(i) Rajasthan based Lagnam Spintex Limited was incorporated in 2010, Lagnam Spintex Limited is an ISO 9001:2015 certified Company engaged in the business of manufacturing of high quality open end yarnfor domestic and export market ranging from count Ne 4 to Ne 20 which is used in Denim, Terry Towels, Bottom Wears,Home Textiles and Industrial Fabrics etc.
(ii) The manufacturing facility of the Company is situated in Bhilwara District in Rajasthan State and spreads over 10,000 square meters. The Company has at present an installed capacity of 1,920 rotors for cotton yarn having capacity to produce 16.5 tonnes per day of high quality yarn. The Company has continuously expanded and modernized the facilities in line with the industry trend and the Company plant is equipped with modern and automatic plant and machinery.
(iii)The company has been recognized as “One Star Export House” by the Director General of Foreign Trade with a certificate valid from 2017 to 2022. They have also received OEKO Tex certification. They have a dedicated in-house Testing and Quality Control Team which undertakes rigorous testing and quality management. They are one of the few open-end cotton yarn manufacturers globally who have received certification from USTER Technologies AG.
(iv) The Company is presently exporting cotton yarns to countries like Portugal, Italy, Germany, Belgium, South Africa, Slovania, Columbia, China, Pakistan, Bangladesh and others.They supply to customers, who are in fields like apparel and garment industry, industrial fabrics, towels, Denims etc.
(v) In the past five years, the company’s revenues have increased from INR 49.83 Cr in 2014-15 to INR 8,4.54 Cr in 2017-18 at a CAGR of around 19%. The Net Profit after tax has grown at a CAGR of almost 43% in the last three years. The company has 79 permanent employees on its payroll.
Promoters of Lagnam Spintex Limited Company are:
(i) Mr. Dwarka Prasad Mangal, aged 69 years is Promoter Director of th Company. Mr. D. P. Mangal takes care of financial and operational aspect of the Company. He is a qualified Chartered Accountant with vast industrial experience which includes more than 35 years in textile industry. He has also served as the top managerial positions in Large Textiles corporate companies such as RSWM Ltd & JCT Limited and was involved in various expansion projects of RSWM Ltd. He plays an important role in our Company and is responsible for its future growth. He also assists the Board in making business strategies, formation of policies, technological up gradation plan and new product development. .
(ii) Mr. Anand Mangal,aged 35 years is the Promoter and Managing Director of the Company. He has been on the Board of Our Company since incorporation. He has completed BSC (Honors) in Business & Management Studies from University of Bradford, UK. He has also worked with ICICI Bank from June-2006 to Mar-2011. During his tenure with ICICI Bank he was dealing with large corporate customers and MNC’s. Since 2011 he is working as Managing Director of the company responsible for production, marketing, purchase and administration of the existing textile facilities.
(iii) Lagnam Infotech Solutions Private Limited
(i) Authorized Share Capital 2,25,00,000 Equity shares at FV@10)
(ii) Issued, Subscribed,& Paid-up Share Capital Before Issue (1,16,69,000 Equity Shares at FV@10)
(iv) Reservation for Market Maker 3,00,000 Shares at FV@10)
(v) Reservation for QIB & HNI 28,50,000 Equity Shares at FV@10)
(vi) Reservation for Retail 28,50,000 Equity Shares at FV@10)
(vii) Paid Up Share Capital after the issue
Financials of Lagnam Spintex IPO:
1. Assets and Liabilities Key Parameters
2. Profit n Loss Key Parameters
3. Cash Flow Statement(all figures in lacs)
(i) Net Cash Generated from Operation
(ii) Net Cash Generated from Investment
(iii) Net Cash Generated from Financing Activity
(iv) Total[ (i)+(ii)+(iii) ]
(v) Cash and Cash Equivalents at the Beginning of the Year
(vi) Cash and Cash Equivalents at the end of the Year
Key Notes:a) The Revenue is growing at CAGR of 19.08% from FY14 to FY18.
b) The PAT is growing at CAGR of 34.25% from FY14 to FY18.[Excellent Growth]
c) The Annualized EPS[ Post Issue] = 2.7d) P/E(post issue)= 15.18[ Reasonably Priced].
e)P/B(post issue)= 1.41[ Reasonably Priced]
f)D/E(post issue) =1.72g)Mcap/Sales(ideally <2)= 0.85 on FY18 sales(Reasonable priced).
h) The Company has generated Positive Cash flows from operations in last 5 years. [Very Positive]
i) The Company's receiveable days have gone down from 44 Days in FY17 to 38 Days in FY18 [Positive].
Comparison With Peers:
Name of the Company
Lagnam Spintex Limited
PBM Polytex Ltd
Sambandam Spinning Mills
Source: MoneyControl and DRHP of Lagnam Spintex Limited
(i) The Financials as per FY18 is taken for the calculation.
(ii) The price of shares of Peers taken on the closing of 27.08.2018.
(iii) The RONW of Lagnam Spintex is calculated on post equity dilution.
Recommendation on Lagnam Spintex IPO:
Review and Recommendation of Lagnam Spintex Limited IPO from IZ Team is: 6/10
[ The Issue seems to be reasonably priced in terms of P/E, P/B, and Mcap/Sales. The Company is generating a positive cash flows from operations. The Company has shown excellent growth in the last 5 years. The company's new plant which is supposed to be functional in the year 2019 will further boost growth ]