United Cotfab Ltd IPO: Review, Valuation, Opening Date & GMP

United Cotfab Ltd IPO: Complete Overview

United Cotfab Limited (Formerly United Cotfab LLP and United Cotfab Private Limited) has been operating since 25th August 2015 in the Textile Business. The company is engaged in the manufacturing of high-quality open-end yarn catering to the textile industry. The company is located in Gujarat.

Till March 2023, the company was taking part in the business of cotton yarn. But In April 2023, the company started the manufacturing of open-ended cotton yarn. Cotton yarn is a sort of yarn that is produced using cotton filaments. Cotton yarn comes in different thicknesses, known as yarn loads, which decide its appropriateness for various items. It is generally utilised in the material business for different applications, including sewing, and winding around.

United Cotfab Limited has set up an open-end spinning unit for manufacturing cotton yarn 7/10/16 counts with an estimated capacity of 7800 MTPA. The company plays an important role in its industry because India being the world's second-biggest maker of textiles and garments is the world's third-biggest exporter of textiles.

India has a 4.6% portion of the worldwide exchange of textiles and clothing. The Textile and clothing industry contributes 2.3% to the nation's GDP, 13% to industrial production, and 12% to exports.

As of November 30, 2023, the company has an absolute 85 workers out of a total of 114 employees.

Dear readers, you would be happy to know that the company is going to offer its IPO. Below are the important facts related to the United Cotfab IPO. You might be interested in investing in its IPO. So this Blog could be for you.

 

United Cotfab Ltd IPO Overview

United Cotfab IPO is set to open its subscription on June 13, 2024, and close on June 24, 2024, with a provisional listing date fixed as Monday, June 24, 2024. United Cotfab IPO will be listed on BSE and SME. The price of each share is set at Rs. 70. The minimum lot size for an application is 2000 Offers. The base amount of investment required by retail financial investors is ₹140,000. The minimum lot size investment for HNI is 2 lots (4,000 shares) amounting to ₹280,000.

Company Financial

United Cotfab revenue exceeded from 1.88 lacs on March 31, 2022, to 5596.72 lacs in September 2023 and profit after tax (PAT) increased to 295.18 lacs in September 2023 from 13.93 in March 2023. The company has seen growth in total assets, revenue, and PAT in the period from 31 March 2022 to 30 September 2023. 

(Amount in Lacs)

Period	30 Sep 2023	31 Mar 2023	31 Mar 2022
Total Assets	7470.82	5367.71	1559.95
Total Revenue	5596.72	64.02	1.88
PAT	295.18	13.93	1.60
Net Worth	1300.34	993.56	681.97
Reserve & Surplus	-	-	-
Total Borrowings	4262.11	3821.18	773.47
EBITDA	656.55	1.17	-0.28

 

Revenue Bifurcation

The revenue bifurcation of the company for the year ending 30th September 2023 and the last two financial years is as follows:

(Amount in Lacs)

Particulars	30 Sep 2023	31 Mar 2023	31 Mar 2022
Income from Operation	5584.17	44.2	-
Other Income	12.55	19.81	1.88
Total Income	5596.72	64.02	1.88
Expenses of materials, finance, Goods, etc	4894.89	40.58	-
Other Expenses	307.37	2.45	0.28
Total Expenses	5202.26	43.03	0.28
Profit Before Taxes	394.46	20.98	1.6
Profit After Taxes	295.18	13.93
Total Tax Expenses	99.28	7.05	-

 

Let’s see this graphically.

 

The revenue bifurcation of the company for the year ending 30th September 2023 and the last two financial years State wise is as follows:

State-Wise Revenue Distribution

 

 

Cash Flow from Operating Activities:

• Net cash flow from operating activities increased significantly from -687.74 lacs in 2022 to 73.66 lacs in 2023.

• Cash flow from operating activities increased significantly from -687.74 lacs in 2022 to 127.66 lacs in 2023.

• The operating profit before performing capital changes rose substantially from -0.28 lacs in 2022 to 663.92 lacs in 2023.

• The rise in performing capital adjustments contributed to a net fall in performing capital of -82.89 lacs in 2023 compared to -347.84 lacs in 2022.

Cash Flow from Investing Activities:

• Net cash involved in investing activities changed from -666.03 lacs in 2022 to -376.48 lacs in 2023.

