Veekayem Fashion and Apparels Limited IPO
i. Veekayem Fashion is engaged in the business of weaving and garment manufacturing. The company is majorly engaged in the business of manufacturing for various brands, however, they also cater to exports and local markets in customized designs as requested by the clients and customers in the textile and apparel industry.
ii. Veekayem Fashion deals in a range of products like Shirting fabrics, Suiting Fabrics, Trouser fabrics, jacketing fabrics, format trousers, cotton trousers, and other accessories, etc. Their extensive product portfolio of 100% Cotton – Lycra and Non-Lycra, Giza, Supima, Blended Cotton Suiting – Chief Value Cotton, Polyester Cotton, 100% Cotton Yarn Dyed, Polyester Viscose, Terry Rayon Suiting and Mock Linen.
iii. The company operates from its registered office located in Mumbai City, Maharashtra. Their manufacturing facility is situated at Umargaon in state of Gujarat. The manufacturing facility is installed with automated machinery having the capacity to manufacture 5,00,000 Meters fabrics per month and 1,50,000 pcs of readymade garments per month.
iv. Veekayem Fashion business is organized into two main product categories:
- Textile: They manufacture grey cloths including polyester / viscose, polyester cotton, 100 % Cotton, 100 % Linen, 100 % Wool and Lycra Fabrics through the weaving process;
- Garments: They manufacture all types of readymade garments for men and women. The broad categories include formal shirts, cotton shirts, formal trousers, cotton trousers, cotton joggers, cotton shorts, pajamas, and Bermuda.
v. Competitive Strengths
- Consistency in Quality and Service Standards
- Scalable Business Model
- Product mix and Market mix
- Cost-effective production and timely fulfillment of orders
Objects of the Veekayem Fashion and Apparels Limited IPO:
Veekayem Fashion and Apparels Limited IPO Details:
|Open Date:||Aug 05 2022|
|Close Date:||Aug 11 2022|
|Face Value:||₹ 10 Per Equity Share|
|Issue Type:||Fixed Type Issue|
|Issue Size:||4.44 Cr.|
|Lot Size:||4000 Shares|
|Issue Price:||₹ 28 Per Equity Share|
|Listing At:||NSE Emerge|
|Listing Date:||Aug 22 2022|
Promoters And Management:
Financials of Veekayem Fashion and Apparels Limited IPO:
|Particulars (in Lakhs)||March 22||March 21||March 20|
|Revenue from operations||149||77||216|
|Cost of raw materials consumed||120||54||184|
|Changes in inventories||-8||-2.45||-11|
|Employee Benefit Expense||11||7.07||13.27|
|Profit (Loss) for the period||1.88||0.35||1.09|
Comparison With Peers:
|Name of the Company||CMP||EPS||PAT (In Cr.)||Mcap (in crores)|
|Page Industries Limited||48,873||481.02||537||54,493|
|Indian Terrain Fashions Limited||52.8||-0.54||-2||217|
|Monte Carlo Fashions Limited||744||55.01||114||1,541|
|Veekayem Fashion and Apparels Limited||28||0.58||0.35||17|
Recommendation on Veekayem Fashion and Apparels Limited IPO:
Review and Recommendation of Veekayem Textile Mills Private Limited SME IPO by InvestorZone 3/10
1. Company is engaged in the business of weaving and garment manufacturing. The business is divided into two parts.
a) Textile: They manufacture grey cloths including polyester / viscos, polyester cotton, 100 % Cotton, 100 % Linen, 100 % Wool and Lycra Fabrics through weaving process.
b) Garments: They manufacture all types of readymade garments for men and women. The broad categories include formal shirts, cotton shirts, formal trousers, cotton trousers, cotton joggers, cotton shorts, pajamas and Bermuda.
2. The manufacturing facility is situated at Valsad in state of Gujarat. The manufacturing facility is installed with automated machineries having capacity to manufacture 5, 00,000 Meters fabrics per month and 1, and 50,000 pcs of readymade garments per month. 3. Revenue has gone down from 216 Crores in Fy20 to 149 Crores in Fy22. There is no growth in the business as last 2 years were affected by Covid-19.
4. Debt on balance sheet as on 31.03.2022 is Rs. 80 Crores and Equity is 30 Crores. So, D/E is 2.70x which look high. 5. EPS based on FY22 Financials is Rs. 3.29. Issue price is Rs.28, so P/E is 8.5x. This looks high.
6. Sector is very competitive, so difficult to make money in this business.