AB Cotspin SME
Listing performance
Scheduled dates
Tentative timetable — a past date is not confirmation the step completed
Issue details
- Listing date
- 11 Jan 2022
- Face value
- ₹10 per share
- Issue price
- ₹35 per share
- Lot size
- 4,000 shares
- Total issue size
- ₹10.09 Cr
- Market cap at offer price
- ₹36.02 Cr
- Promoter holding
- 48.50% → 34.91% pre-issue → post-issue
- ISIN
- INE08PH01015
- Registrar
- MUFG Intime India Pvt.Ltd.
- Lead managers
- Pantomath Capital Advisors Pvt.Ltd.
- Registered office
- 176, Homeland Enclave, Punjab
Reservation and application size
How the issue is split between investor categories, and what each may bid
| Investor category | Shares | % of net | % of total |
|---|---|---|---|
| Market maker | 1,48,000 | — | — |
Application size
Minimum 4,000 shares per lot, in multiples, at ₹35
| Application | Lots | Shares | Amount |
|---|---|---|---|
| Retail (min) | 1 | 4,000 | ₹1,40,000 |
| S-HNI (min) | 2 | 8,000 | ₹2,80,000 |
| S-HNI (max) | 7 | 28,000 | ₹9,80,000 |
| B-HNI (min) | 8 | 32,000 | ₹11,20,000 |
Category limits
| Category | Bid size | Cut-off |
|---|---|---|
| Retail (RII) | Up to ₹2 lakh | Yes |
| Small HNI (sNII) | ₹2 lakh – ₹10 lakh | No |
| Big HNI (bNII) | Above ₹10 lakh | No |
| Employee | Up to ₹5 lakh | Yes |
Bidding at cut-off means accepting the final issue price without naming one. Only retail and employee applicants may do so.
Valuation and performance
Valuation at offer price
| Metric | Pre-issue | Post-issue |
|---|---|---|
| Market cap | — | ₹36.02 Cr |
About AB Cotspin SME
AB Cotspin India Limited, originally incorporated as 'Ganga Cottex Private Limited' in 1997, commenced business with cotton ginning operations producing cotton bales and seeds. In 2000, it installed a crushing unit for extracting oil from cotton and mustard seeds, expanding into cottonseed oil, mustard oil, and oilcake production. In 2011, the company entered cotton yarn manufacturing by setting up a spinning plant, and in 2014 installed knitting machines to manufacture knitted fabric. The company has one manufacturing facility at Jaitu, Dist Faridkot, Punjab, with installed capacity of 18,000 spindles for cotton yarn, 441 mt p.a. for knitted fabric, and 6,750 mt p.a. for seed oil/oilcake. The company generated revenue from operations of ₹11,536.49 lakhs during fiscal 2021 and primarily serves domestic customers in Punjab and Haryana.
Company Analysis
from RHPAB Cotspin India Limited manufactures cotton yarn, knitted fabric, and cottonseed oil/oilcakes, operating primarily in the textiles and agro-processing sectors.
AB Cotspin India Limited, originally incorporated as 'Ganga Cottex Private Limited' in 1997, commenced business with cotton ginning operations producing cotton bales and seeds. In 2000, it installed a crushing unit for extracting oil from cotton and mustard seeds, expanding into cottonseed oil, mustard oil, and oilcake production. In 2011, the company entered cotton yarn manufacturing by setting up a spinning plant, and in 2014 installed knitting machines to manufacture knitted fabric. The company has one manufacturing facility at Jaitu, Dist Faridkot, Punjab, with installed capacity of 18,000 spindles for cotton yarn, 441 mt p.a. for knitted fabric, and 6,750 mt p.a. for seed oil/oilcake. The company generated revenue from operations of ₹11,536.49 lakhs during fiscal 2021 and primarily serves domestic customers in Punjab and Haryana.
