Table of Contents
United Cotfab Limited IPO Review: United Cotfab Limited is coming up with an IPO consisting of a fresh issue of 51,84,000 shares worth INR 36.29 crores. The company aims to meet working capital requirements and general corporate purposes.
United Cotfab Limited IPO – Important Dates
| United Cotfab Limited IPO Date | June 13, 2024 to June 19, 2024 |
| United Cotfab Limited IPO Listing Date | June 24, 2024 |
| United Cotfab Limited IPO Price | INR 70 per share |
| United Cotfab Limited IPO Lot Size | 2000 shares |
| United Cotfab Limited IPO Total Issue Size | INR 36.29 crores |
| United Cotfab Limited IPO Basis of Allotment | June 20, 2024 |
| United Cotfab Limited IPO Initiation of Refunds | June 21, 2024 |
| United Cotfab Limited IPO Credit of Shares to Demat | June 21, 2024 |
| United Cotfab Limited IPO Issue Type | Fixed PriceIssue IPO |
| United Cotfab Limited IPO Listing At | BSE SME |
United Cotfab Limited IPO – Company Profile
United Cotfab Limited produces high-quality open-end yarn for the textile industry, utilizing cutting-edge technology and machinery. Their meticulous procedure includes raw material selection, blending, spinning, winding, and strict quality control.
They operate a sophisticated, automated plant with innovative technology and competent experts to assure high-quality open-end yarn production. A thorough quality management system encompasses all manufacturing steps, increasing efficiency and profitability.
They carefully examine raw materials and finished yarns to ensure requirements are met. They are committed to sustainability, reducing waste and conserving energy. Strong client relationships, as well as an emphasis on quality, dependability, and prompt delivery, promote long-term collaborations. The managing directors of the company are Mr. Nirmalkumar and Mr. Gaggan Mittal.
To check United Cotfab Limited DRHP – Click here
United Cotfab Limited IPO Fundamental Analysis
United Cotfab Limited Technologies’ fundamentals research shows inconsistent results. Revenue has increased dramatically. Profitability, EPS, and RoNW have all improved, enhancing investor confidence. High inventory turnover suggests high sales and effective inventory management.
- Revenue Trend: The revenue for March 2023 is ₹44.20 lakhs. The revenue for the period ending March 2024 is INR 11,529.41 lakhs.
- Equity and Liabilities: Both equities and liabilities have consistently increased over time, indicating future growth and expansion. However, the debt-equity ratio has risen, reflecting a stronger reliance on debt financing.
- Profitability: Profit after tax (PAT) has increased from ₹1.60 lakhs in March 2022 to ₹866.65 lakhs in March 2024. This increase in profitability could boost investor confidence.
- Earnings per Share (EPS): The diluted EPS increased from ₹0.02 in March 2022 to ₹7.97 in March 2024, indicating better earnings per share for investors.
- Return on Net Worth (RoNW): The RoNW has increased from 0.23% to 63.89%, showing that the company is better able to earn returns on shareholder equity.
- Financial Position: Total assets have increased, indicating future business growth. However, the current ratio has risen, indicating stronger liquidity and probable difficulties in satisfying short-term obligations.
- Inventory Turnover Ratio: The Inventory Turnover Ratio has significantly increased, demonstrating effective sales and inventory management.
United Cotfab Limited IPO Financial Analysis
| Particular | As of 31 March 2022 | As of 31 March 2023 | As of 31 March 2024 |
| Revenue (₹ in lakhs) | – | 44.20 | 11,529.41 |
| Equity (₹ in lakhs) | 681.97 | 993.56 | 1388.71 |
| Expenses (₹ in lakhs) | 0.28 | 43.03 | 10,350.59 |
| Profit and Loss After Tax (₹ in lakhs) | 1.60 | 13.93 | 866.65 |
| Diluted EPS only (₹) | 0.02 | 0.14 | 7.97 |
| Return on Net Worth (%) | 0.23 | 1.40 | 63.89 |
| NAV per Equity Share (₹) | 6.63 | 9.65 | 11.30 |
| Total Assets (in lakhs) | 1,559.95 | 5,367.71 | 8,168.46 |
| Total Liabilities (in lakhs) | 877.97 | 4,374.15 | 6,779.75 |
| Debt Equity Ratio | 1.13 | 3.85 | 3.42 |
| Current Ratio (in times) | 0.61 | 1.15 | 1.39 |
| Inventory Turnover Ratio | – | 0.13 | 8.67 |
United Cotfab Limited IPO Peer Comparison
United Cotfab Limited specializes in textiles and has moderate revenue and EPS. Lagnam Spintex Limited shows high revenue and EPS, indicating robust performance. PBM Polytex Limited exhibits low revenue but high EPS and profitability. Vippy Spinpro Limited displays moderate revenue with high EPS and profitability.
