Shree Karni Fabcom Limited IPO
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This company highlights its specialized niche in the manufacturing of technical textiles, catering to a diverse range of industries including luggage, medical, sports, apparel, and more. Below is a detailed analysis of the company’s operational model, strategic initiatives, and competitive edge in the industry:
Core Manufacturing Process
- Specialization: The company excels in producing woven and knitted fabrics, coated fabrics, and products made from 100% polyester, catering to specific industry needs by transforming yarn into high-quality fabric. This specialization extends to knitting, with weaving, coating, sizing, and embossing outsourced to its subsidiary, IGK Technical Textile LLP.
- Product Applications: Its textiles find applications in a vast array of products such as luggage, medical arch supports, sports kits, and weather protection gear like vehicle covers and tents, showcasing the versatility and utility of their offerings.
Production Capabilities
- Manufacturing Units: Equipped with automated machines, the company boasts significant daily production capacities across different production processes, including weaving, knitting, coating, and embossing, ensuring a high volume of output to meet market demand.
- Brand and Market Presence: Products are marketed under the brand ‘SKFL’, with plans to expand manufacturing capabilities into dyeing and bag manufacturing, indicating strategic growth and vertical integration.
Leadership and Expansion
- Experienced Leadership: Under the guidance of promoters with extensive experience in the technical textile trading and manufacturing sector, the company has transitioned from trading to manufacturing, showcasing a successful evolution in its business model.
- Strategic Acquisitions: The acquisition of a majority stake in IGK Technical Textile LLP allows for an expansion in weaving, coating, and embossing capabilities, further solidifying its position in the market.
Research and Development
- The company prioritizes quality and innovation through an in-house R&D facility, complemented by a quality assurance and control department. This focus on research and development not only ensures product excellence but also supports expansion in the domestic market, particularly among contract manufacturers for renowned brands.
Marketing Strategy and Customer Base
- B2B Model: Operating within a Business-to-Business model, the company establishes robust relationships with institutional manufacturers and traders, providing specialized technical textiles that meet the exacting standards of various industries.
- Diversified Customer Base: The strategy includes catering to a wide range of industries and leveraging a network of traders across India to distribute its products effectively, underscoring the company’s diversified approach to marketing and sales.
Conclusion
The company’s comprehensive business overview illustrates a well-established entity in the technical textiles manufacturing sector, underpinned by strong production capabilities, strategic leadership, and a clear vision for growth and innovation. Through strategic expansion, a focus on quality and R&D, and a diversified marketing network, the company is well-positioned to continue its growth trajectory and strengthen its market presence in the specialized technical textiles industry.
Objects of the Shree Karni Fabcom Limited IPO:
The Company proposes to utilize the Net Proceeds from the Issue towards the following objects:
i. Funding the capital expenditure setting up a dyeing unit in Navsari District, Surat, Gujarat;
ii. Funding the purchase of new machinery proposed to be installed at the new unit proposed to be set up for manufacturing bags in Palsana, Surat, Gujarat, with an intent to expand the product portfolio;
iii. Funding working capital requirements of the company; and
iv. General Corporate Purposes.
Shree Karni Fabcom Limited IPO Details:
| Open Date: | Mar 06 2024 |
| Close Date: | Mar 11 2024 |
| Total Shares: | 1,872,000 |
| Face Value: | ₹ 10 Per Equity Share |
| Issue Size: | 42.49 Cr. |
| Lot Size: | 600 Shares |
| Issue Price: | ₹ 220 - 227 Per Equity Share |
| Listing At: | NSE Emerge |
| Listing Date: | Mar 14 2024 |
Promoters And Management:
Rajiv Lakhotia, aged 42 years, is one of the Promoters of the Company. He is the Managing Director of the Company. He attended University of Calcutta to pursue a bachelor’s degree in commerce. He is presently heading the customer development considering the changing need of the industry and has played a key role in the growth and development of the company. He has an experience of 16 years in the textile industry and is head of sales department.
Radhe Shyam Daga, aged 65 years, is one of the Promoters of the company. He is the Whole-time Director of the Company. He does not hold any education qualification. Mr. Daga is having more than 20 years of experience in textile industry. He is presently supervising the day-to-day operations of the company.
Manoj Kumar Karnani, aged 48 years, is a Promoter and Whole-time Director of the Company. He does not hold any education qualification. He used to work as an independent agent providing custom clearance consultancy to businesses engaged in import and export of goods. He is well versed with custom laws and have more than 20 years of experience in import and export handling. His role is to deal with customs department for the company.