• Cash flows were involved in the purchase of property, plant, and equipment, and long-term loans.

Cash Flow from Financing Activities:

• Net cash flow from financing activities fell from 1349 lacs in 2022 to 302.66 lacs in 2023.

• Cash flows were involved in the issuance of shares, and Security Premium

• Net decrease/ increase in cash & cash equivalents changed to -0.16 lacs in September 2023 from -4.77 lacs  in March 2022

• Cash and cash equivalents at the start of the year changed to 1.09 lacs in September 2023 from 20.58 lacs in March 2022

• Cash and cash equivalents at the end of the period changed to 0.93 lacs in September 2023 from 15.81 lacs in March 2022

 

The below table depicts the company’s Total Equity, Total Assets, and Total non-current Assets for the year ending 30th September 2023, and the last two financial years.

Total Equity, Total Assets, and Total non-current Assets 

(Amount In Lacs)

 

 

The Objective of the Issue

The Issue Proceeds from the Fresh Issue will be utilized towards the following objects:

1. To Meet Working Capital Requirements

2. General Corporate Purposes

3. To meet Public Issue Expenses

 

Peers of United Cotfab Ltd IPO 

Evaluation

The IPO issue price is set at Rs. 70 per share. 

Evaluation of P/E Ratio

The P/E Ratio of United Cotfab Ltd IPO is not available.

Comparative Analysis with Listed Peers

The average P/E Ratio of the industry is 75.84.

 

IPO's Strengths 

• Raw materials i.e. cotton in the local domestic market are easily available

• Low-cost labourers are easily available in nearby locality

• Gujarat has an advanced eco-framework for offering help to the Textile Industry in the form of cotton

 

IPO’s Weaknesses 

• Cotton is a commodity item so any vacillation in the cost of cotton could influence production costs that will ultimately reduce profit margin.

• Obtaining raw materials at cutthroat rates to ensure the least effect on production costs.

 

IPO GMP Today

The Latest GMP of the United Cotfab Ltd IPO is Rs. 13.

 

United Cotfab Limited IPO Timetable (Tentative)

United Cotfab Ltd IPO is scheduled from June 10 to June 12, 2024, with allotment on June 13, refund initiation on June 14, and listing on June 18, 2024.

 

 

United Cotfab Limited IPO Details 

United Cotfab Ltd IPO with a face value of Rs.10 per share is set to start on June 13 and close on 19 June and will offer a total issue size of 5,184,000 shares with a price band of Rs. 70 per share aggregating up to Rs.36.29 crores.

 

United Cotfab Limited IPO Lot Details 

United Cotfab Ltd IPO allows retail investors to invest in a minimum of  2000 shares at Rs.1,40,000, and a maximum is also the same., while for HNI investors, the minimum lot is 2 (4000 shares) at Rs.2,80,000.

 

United Cotfab Limited IPO Reservation

Promoters and Management of United Cotfab Limited IPO

The promoters of the company are Mr. Nirmalkumar Mangalchand Mittal and Mr. Gagan Nirmalkumar Mittal. 

Share Holding Pre-issue in this scheme is 100% and Share Holding Post-issue is 69.84%.

 

United Cotfab Limited IPO Lead Managers:

• Beeline Capital Advisors Pvt Ltd

 

Dividend Policy

The company has not declared any dividends since incorporation and also not in the current Fiscal.

 

 

 

Conclusion

The company was primarily involved in the fabrics trading but later on went to cotton yarn manufacturing. The company noticed high performance just in one year. As per FY24 super earnings, the issue appears fully priced. The company is offering an IPO in the coming days of this month. Based on last year's performance and facts, it is a good idea to invest in this IPO. We hope this blog will be really helpful in knowing about the factual data of the company, and its performance. If the data, and facts presented in this blog attract you then you can think of taking part and leverage the benefits that it will provide in the market. However, we advise our potential readers to first consult their financial advisor before making any investment decision in this regard.

Finowings IPO Analysis

Hope you enjoyed the Finowings IPO Analysis. We tried our best to give every required detail about the company that you should know before applying to the IPO. 

You must consult your financial advisor before making any financial decisions. 

To Apply for the IPO, Click Here.

To Read the Prospectus of the Company Click Here to Download the DRHP.

 

Disclaimer: This IPO analysis is only for informational purposes and should not be considered as investment advice. Always do your research and consult with a financial advisor.

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