Akshar Spintex IPO – Review, Allotment Status, Subscription, Price, Date & more

Akshar Spintex released its latest prospectus for its IPO on April 19, 2018. The Company plans to raise funds to the tune of Rs. 26.98 crores via this IPO. Though certain part of this issue is via offer for sale i.e. secondary issue wherein the current shareholders/promoters dilute their stake in the holding of the company.

The Akshar Spintex IPO is releasing on 27 April 2018 and will be open for subscription till 03 May 2018. To evaluate the IPO and the company, lets read the key features  like the Akshar Spintex IPO size, Akshar Spintex IPO objective, company’s background, financial ratios etc.

Akshar Spintex IPO Review & Ratings

Summary of Akshar Spintex IPO

Akshar Spintex originated in Junagad district of Gujarat in 2013 and is engaged in manufacturing of cotton yarn. The company is promoted by Ashok Bhalala, Amit Ghadiya, Harikrishna Chauhan and Rekhaben Chauhan. The promoters have expertise in the industry and also in the functions like manufacturing, marketing and finance. In last 2 years, the revenue of the company has increased more than 1.5 times representing a CAGR of 138.96%.

Akshar Spintex IPO is opening up for subscription on Friday, 27 April 2018 and will be open till Thursday, 03 May 2-18. The IPO holds 67,47,000 equity shares, out of which the majority of shares are via secondary sale i.e. being offered for sale by the existing shareholders. The number of shares under offer for sale scheme is 57,48,000 equity shares i.e. 85% of the IPO size. The IPO is expected to collect Rs, 26-27 crores of funds.

The lead managers for the IPO are Pantomath capital advisors, based in Mumbai and the registrar to the offer is Bigshare Services.

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Akshar Spintex Insulation IPO Date

Akshar Spintex IPO will be opening for subscription on Friday, 27 April 2018 till Thursday 03 May 2018.

Akshar Spintex IPO Subscription

The subscription details would be updated herein on a daily basis.

Akshar Spintex IPO Allotment Status

The details of shares allotted to the subscribers will be updated herein once the allotment process is completed by the company.

Akshar Spintex IPO Price Band

The IPO offer price has been fixed at Rs. 40 per equity share which is 4 times the face value of the shares. The IPO offer price is based on various factors that have been discussed later in this article. The price has been decided by a mutual consultation between the company and the lead manager of the IPO.

Akshar Spintex IPO Issue Size

Akshar Spintex IPO will be collecting funds to the tune of Rs. 26.98 crores. Out of this, certain portion would be from the market makers. The net offer to the public after eliminating such reservation would be aggregating to Rs. 25.60 crores.

Akshar Spintex IPO Equity Share Offerings

The total number of equity shares being offered are 67,47,000. Out of this only 9,99,000 are fresh equity shares. The balance i.e. 57,48,000 shares are being offered by the current promoters for sale to the public.  The selling shareholders includes a long list and the break up of the shares being offered by them has not been discussed by the company.

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Akshar Spintex Limited – Company Overview

Akshar Spintex Limited is engaged in manufacturing of 100% cotton yarn which includes combed, semi combed and carded yarn. The manufacturing unit of the company is set up in Rajkot, Gujarat which is in the vicinity of rich cotton growing areas of Gujarat. It has an installed capacity of 24,480 spindle. Yarn is the end product of spinning and is a primary component of any knitted fabric. To manufacture different kinds of fabric, different kinds of yarn are mixed with 100% cotton yarn. It is the yarn count and the twisting mode of the yarn that actually determines the overall strength and look of the manufactured fabric

The company is currently being operated by the very experienced and the field expert promoters who have a very rich experience and vast knowledge about the cotton manufacturing industry and the manufacturing process. The process can be briefed in 9 steps : Blow room, carding, draw frame, lap former, combing, finished draw frame, simplex, ring spinning and then winding.