Financials of Shree Karni Fabcom Limited IPO:
Particulars ( In Lakhs ) |
2021 |
2022 |
2023 |
8M-FY24 |
| Revenue from Operations | 3,287 | 8,357 | 12,695 | 7,572 |
| Other Income | 2 | 8 | 9 | 27 |
| Total Revenue | 3,290 | 8,365 | 12,704 | 7,599 |
| Cost of Materials Consumed | 2,918 | 8,324 | 12,298 | 5,768 |
| Changes in inventories | -203 | -1,232 | -2,004 | -173 |
| Employees Benefit Expenses | 58 | 117 | 196 | 253 |
| Other Expenses | 137 | 329 | 695 | 310 |
| EBITDA | 381 | 828 | 1,519 | 1,440 |
| Depreciation & Amortisation | 24 | 53 | 152 | 146 |
| Finance cost | 188 | 250 | 516 | 203 |
| EBIT | 357 | 775 | 1,367 | 1,294 |
| OPM (%) | 11.57% | 9.90% | 11.96% | 18.95% |
| PBT | 168 | 526 | 851 | 1092 |
| Tax | 15 | 11 | 296 | 278 |
| PAT | 153 | 515 | 555 | 813 |
| NPM (%) | 4.67% | 6.15% | 4.37% | 10.70% |
| No.of Shares | 70.72 | 70.72 | 70.72 | 70.72 |
| EPS | 2.17 | 7.27 | 7.85 | 11.50 |
Comparison With Peers:
Note: - There are no listed companies in India that engage in a business similar to the Company
Recommendation on Shree Karni Fabcom Limited IPO:
Review and Recommendation of Shree Karni Fabcom by team IZ is 4/10.
1. Company stands at the forefront of the technical textiles manufacturing industry, providing high-quality, specialized fabrics tailored to meet the unique requirements of diverse sectors such as luggage, medical arch support, chairs, shoes, and apparel.
2. Specializing in a variety of fabrics and employing advanced materials like 100% polyester, resin, acrylic, and various coating chemicals, they are dedicated to producing the finest technical textiles in the market.
3. Their products find applications in a wide array of industries, encompassing luggage, roofing, agriculture net, vehicle covers, tents, armed forces fabric, sports kits, chairs, medical arch support, umbrellas, and raincoats. This versatility underscores their ability to cater to the specific needs of their diverse clientele.
4. Acquisitions and Expansions
They recently acquired a significant stake in IGK Technical Textile LLP, further broadening their manufacturing capabilities to include advanced weaving, coating, sizing, and embossing processes. This acquisition is a testament to their commitment to providing comprehensive textile solutions.
5. They continue to innovate and expand their product offerings and manufacturing capabilities, their company remains committed to delivering excellence in technical textiles manufacturing. Through strategic expansion, unwavering commitment to quality, and strong leadership, they are poised for sustained growth and success in serving the diverse needs of their clients across various industries.
6. Business Strategies
i. Setting up of new Dyeing Unit and another unit for manufacturing of bags
ii. Diversifying and increasing penetration in markets
iii. Strengthen our marketing network
7. In the competitive and fragmented global textiles industry, they distinguish themselves through expertise in weaving and coating, innovative designs, quality, timely delivery, and competitive pricing. Their approach is to leverage their industry knowledge to meet current fashion and market demands, setting them apart from both organized and unorganized competitors.
8. The Revenue has Increased from Rs.32 Crore in FY21 to Rs.126 Crore in FY23.
9. The EBITDA has Increased from 3 Crore in FY21 to 15 Crore in FY23.
10. The PAT has Increased from 1 Crore in FY21 to 5 Crore in FY23.
11. As per FY23, CFO/EBITDA is 1.00, As per FY24, EPS is 17.24,
12. Market Capitalization is 161 Crore & P/E is 13.2x based on FY24.
Lead Manager of Shree Karni Fabcom Limited IPO:
Registrar of Shree Karni Fabcom Limited IPO:
Company Address:
Shree Karni Fabcom Limited
Plot 188,189,190, Block No. 314,
Rajhans Texpa Village Baleshvar
Taluka Palsana, Surat - 394 317,
Phone: +91 262 235 0900
Email: shreekarni@skflindia.com
Website: http://www.skflindia.com/
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