Le Merite Exports SME
Listing performance
Scheduled dates
Tentative timetable — a past date is not confirmation the step completed
Issue details
- IPO date
- 25 Apr 2022 – 28 Apr 2022
- Listing date
- 09 May 2022
- Face value
- ₹10 per share
- Issue price
- ₹75 per share
- Lot size
- 1,600 shares
- Total issue size
- ₹48 Cr
- Market cap at offer price
- ₹176 Cr
- Promoter holding
- 99.99% → 72.74% pre-issue → post-issue
- ISIN
- INE0G1L01017
- Registrar
- Bigshare Services Pvt.Ltd.
- Lead managers
- Fedex Securities Pvt.Ltd.
- Registered office
- C B1-104D, Boomerang, Chandivali Farm Road, Powai, Andheri (East), Maharashtra
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 | 3,36,000 | — | — |
Application size
Minimum 1,600 shares per lot, in multiples, at ₹75
| Application | Lots | Shares | Amount |
|---|---|---|---|
| Retail (min) | 1 | 1,600 | ₹1,20,000 |
| S-HNI (min) | 2 | 3,200 | ₹2,40,000 |
| S-HNI (max) | 8 | 12,800 | ₹9,60,000 |
| B-HNI (min) | 9 | 14,400 | ₹10,80,000 |
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 |
|---|---|---|
| EPS (₹) | 41.31 | — |
| P/E (×) | 1.82 | — |
| Market cap | — | ₹176 Cr |
Key performance indicators
- Return on net worth
- 28.99%
- ROCE
- 43.03%
- EBITDA margin
- 3.88%
- NAV per share
- ₹142.51
Single period as reported. Year-on-year movement is in the financials table below, where every period is published.
About Le Merite Exports SME
Le Merite Exports Limited was originally incorporated as Didwaniya Yarn Exports Private Limited on December 24, 2003. The company changed its name to Le Merite Exports Private Limited in 2004, and was converted to a public company in 2015. Control transferred from the Didwaniya family to the Lath family on March 31, 2006. The company manufactures and trades textile products including cotton yarn (counts NE 16/1 to NE 32/1 & NE 16/2 to NE 32/2) and finished fabric. It also exports sustainable, eco-friendly organic yarn and fabric to international textile and garment manufacturers. The company has been recognized as a Three Star Export House by the Director General of Foreign Trade.
Company Analysis
from RHPLe Merite Exports Limited is an ISO 9001:2015 certified textile manufacturing and trading company engaged in cotton yarn and fabric production for domestic and export markets.
Le Merite Exports Limited was originally incorporated as Didwaniya Yarn Exports Private Limited on December 24, 2003. The company changed its name to Le Merite Exports Private Limited in 2004, and was converted to a public company in 2015. Control transferred from the Didwaniya family to the Lath family on March 31, 2006. The company manufactures and trades textile products including cotton yarn (counts NE 16/1 to NE 32/1 & NE 16/2 to NE 32/2) and finished fabric. It also exports sustainable, eco-friendly organic yarn and fabric to international textile and garment manufacturers. The company has been recognized as a Three Star Export House by the Director General of Foreign Trade.
Objects of the Issue
- Meeting incremental working capital requirements ₹3400.00 Lakhs p.18
- General corporate purposes ₹1100.00 Lakhs p.18
- Meeting incremental working capital requirements ₹3,400.00 Lakhs p.75
- General corporate purposes ₹1,100.00 Lakhs p.80
- —
- Not explicitly stated in Part 4 - Repayment of borrowings, Funding capex, or General corporate purposes to be determined from other parts of the document
Issue Structure
- Total Issue
- ₹4,800.00 Lakhs
- Fresh Issue
- ₹4,800.00 Lakhs
- Offer for Sale
- NA
- Price Band
- ₹75 per equity share
- Lot Size
- 1600 Equity Shares
- Face Value
- ₹10 per equity share
Business Model
The company earns revenue through manufacturing and trading of textile products. Revenue comes from spinning unit yarn production, fabric manufacturing operations, and trading operations. For the financial year ended March 31, 2021, top ten clients accounted for approximately 37.35% of revenue from operations, and for the nine months period ended December 31, 2021, they accounted for 35.46% of revenue. Export revenue represented 86.53% of total revenue from operations for the nine months period ended December 31, 2021.
