Veekayem Fashion and Apparels Limited IPO

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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:

  1. Textile: They manufacture grey cloths including polyester / viscose, polyester cotton, 100 % Cotton, 100 % Linen, 100 % Wool and Lycra Fabrics through the weaving process;
  2. 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

  1. Consistency in Quality and Service Standards
  2.  Scalable Business Model
  3. Product mix and Market mix
  4. Cost-effective production and timely fulfillment of orders

Objects of the Veekayem Fashion and Apparels Limited IPO:

The Company proposes to utilize the funds for the following objects: a) Funding the working capital requirements of the company b) General Corporate Purposes

Veekayem Fashion and Apparels Limited IPO Details:

Open Date: Aug 05 2022
Close Date: Aug 11 2022
Total Shares: 15,84,000
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:

i. Krishankant Gupta, aged 63 years, is the Chairman of the Board, a Managing Director and one of the Promoters of the Company. He holds Bachelor’s degree in Commerce from Kurukshetra University. He has more than 17 years of experience in the Textiles industry. ii. Vijaykumar Gupta, aged 67 years, is the Whole Time Director and one of the Promoters of the Company. He holds Bachelor’s degree in Commerce from Dehradun University and also holds Degree in Business Management from Indian Institute of Marketing Management. He has more than 17 years of experience in the Textile industry. iii. Madanlal Gupta, aged 62 years, is the Non-Executive Director and one of the Promoters of the Company. He holds Bachelor’s degree in Commerce from Mumbai University. He has more than 17 years of experience in the Tectile industry.

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
Other Expense 14 8.68 18
Operating Profit 12 9.51 10.21
OPM% 8.05% 12.42% 4.74%
Finance Cost 7.52 7.85 7.46
Depreciation 1.27 1.3 1.39
Other Income 0.460 0.14 0.2
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. 

Lead Manager of Veekayem Fashion and Apparels Limited IPO:

  1. GYR CAPITAL ADVISORS PRIVATE LIMITED

Registrar of Veekayem Fashion and Apparels Limited IPO:

  1. Kfin Technology Private Limited

Company Address:

113, Udyog Bhavan, Sharma Ind. Estate, Walghat Road, Goregaon East, Mumbai, Mahrashtra, India – 400 063

Discussion on Veekayem Fashion and Apparels Limited IPO:

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