Objects of the Issue
- Funding the working capital requirements of our Company ₹775.00 lakhs p.24
- General corporate purposes ₹184.40 lakhs p.24
- Funding the working capital requirements of the Company ₹775.00 lakhs p.82
- General corporate purposes ₹178.32 lakhs p.86
Issue Structure
- Total Issue
- ₹1009.40 lakhs
- Fresh Issue
- 28,84,000 equity shares at ₹35 per share
- Price Band
- ₹33.00 to ₹35.00 per equity share
- Lot Size
- 4,000 equity shares and in multiples of 4,000 thereafter
- Face Value
- ₹10 per equity share
Business Model
The company manufactures and sells cotton yarn, knitted fabric, cottonseed oil, mustard oil, and oilcakes. It sources raw materials (primarily cotton and mustard seeds) domestically on spot order basis and manufactures products at its single facility in Punjab. Revenue comes from the sale of these manufactured products to domestic customers, with 100% of revenue from domestic operations in recent periods.
Business Segments
SWOT Analysis
- • Diversified product portfolio across cotton yarn, knitted fabric, oils and oilcakes(p.23)
- • Revenue generation of ₹11,536.49 lakhs during fiscal 2021 demonstrates operational scale(p.23)
- • Significant domestic market presence with 94.08% revenue from Punjab and Haryana(p.33)
- • Integrated manufacturing facility with yarn production at 18,000 spindles capacity(p.23)
- • Strong utilization rates indicate operational efficiency(p.35)
- • Diverse product portfolio with focus on quality(p.89)
- • Experienced management and dedicated employee base(p.89)
- • Repeat orders from customers(p.89)
- • Location advantage(p.89)
- • Diversified product portfolio with quality focus(p.108)
- • Experienced management team with textile industry expertise(p.108)
- • Strong customer retention via repeat orders(p.108)
- • Strategic location in cotton textile hub with raw material proximity(p.108)
- • Solid capacity utilization in seed oil/cake production(p.113)
- • Leading textile manufacturer in North India with established quality reputation(p.185)
- • Integrated manufacturing capability from ginning through spinning and knitting(p.185)
- • World-class technology and automation infrastructure with 18,000 spindles(p.185)
- • State-of-the-art R&D facility with round-the-clock quality monitoring(p.185)
- • BCI certification and traceability from farmer to finished product(p.185)
- • Diversified product portfolio including yarn, fabric, oil and oilcakes(p.199)
- • Top 10 customers represent 77.70% of revenue, creating customer concentration risk(p.31)
- • Significant loss of corporate records including statutory filings due to office relocation(p.32)
- • Non-compliance with statutory provisions including gratuity provision and Companies Act sections(p.30)
- • High debt with ₹3,876.24 lakhs total borrowings as of June 30, 2021(p.24)
- • Reliance on related party financing with unsecured loans of ₹409.63 lakhs repayable on demand(p.41)
- • Limited documentation of Directors' qualifications and experience relying on affidavits(p.42)
- • Negative cash flow from operations in FY 2020-21(p.38)
- • Significant dependent on domestic, regional and global economic conditions(p.49)
- • High inflation reduces operating margins if costs cannot be passed to clients(p.51)
- • Accounting standards differences may impact investor assessments(p.50)
- • Heavy reliance on domestic market with geographic concentration(p.107)
- • Limited customer base concentration(p.114)
- • Single manufacturing facility creates operational risk(p.113)
- • Promoter personal guarantees on bank loans(p.134)
- • Low capacity utilization in knitted fabric production(p.113)
- • Significant dependence on limited number of customers (top 5 customers = 65% of revenue)(p.217)
- • High debt-to-equity ratio of 1.54 as of June 30, 2021(p.198)
- • Pending litigation with unfavorable judgement against the company(p.222)
- • Significant dependence on small number of suppliers (top 5 suppliers = 91.88%)(p.217)
- • Low cash reserves with only ₹0.93 lakhs as of June 30, 2021(p.213)
- • Pending regulatory approvals for future expansion site(p.229)
- • Multiple pending hazardous waste consents and environmental licenses(p.229)
- • Pending factory and additional regulatory approvals for expansion land(p.229)
