Scarnose International SME
Listing performance
Scheduled dates
Tentative timetable — a past date is not confirmation the step completed
Issue details
- IPO date
- 14 Jun 2022 – 17 Jun 2022
- Listing date
- 27 Jun 2022
- Face value
- ₹10 per share
- Issue price
- ₹55 per share
- Lot size
- 2,000 shares
- Total issue size
- ₹6.60 Cr
- Market cap at offer price
- ₹17.33 Cr
- Promoter holding
- 99.99% → 61.90% pre-issue → post-issue
- ISIN
- INE0IXR01019
- Registrar
- Cameo Corporate Services Ltd.
- Lead managers
- Finshore Management Services Ltd.
- Registered office
- 503, Sun Square, Nr Hotel Nest, Off C.G.Road, Navrangpura, Gujarat
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 | 60,000 | — | — |
Application size
Minimum 2,000 shares per lot, in multiples, at ₹55
| Application | Lots | Shares | Amount |
|---|---|---|---|
| Retail (min) | 1 | 2,000 | ₹1,10,000 |
| S-HNI (min) | 2 | 4,000 | ₹2,20,000 |
| S-HNI (max) | 9 | 18,000 | ₹9,90,000 |
| B-HNI (min) | 10 | 20,000 | ₹11,00,000 |
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 (₹) | 1.76 | — |
| P/E (×) | 31.25 | — |
| Market cap | — | ₹17.33 Cr |
Key performance indicators
- Return on net worth
- 9.86%
- Debt / equity
- 0.85
- PAT margin
- 0.35%
- EBITDA margin
- 0.59%
- NAV per share
- ₹17.38
Single period as reported. Year-on-year movement is in the financials table below, where every period is published.
About Scarnose International SME
Scarnose International Limited was originally incorporated as Chordia Agro Products Private Limited on April 12, 2011, and subsequently renamed to Scarnose International Limited. The company began with trading of agriculture commodities but had no major business activity until March 2019. It then entered the cotton industry and started trading raw cotton, cotton bales, and yarn. From financial year 2019-20, the company began manufacturing ladies kurtis and dress materials through an outsourcing model under its domestic brand 'SCARNOSE'. The company sells its products in the domestic market with a focus on cotton-based textiles and apparel.
Company Analysis
from RHPScarnose International Limited is a trading and manufacturing company in the textiles industry, specializing in raw cotton, cotton bales, yarn, and ladies kurtis and dress materials through an outsourcing model.
Scarnose International Limited was originally incorporated as Chordia Agro Products Private Limited on April 12, 2011, and subsequently renamed to Scarnose International Limited. The company began with trading of agriculture commodities but had no major business activity until March 2019. It then entered the cotton industry and started trading raw cotton, cotton bales, and yarn. From financial year 2019-20, the company began manufacturing ladies kurtis and dress materials through an outsourcing model under its domestic brand 'SCARNOSE'. The company sells its products in the domestic market with a focus on cotton-based textiles and apparel.
Objects of the Issue
- Working capital requirements ₹250.56 Lakhs p.17
- Repayment of Unsecured Loan ₹289.44 Lakhs p.17
- General corporate purposes ₹65.00 Lakhs p.17
- Issue related expenses ₹55.00 Lakhs p.17
- To meet the working capital requirements ₹250.56 lakhs p.51
- To make the repayment of Unsecured Loan ₹289.44 lakhs p.51
- General Corporate Purposes ₹65.00 lakhs p.51
- To meet Issue Expenses ₹55.00 lakhs p.51
- General corporate purposes
Issue Structure
- Total Issue
- ₹660.00 Lakhs
- Fresh Issue
- 12,00,000 Equity Shares of face value of ₹10/- each for cash at a price of ₹55/- per Equity Share, aggregating to ₹660.00 Lakhs
- Offer for Sale
- Nil
- Price Band
- ₹55/- per Equity Share (Fixed Price)
- Lot Size
- 2,000 Equity Shares
- Face Value
- ₹10/- per Equity Share
Business Model
The company earns revenue through two primary channels: trading of raw cotton, cotton bales, and yarn; and manufacturing and selling of ladies kurtis and dress materials through an outsourcing model. In FY 2021-22, 100% of revenue came from 7-8 major customers, with revenues of ₹95,64,57,637. The company primarily engages in domestic sales.
