Aastha Spintex Limited is an established manufacturer and trader of carded, combed, and compact combed cotton yarns as well as cotton bales. The company primarily produces 100% cotton yarns spanning counts from Ne 26 to Ne 40, catering to diverse end-use segments like denim, terry towels, shirting, sweaters, socks, bottom wear, home textiles, and industrial fabrics. Through its integrated ginning and spinning operations, the company utilizes cotton bales for captive consumption to produce high-quality yarn while also supplying surplus bales to other spinning units. The company operates strictly within the Business-to-Business (B2B) space, supplying essential materials directly to domestic textile manufacturers, fabric processors, yarn exporters, and bulk purchasers. Additionally, Aastha Spintex utilizes a strategic reseller model, relying predominantly on '7 Seas Impex' to handle its broader market sales. This model enables the company to tap into markets outside of Gujarat and international export markets efficiently while maintaining a focused approach towards core production efficiency at its base. Aastha Spintex Limited serves a vast and expanding B2B client base, increasing from 78 customers in FY24 to 231 customers in FY25. Of these, approximately 14 customers have been associated with the company for over five years, demonstrating strong client retention. The reseller, 7 Seas Impex, is the company's single largest customer, accounting for significant portions of product sales, taking up 33.88% of the revenue in FY25 and 22.99% during the nine-month period ending December 31, 2025. The company's semi-automated, integrated ginning and spinning Manufacturing Facility is strategically located in Halvad, Morbi, Gujarat, covering a total built-up area of 65,762 square meters. It currently houses 15 compact ring spinning machines with an aggregate capacity of 25,920 spindles (or 7,700 MT per annum for yarn) alongside 28 ginning machines generating an annual capacity of 12,000 MT of cotton bales. Furthermore, the facility heavily relies on captive renewable energy (solar and wind) to manage production costs and run sustainable 24/7 operations. The facility boasts robust operational efficiency. For the nine-month period ending December 31, 2025, spinning capacity utilization stood at a solid 88.52% (5,134 MT) and ginning utilization was at 75.52% (6,797 MT). In the prior complete financial year (FY25), the capacity utilization peaked at an impressive 97.01% (7,436 MT) for spinning and 82.48% (9,897 MT) for ginning operations. As per financial performance, Aastha Spintex Limited has posted total income/net profits of Rs 239.69 Cr / Rs 1.06 Cr (FY23), Rs 305.67 Cr / Rs 16.29 Cr (FY24), Rs 352.17 Cr / 22.92 Cr (FY25) and Rs 314.02 Cr / 17.56 Cr (Q3 FY26). So as per previous financials data, company has shown steady growth, but debt increased three times from Rs 368.18 Cr in FY23 to Rs 1,303.21 Cr as of 9M FY26. Net Cash from Operating Activities collapsed from a positive Rs 610.89 Crores in FY23 to a negative Rs (92.00) Crores in FY25, and worsened to a bleeding negative Rs (387.70) Crores in 9M FY26. The company is recording accounting profits but burning immense cash. Company has an average EPS of Rs 6.20 and average RoNW of 17.06% for last three fiscals. Issue is priced at a P/BV of 2.69 as per NAV of Rs 50.53/- as on 31.12.25. If we attribute latest earnings of FY24, FY25 and annualised FY26 on equity post issue, then asking price is at a P/E of around 36.86, 26.20 and 25.65 respectively. As per RHP, comparison between listed peers are shown in the above market. On BRLM's front, BOI Merchant Bankers Limited, PNB Investment Services Limited are associated with this IPO, and has handled 2 IPOs in last three fiscal years. ( As on 23.06.26 ) As per financials, CSM Technologies Limited has shown average results, RoNW is 18.49% and P/E is 46.47, 41.40 and 29.75 respectively as per FY24, FY25 and annualised FY26 earnings. So issue looks fully priced, but negative cash flow, increase in debt and inventory are indicating risks. This IPO purely looks exit strategy for existing investors and no benefit to the company. Company is the leading non-ferrous metal recycler in terms of installed capacity, which is highly competitive business segment. So, we give NEUTRAL rating for this IPO. Readers must consult a qualified financial advisor prior to making any actual investment decisions.
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