United Cotfab
Listing performance
Scheduled dates
Tentative timetable — a past date is not confirmation the step completed
Issue details
- IPO date
- 13 Jun 2024 – 19 Jun 2024
- Listing date
- 24 Jun 2024
- Face value
- ₹10 per share
- Issue price
- ₹70 per share
- Lot size
- 2,000 shares
- Issue type
- Fixed Price issue
- Total issue size
- ₹36.29 Cr
- Market cap at offer price
- ₹120 Cr
- Promoter holding
- 100.00% → 69.84% pre-issue → post-issue
- ISIN
- INE0S0I01011
- Registrar
- Purva Sharegistry (India) Pvt.Ltd.
- Lead managers
- Beeline Capital Advisors Pvt.Ltd.
- Registered office
- Survey No.191, Village-Timba, Taluka-Dascroi, Timba, Dascroi, 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 | 2,60,000 | — | — |
Application size
Minimum 2,000 shares per lot, in multiples, at ₹70
| Application | Lots | Shares | Amount |
|---|---|---|---|
| Retail (min) | 1 | 2,000 | ₹1,40,000 |
| S-HNI (min) | 2 | 4,000 | ₹2,80,000 |
| S-HNI (max) | 7 | 14,000 | ₹9,80,000 |
| B-HNI (min) | 8 | 16,000 | ₹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 |
|---|---|---|
| EPS (₹) | 7.22 | 5.04 |
| P/E (×) | 9.70 | 13.89 |
| Price to book (×) | 6.19 | — |
| Market cap | — | ₹120 Cr |
Key performance indicators
- Return on net worth
- 63.89%
- ROCE
- 26.95%
- Debt / equity
- 3.42
- PAT margin
- 7.52%
- NAV per share
- ₹11.30
- Price to book
- 6.19
Single period as reported. Year-on-year movement is in the financials table below, where every period is published.
About United Cotfab
United Cotfab Limited, incorporated in 2015 as a limited liability partnership and converted to a public limited company in December 2023, is engaged in manufacturing open-end cotton yarn catering to the textile industry. The company's manufacturing process adheres to stringent quality standards backed by advanced technology and machinery. With a manufacturing facility established in April 2023 at Timba, Taluka-Dascroi, Ahmedabad, the company has an installed capacity of approximately 9,125 MT per annum. The facility employs modern automatic plant and machinery, with a comprehensive quality management system covering every stage of production. The company is promoted by Mr. Nirmalkumar Mangalchand Mittal and Mr. Gagan Nirmalkumar Mittal, who have combined experience of over 55 years in the cotton textile industry.
Company Analysis
from RHPUnited Cotfab Limited manufactures high-quality open-end cotton yarn for the textile industry in India.
United Cotfab Limited, incorporated in 2015 as a limited liability partnership and converted to a public limited company in December 2023, is engaged in manufacturing open-end cotton yarn catering to the textile industry. The company's manufacturing process adheres to stringent quality standards backed by advanced technology and machinery. With a manufacturing facility established in April 2023 at Timba, Taluka-Dascroi, Ahmedabad, the company has an installed capacity of approximately 9,125 MT per annum. The facility employs modern automatic plant and machinery, with a comprehensive quality management system covering every stage of production. The company is promoted by Mr. Nirmalkumar Mangalchand Mittal and Mr. Gagan Nirmalkumar Mittal, who have combined experience of over 55 years in the cotton textile industry.
Objects of the Issue
- To Meet Working Capital Requirements ₹2,470.00 Lakhs p.19
- General Corporate Purposes ₹886.07 Lakhs p.19
- To Meet Working Capital Requirements ₹2,470.00 lakhs p.73
- General Corporate Purposes ₹886.07 lakhs p.73
- Repayment of borrowings
Issue Structure
- Total Issue
- 5,184,000 Equity Shares aggregating to ₹3,628.80 Lakhs
- Fresh Issue
- 5,184,000 Equity Shares aggregating to ₹3,628.80 Lakhs
- Offer for Sale
- Nil
- Price Band
- ₹70/- per Equity Share
- Lot Size
- 2,000 Equity Shares (Bid Lot)
- Face Value
- ₹10/- per Equity Share
Business Model
The company manufactures and sells open-end cotton yarn to textile manufacturers, garment exporters, and distributors. Revenue is generated through the sale of cotton yarn in various weights and thicknesses used in textile applications including knitting, weaving, and crocheting.
