 4.50 to under 1.