| Company | Type of Financial | CMP (₹) | Revenue from Operations (₹ in lakhs) | Face Value per Equity Share (₹) | P/E Ratio | EPS (Basic) (₹) | RoNW (%) | NAV per Equity Share (₹ in lakhs) |
| United Cotfab Limited | Standalone | 70.00 | 44.20 | 10 | 517.10 | 0.14 | 1.40 | 9.65 |
| Lagnam Spintex Limited | Standalone | 49.4 | 30,465.93 | 10 | 8.93 | 5.53 | 10.35 | 53.36 |
| PBM Polytex Limited | Standalone | 89.92 | 20,220.84 | 10 | 209.12 | 0.43 | 0.24 | 183.75 |
| Vippy Spinpro Limited | Standalone | 172.8 | 15,632.26 | 10 | 9.47 | 18.25 | 15.02 | 121.50 |
United Cotfab Limited IPO Objective
The main objective of United Cotfab Limited is to meet working capital requirements.
- To Meet Working Capital Requirements: The firm plans to use INR 24.70 crores from the Net Proceeds of the Issue to cover its expected Net Working Capital requirements for FY 2024-25 and FY 2025-26.
- General Corporate Purposes: The INR 8.86 crore balance fund will be used for a variety of general corporate reasons, including land purchase, employee employment, strategic alliances, capital expenditure, working cash, and other business growth efforts.
United Cotfab Limited IPO Risks and Challenges
Legal entanglements, a lack of paperwork in a group company case, potential adverse outcomes affecting business, open-ended cotton yarn manufacturing, the absence of a Non-Compete Agreement, and a reliance on essential clients for revenue are among the dangers faced by United Cotfab Limited.
- They are involved in legal actions that span numerous levels and jurisdictions. Furthermore, a lawsuit involving a group corporation lacks paperwork. Adverse outcomes from these actions may have a significant impact on their business, finances, and operations.
- Their company produces open-ended cotton yarn, and other group organizations operate in comparable industries. There is no non-competition agreement in place. Failure to follow these guidelines may have a negative impact on their business and financial situation.
- Their revenue is primarily reliant on a few important customers, with the top ten customers making considerable contributions. Losing a customer can have a negative impact on sales, operations, and finances. Maintaining ties and attracting new clients is critical to business survival.
United Cotfab Limited IPO – Industry & Market Potential
India’s textile market reached $223 billion in 2021 and is expected to exceed $209 billion by 2029. Exports will focus on the United States, with a goal of $100 billion by 2030 and a PLI plan of $1.44 billion.
Textile manufacturing in India is reviving after the pandemic. Seven giant textile parks seek to entice investors. PM MITRA Park anticipates a Rs. 10,000 crore investment that will generate 300,000 jobs. The government intends to establish 75 textile hubs and launch a second PLI project.
India’s textile sector boasts a strong export position and competitive production costs. Exports totaled $36.68 billion in 2022-23, with significant development potential in medical textiles and composites.
United Cotfab Limited IPO Allotment Structure
United Cotfab Limited’s IPO allotment structure has three categories: Retail Individual Investors (RII) with investments under ₹2 lakhs, other investors with investments beyond ₹2 lakhs, and 260,000 shares reserved for Market Makers.
- Retail Individual Investors (RII): These individual investors apply for shares worth less than Rs. 2 lakhs.
- Other than retail individual investors: Such applications have a value that exceeds INR 2 lakhs.
- Market Makers Reservation: Market makers are allocated a specific percentage or number of shares. The corporation has reserved 260,000 shares for this purpose.
United Cotfab Limited IPO GMP
| IPO OPEN TO CLOSE DATE | IPO PRICE | LATEST GMP | ESTIMATED LISTING GAIN |
| 13 June to 19 June 2024 | 70 | 18 | 88 (25.71%) |
View Live GMP of All IPOs – Live GMP
Note: The information associated with the IPO is for educational purposes only. Consider with your financial advisor before investing in an IPO.