Business Segments
SWOT Analysis
- • Established customer relationships with 7-8 major clients generating full revenue(p.20)
- • Low average cost of acquisition per share by promoters (₹14.36) versus IPO price (₹55)(p.21)
- • Strong growth trajectory with revenue increasing from ₹12.05 Cr (FY20) to ₹95.93 Cr (FY22)(p.28)
- • Established business relationships with cotton suppliers and customers(p.71)
- • Experienced and professionally qualified management team(p.71)
- • Rapid revenue growth trajectory(p.71)
- • Quality assurance focus throughout production(p.71)
- • Diversified product portfolio across trading and manufacturing(p.71)
- • Experienced, professionally qualified management with diverse industry backgrounds(p.127)
- • Rapid revenue growth trajectory over three years(p.129)
- • Positive net worth and strong asset base(p.137)
- • Positive cash accruals in recent years demonstrating operational viability(p.137)
- • Diversified product portfolio across cotton trading and readymade garments(p.127)
- • Extreme customer concentration with 7-8 customers representing 100% of revenue(p.20)
- • High supplier concentration with top 5 suppliers contributing 63.75%-63.88% of purchases(p.21)
- • Dependence on outsourced manufacturing model with limited quality control(p.21)
- • Sustained negative cash flow from operations across recent years(p.21)
- • Unsecured loans repayable on demand creating liquidity risk(p.23)
- • Registered office premises not owned by company(p.22)
- • Heavy dependence on key promoters and directors for strategic management(p.23)
- • High dependence on cotton trading business as primary revenue source(p.71)
- • New entrant to organized manufacturing segment with outsourcing model risk(p.71)
- • Limited insurance coverage(p.78)
- • Small workforce with limited capacity utilization determinants(p.78)
- • Limited scale relative to competitors(p.78)
- • Dependence on limited customer base for significant revenue portion(p.128)
- • High proportion of short-term debt with promoter financing dependence(p.118)
- • Minimal operational history with business commencing only from 2019(p.127)
- • Very thin profit margins on trading operations(p.128)
- • Limited working capital management reflected in trade receivables concentration(p.120)
- • Large textile industry attracting significant FDI and government support via PLI scheme(p.17)
- • Textile exports showing strong growth momentum with 50.86% increase in June 2021(p.17)
- • Expansion into domestic brand 'SCARNOSE' for ladies kurtis and dress materials(p.14)
- • Large domestic textile and apparel market valued at US$100 billion with growth potential(p.17)
- • Expansion in textile manufacturing and branded apparel segment(p.77)
- • Geographic expansion into new markets domestically(p.77)
- • Growing domestic textile and apparel market demand(p.68)
- • Government support through PLI scheme for textile manufacturing(p.68)
- • Leveraging established goodwill and market position(p.77)
- • Expansion through outsourced Kurti manufacturing with own 'Scarnose' brand(p.127)
- • Growth in textile and apparel sector driven by domestic consumption(p.127)
- • Leveraging strategic management expertise for business development(p.100)
- • Potential for repeated orders from existing customer base(p.129)
- • Access to capital markets for growth financing through SME listing(p.127)
- • Intense competition from established and unorganized players in textiles sector(p.22)
- • Seasonal nature of domestic dress materials business dependent on festivals(p.21)
- • Susceptibility to fashion trends requiring continuous product innovation(p.21)
- • Economic downturn affecting demand for textile products and pricing pressure(p.25)
- • Vulnerability to COVID-19 pandemic disruptions and future infectious disease outbreaks(p.22)
- • Government policy changes and regulatory amendments affecting textile industry(p.27)
- • Natural calamities including earthquakes, floods, and abnormal rainfall impacting operations(p.28)
- • Indian infrastructure constraints potentially disrupting business operations(p.28)
- • Highly competitive and fragmented textile industry with numerous players(p.78)
- • Volatility in raw material and cotton prices(p.77)
- • Rising labor costs impacting margins(p.77)
- • Dependency on cotton commodity market cyclicality(p.51)
- • Government policy changes affecting textile sector(p.77)
- • Vulnerability to changing consumer demand patterns(p.77)
- • COVID-19 pandemic impact on textile and trading sectors(p.128)
- • Increased competition in textile and apparel sectors(p.128)
- • Exposure to foreign currency and input price volatility in cotton trading(p.128)
- • Regulatory changes affecting textile and garment industries(p.128)
- • Macro-economic uncertainties and policy changes(p.128)
- • Rapid technological advancement risk in textile manufacturing(p.128)
Promoters
| Name | Role | Pre-Issue | Post-Issue |
|---|---|---|---|
| Shah Vimalkumar Mishrilal | Promoter | 49.996% | 30.95% |
| Hitesh Loonia | Promoter | 49.996% | 30.95% |
| Shah Vimalkumar Mishrilal | Promoter | 49.996% | 30.951% |
| Hitesh Loonia | Promoter | 49.996% | 30.951% |
| Shah Vimalkumar Mishrilal | Promoter | 49.99% | 30.951% |
| Hitesh Loonia | Promoter | 49.99% | 30.951% |
| Mishrilal Shah | 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.