Key members of Akshar Spintex Limited:

• Ashokbhai Bhalala, Managing Director
• Amit Gadhiya, Wholetime Director
• Harikrishna Chauhan, Wholetime Director
• Ilaben Pagdhar, Non-Executive Independent Director

Competitive Strengths of Akshar Spintex Limited:

• Leveraging expertise and experience of promoters
• Government incentive
• Modern process and technology
• Locational advantage
• Customer oriented approach

Business strategy of Akshar Spintex Limited:

• Brand image
• Improving financial efficiency
• Technology upgradation
• Customer satisfaction
• Leveraging market skills and relationship

Akshar Spintex – Financial Statements

To evaluate whether he company has good prospects of growth or not, the key is to analyse the figures of the company. For your reference, the key figures of the company are provided herein. Since the company was incorporated in 2013, the figures are presented only for latest 4 years.

Assets of the Company

Revenue & PAT of the Company

Earnings per Equity Share

From FY 14-15 to FY 16-17, the revenue has grown from Rs. 15.19 crore to Rs. 86.78 crores which is almost  close 1.75 times. This represents a CAGR of 138.96%. The EBIDTA has increased from Rs. 2.55 crore to Rs. 12.57 crore which implies a CAGR of 121.89% and plain growth rate of 6 times. The PAT which disclosed a loss of Rs. 51.25 lacs has turned into a profit venture to the tune of Rs 5.38 Cr.

Akshar Spintex Promoters

The key promoters for Akshar Spintex are:

• Ashokbhai Bhalala
• Amit Gadhiya
• Harikrishna Chauhan
• Rekhaben Chauhan

Promoter Interest in the company

Promoters are interested in the Company to the extent that they have promoted the Company, to the extent of their shareholding, for which they are entitled to receive the dividend declared, and other distribution in respect of Equity Shares if any, by the Company.

Also, Promoters who are also Directors may be deemed to be interested to the extent of fees, remuneration and/or reimbursement of expenses payable to them for services rendered to the company in accordance with the provisions of the relevant statutes.

The promoters may also be deemed to be interested in the company to the extent of their shareholding in group companies promoted by them with which the company transacts in ordinary course of business

Promoter Interest in property of the company

Promoters do not have any interest in any property acquired by or proposed to be acquired by the Company two years prior to filing of the latest Prospectus.

Akshar Spintex IPO Offer Details or Issue Details

Akshar Spintex IPO Issue Object

Akshar Spintex is raising the funds via IPO with the following objectives:

• To fund the Working Capital Requirements
• General Corporate Expenses

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Akshar Spintex IPO – Basis of the Offer Price

Akshar Spintex and the book running lead manager have mutually arrived at an offer price of Rs. 40 per share which is 4 times the face value of the share. The offer price was decided via book building process wherein the company and the lead managers assess various market and economic scenarios and also the qualitative and quantitative factors specific to the company. The factors are discussed herein below.

Qualitative factors influencing the offer price:

• Leveraging expertise and experience of promoters
• Government incentive
• Modern process and technology
• Locational advantage
• Customer oriented approach

Quantitative factors influencing the offer price:

• Earning per share – The weighted average EPS for the latest 3 years is Rs. 1.44 and for FY 16-17 the EPS is Rs. 2.24
• Price/earning ratio – Bsed on the EPS of Rs. 2.24, the PE ratio turns out to be 17.86 and based on the weighted average EPS, the PE ratio is 27.78. The industry average PE ratio is 9.49.
• Return on Net Worth – The RoNW for FY 16-17 is 17.08% and the weighted average RoNW is 11.50%. Minimum RoNM after Issue needed to maintain Pre-Issue EPS for the year ended March 31, 2017 is 15.76%.
• Net Asset Value – NAV per Equity Share – The net asset value per equity share as on 31 March 2017 is Rs. 13.14 and after the offer would be 15.33
• Comparison of Accounting ratios with Industry peers – The peer group includes Vippy Spinpro and Sri Nachammai Cotton Mills.

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Akshar Spintex IPO Grey Market Premium

Akshar Spintex IPO grey market opened in mid March, similar to any other IPO. The IPO has been doing fine with the grey market. The grey market is usually conducted by the sub-brokers. The kostak rate or the grey market price for this IPO has also been floating around in market at good rates.

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