Business Segments
SWOT Analysis
- • Promoters have 55+ years combined experience in cotton textile industry(p.17)
- • Advanced manufacturing technology and quality control systems in place(p.17)
- • Strategic location near cotton-growing regions(p.17)
- • Established relationships with diverse customer base(p.17)
- • Experienced promoters with 55+ years combined textile industry experience(p.112)
- • Strategic location near cotton-rich areas with developed industrial infrastructure(p.113)
- • Scalable business model with capacity to grow with demand(p.113)
- • Strong operational performance with 81.57% capacity utilization achieved in first year(p.114)
- • High return on equity of 72.76% in FY 2023-24(p.85)
- • Modern manufacturing facility with advanced technology(p.134)
- • Experienced management with 55+ years combined textile industry experience(p.134)
- • Strategic location near cotton-growing regions(p.134)
- • Comprehensive quality management system(p.134)
- • Strong customer relationships and reliable delivery track record(p.134)
- • Commitment to sustainable manufacturing practices(p.134)
- • Very limited operating history of manufacturing operations (commenced April 2023)(p.26)
- • High dependence on few customers for revenue (top 10 customers = 79.57% of FY24 revenue)(p.27)
- • High dependence on few suppliers (top 10 suppliers = 93.53% of FY24 purchases; group companies = 61.89%)(p.27)
- • Significant related party transactions (53.65% revenue from group companies in FY24)(p.27)
- • High debt levels with unsecured loans repayable on demand (₹1,192.05 lakhs as of March 31, 2024)(p.30)
- • Contingent liability related to EPCG export obligations (₹666.68 crore duty saved; must export ~US$ 50.56 million)(p.28)
- • Pending SEBI disciplinary penalty (₹48 crore joint liability with promoter on appeal)(p.20)
- • Land acquired from promoter-director within 5 years (₹50.85 lakhs in FY21-22)(p.29)
- • No trademark registration for corporate logo/name(p.30)
- • Heavy dependence on a small customer base(p.85)
- • Significant exposure to cotton price volatility affecting margins(p.114)
- • Dependence on few large suppliers for raw materials(p.85)
- • Very recent commencement of manufacturing operations (April 2023)(p.106)
- • Limited scale relative to listed peers with significantly lower revenue(p.82)
- • Significant dependence on related party funding(p.173)
- • High debt-to-equity ratio with substantial borrowings(p.160)
- • Recently commenced manufacturing operations with limited operational history(p.134)
- • Minimal cash reserves(p.160)
- • No dividend payment history(p.154)
- • Indian textile sector expected to grow at 10% CAGR to reach US$ 190 billion by 2025-26(p.18)
- • PLI scheme for textile manufacturers (₹10,683 crore incentive for MMF apparel, fabrics and technical textiles)(p.18)
- • India as world's 2nd largest textile producer with 4.6% global trade share and growth potential(p.18)
- • Textile exports expected to reach US$ 65 billion by FY26 (up from US$ 36.68 billion in FY22-23)(p.18)
- • Growing domestic textile demand driven by rising incomes and per capita consumption(p.114)
- • Significant export market growth potential for Indian textile products(p.114)
- • Government support through PLI scheme and other incentives for textile manufacturers(p.100)
- • Expected expansion of India's textile exports target to US$ 100 billion by 2030(p.100)
- • Geographic expansion opportunities beyond current Gujarat-focused customer base(p.114)
- • Production-Linked Incentive Scheme supporting textile manufacturing(p.126)
- • Export promotion through EPCG Scheme capital goods benefits(p.126)
- • National Textile Policy support for global market positioning(p.126)
- • MSME development support and incentives(p.126)
- • Capacity expansion potential with installed facility(p.134)
- • Concentration of business in Gujarat & Maharashtra (92.90% of domestic revenue in FY24)(p.27)
- • Dependence on single geographic market (100% revenue from domestic operations in India)(p.33)
- • Foreign exchange risk exposure with no hedging in place(p.33)
- • Technology obsolescence risk requiring continuous upgrades and significant capital investments(p.31)
- • Global economic slowdown forecast (growth slowing from 3.5% in 2022 to 2.9% in 2024)(p.17)
- • Indian economic slowdown risk and policy uncertainty(p.39)
- • Regulatory and licensing risks including need for approvals transfer post-conversion to Limited Company(p.28)
- • Operational risks including equipment breakdown, industrial accidents, and natural disasters(p.29)
- • Potential conflict of interests with group companies in similar business lines without non-compete agreements(p.26)
- • Volatility in global cotton commodity prices affecting production costs(p.96)
- • Intense competition from numerous domestic and international players(p.115)
- • Low barriers to entry and product differentiation in commodity yarn business(p.114)
- • Global economic slowdown and declining international trade affecting exports(p.97)
- • Regulatory and policy changes by government affecting business operations(p.114)
- • Regulatory compliance burden with multiple environmental legislations(p.127)
- • Import pressure and global competition in textile industry(p.126)
- • Contingent EPCG liabilities on capital goods imports(p.167)
- • Labor cost pressures and compliance with multiple employment laws(p.129)
- • Input price volatility in cotton and raw material costs(p.161)
- • Pollution control and waste management compliance obligations(p.128)
Promoters
| Name | Role | Pre-Issue | Post-Issue |
|---|---|---|---|
| Nirmalkumar Mangalchand Mittal | Promoter | 50.00% | 34.92% |
| Gagan Nirmalkumar Mittal | Promoter | 49.99% | 34.92% |
| Gagan Nirmalkumar Mittal | Promoter | 49.99% | 34.92% |
| Nirmalkumar Mangalchand Mittal | Promoter | 50.00% | 34.92% |
| Mr. Nirmalkumar Mangalchand Mittal | Promoter | — | 50.00% |
| Mr. Gagan Nirmalkumar Mittal | Promoter | — | 49.99% |
| Gagan Nirmalkumar Mittal | Promoter | — | — |
| Nirmalkumar Mangalchand Mittal | 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.