- • Missing Employee Provident Fund Organization certificate(p.229)
- • Expansion of manufacturing capacity with additional land acquired adjacent to existing facility(p.35)
- • Growth in Indian cotton textile industry with evolving market dynamics(p.23)
- • Installation of 1 MW solar plant to reduce electricity costs and dependency(p.34)
- • Potential for geographic expansion beyond Punjab and Haryana(p.33)
- • Opportunity to add new customers in normal course of business(p.31)
- • Growing Indian textile industry demand supported by rising disposable incomes(p.104)
- • Strong domestic consumption driven by rising income levels(p.104)
- • Government support for textile exports and manufacturing(p.104)
- • Expected growth in India's textile and apparel trade(p.106)
- • Capacity expansion plans for cotton yarn production(p.108)
- • International market expansion(p.108)
- • Technology enhancement for operational efficiency(p.109)
- • Strong growth in Indian textile exports sector(p.108)
- • Planned expansion of BCI yarn and fabric production across entire unit(p.185)
- • Expansion of product portfolio with slub yarns and double yarns(p.185)
- • Growing demand for certified sustainable textiles from international buyers(p.185)
- • Surplus manufacturing capacity utilization potential(p.199)
- • Planned future expansion through acquisition of additional agricultural land(p.229)
- • Volatility in cotton prices and raw material costs representing 56-76% of revenue(p.31)
- • Dependence on state electricity boards with potential power disruptions(p.34)
- • Labour-intensive industry exposed to strikes and wage inflation(p.34)
- • High fragmentation and intense competition in textile industry(p.35)
- • COVID-19 pandemic creating economic uncertainty and operational disruption risk(p.33)
- • Top 10 suppliers contributed 95.47% of purchases, creating supply concentration risk(p.31)
- • Regulatory compliance costs including environmental and pollution control requirements(p.41)
- • Global economic slowdown and FX volatility affecting operations(p.23)
- • Global economic volatility affects Indian securities market and economy(p.49)
- • Indian infrastructure constraints could disrupt business operations(p.49)
- • Sovereign rating downgrades increase borrowing costs(p.49)
- • Natural disasters and epidemics can severely damage operations(p.49)
- • Changing tax laws and regulations create compliance risks(p.50)
- • Financial instability in other countries increases Indian market volatility(p.51)
- • Intense price-based competition in textile industry(p.114)
- • Dependence on raw material supply and price volatility(p.114)
- • COVID-19 pandemic impact on business operations(p.107)
- • Regulatory and environmental compliance risks(p.115)
- • Insurance coverage gaps for specific risks(p.115)
- • Volatility in raw material supply and pricing affecting margins(p.200)
- • Exposure to fluctuations in input prices including agricultural commodities(p.200)
- • Intense competition from domestic and international textile manufacturers(p.217)
- • Exposure to COVID-19 pandemic disruptions(p.200)
- • Dependence on agricultural production cycles and monsoon conditions(p.200)
- • Risk of default or delayed payment from customers affecting liquidity(p.200)
- • Pending hazardous waste management consent application(p.229)
Promoters
| Name | Role | Pre-Issue | Post-Issue |
|---|---|---|---|
| Deepak Garg | Promoter | 41.53% | — |
| Pooja Garg | Promoter | 4.66% | — |
| Deepak Garg | Promoter | 41.53% | 29.90% |
| Pooja Garg | Promoter | 4.66% | 3.35% |
| Manohar Lal | Promoter Group | 0.29% | 0.21% |
| Seema Garg | Promoter Group | 2.02% | 1.46% |
| Deepak Garg | Promoter | 41.53% | 29.90% |
| Pooja Garg | Promoter | — | — |
| Deepak Garg | Promoter | 3.57% (3.57 crores shares) | — |
| Pooja Garg | Promoter | 30.77 crores shares (41.54%) | — |
| Manohar Lal | Promoter | — | — |
| Deepak Garg | Promoter | — | — |
| Chiman Lal | Promoter | — | — |
| Tarsem Lal | Promoter | — | — |
| Ram Dayal Garg | Promoter | — | — |
Leadership
Auto-extracted from the company's RHP using AI, with each fact linked to its source passage (hover any row to see the quote & page). Provided for research only, not investment advice — verify against the official RHP before relying on it.