Business Segments
SWOT Analysis
- • ISO 9001:2015 certified with diversified textile product portfolio(p.17)
- • Recognition as Three Star Export House by Director General of Foreign Trade(p.17)
- • Strong revenue growth trajectory with increasing profitability(p.18)
- • Production of sustainable and eco-friendly organic yarn and fabric(p.17)
- • Significant export presence across 39 countries(p.27)
- • Experienced management with extensive textile sector expertise(p.126)
- • Low capex operational model via leasing and management arrangements(p.126)
- • Diversified customer base across 39 countries mitigates geographic and cyclical risk(p.126)
- • Strong financial performance with improving profitability metrics(p.127)
- • OEKO-TEX and GOTS certifications for organic and sustainable products(p.127)
- • Recognized three-star export house status with strong export capability(p.129)
- • ISO and international certifications for quality and sustainability(p.226)
- • Recognition as Three Star Export House with significant export capability(p.226)
- • Strong profit growth trajectory(p.232)
- • Substantial outstanding indebtedness of ₹9,401.99 lakhs creating debt service burden(p.29)
- • High dependence on limited customer base for significant revenue contribution(p.26)
- • No long-term supply agreements for raw materials, exposing company to price and supply fluctuations(p.28)
- • Manufacturing facilities not owned but leased/licensed, creating operational continuity risk(p.26)
- • Unsecured loans of ₹113.26 lakhs repayable on demand from promoters and related parties(p.33)
- • Limited operating experience and brand recognition in new markets(p.36)
- • Certain secretarial non-compliances with filings under Companies Act(p.30)
- • Reliance on declarations for educational qualifications of promoter and independent director(p.31)
- • High financial leverage with significant debt accumulation(p.127)
- • High working capital cycle dependency creates cash flow strain(p.125)
- • Customer concentration risk: top 10 customers represent over one-third of revenue(p.126)
- • Limited production capacity utilization(p.129)
- • High dependence on limited number of customers(p.233)
- • Significant dependence on few suppliers(p.233)
- • High working capital and borrowing requirements(p.227)
- • Multiple tax proceedings and contingent liabilities pending(p.235)
- • Expansion of textile and apparel sector supported by government schemes and policies(p.17)
- • Large employment generation potential in textile sector(p.17)
- • Strong growth in global textile and apparel demand(p.17)
- • Utilization of IPO proceeds for working capital and business expansion(p.18)
- • Increasing global demand for sustainable and eco-friendly textile products(p.17)
- • China's wage increases and workforce shortage creates relocation opportunity for India(p.127)
- • Expansion into polyester and synthetic yarn manufacturing via subsidiaries(p.128)
- • Global demand for organic and sustainable textiles is growing(p.127)
- • Plan to double cotton yarn production by FY2025 through leasing expansion(p.128)
- • Geographic expansion in new markets through enhanced sales and marketing presence(p.128)
- • Expansion into non-cotton yarn through newly incorporated subsidiaries(p.226)
- • Growing international demand for sustainable/organic textiles(p.226)
- • Potential migration to main board with larger capital access(p.264)
- • Intense competition from organized and unorganized textile industry players(p.28)
- • Volatility in raw material prices and non-availability of cotton(p.27)
- • Foreign exchange fluctuation risks affecting export profitability(p.28)
- • Global economic uncertainties and COVID-19 pandemic impact(p.27)
- • Dependence on third-party transportation providers with escalating costs(p.29)
- • Import duties and trade restrictions on exported products(p.39)
- • Risk of supply disruptions at raw material supplier facilities(p.33)
- • Power supply constraints and electricity cost increases(p.41)
- • Fire hazard risks inherent to cotton processing operations(p.28)
- • General economic downturn and macroeconomic volatility affecting demand(p.44)
- • Highly competitive and fragmented yarn manufacturing industry(p.134)
- • Raw cotton availability and price volatility dependent on monsoon and cultivation season(p.132)
- • Ongoing COVID-19 pandemic and variant waves create operational uncertainty(p.132)
- • Foreign exchange rate volatility and import-export policy changes(p.133)
- • Volatility in supply and pricing of raw materials(p.227)
- • Labor-intensive industry model(p.227)
- • Customer payment defaults and delays(p.227)
- • Regulatory and legal uncertainties(p.227)
- • Intense pricing competition(p.227)
- • COVID-19 outbreak impact on operations(p.227)
Promoters
| Name | Role | Pre-Issue | Post-Issue |
|---|---|---|---|
| Abhishek Lath | Promoter | 30.74% | — |
| Umashankar Lath | Promoter | 11.86% | — |
| Abhishek Lath | Promoter | 30.74% | 22.36% |
| Umashankar Lath | Promoter | 11.86% | 8.62% |
| Ashadevi Lath | Promoter Group | 40.01% | 29.10% |
| Sweta Lath | Promoter Group | 9.31% | 5.88% |
| Umashankar Lath - HUF | Promoter Group | 8.08% | 6.77% |
| Abhishek Lath - HUF | Promoter Group | 0.01% | 0.00% |
| Abhishek Lath | Promoter | 30.74% | — |
| Umashankar Lath | Promoter | 11.86% | — |
| Abhishek Lath | Promoter | — | — |
| Umashankar Lath | Promoter | — | — |
| Ashadevi Lath | Promoter | — | — |
| Sweta Lath | Promoter | — | — |
| Prakashchandra Dwarkadas Didwaniya | First Director | — | — |
| Prashant Prakashchandra Didwaniya | First Director | — | — |
| Chandabai Prakashchandra Didwaniya | First Director | — | — |
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.