Vaxtex Cotfab Limited

LISTED

SME IPO · IPO Guide

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Issue Price

₹24

Listed On

13 Jan 2020

Listing Price

₹24.10 (+0.42%)

Current Price LIVE

₹24.10 (+0.42%)

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Lot Size Calculator

Application	Lots	Shares	Amount
Retail	2	12,000	₹2,88,000
HNI Min	3	18,000	₹4,32,000

Vaxtex Cotfab has shown improvement in financials, RoNW is 7.82% and issue looks very fully priced as per FY19 earnings. Super earnings of Q1 FY20 raises concerns. Also this industry has very tough competition. Performance of BRLM is poor. Considering all these, we give 'AVOID' rating to this SME IPO.

As on Date	Combined (QIB + NII)	RII	Total
Shares Offered / Reserved	7,56,000	7,56,000	15,12,000
Day 1 27-12-19	42,000 (0.06)	1,98,000 (0.26)	2,40,000 (0.16)
Day 2 30-12-19	1,74,000 (0.23)	4,68,000 (0.62)	6,42,000 (0.42)
Day 3 31-12-19	2,34,000 (0.31)	7,14,000 (0.94)	9,48,000 (0.63)
Day 4 01-01-20	6,00,000 (0.79)	9,84,000 (1.3)	15,84,000 (1.05)
Day 5 02-01-20	11,34,000 (1.50)	16,32,000 (2.16)	27,66,000 (1.83)
Day 6 03-01-20	13,98,000 (1.85)	31,68,000 (4.19)	45,66,000 (3.02)

Started in 2005, Ahmedabad based Vaxtex Cotfab Limited is engaged in the business of Textile processing of fabric and trading. The Company does Processing (dyeing and finishing) of grey fabrics for shirting, suiting, and other accessories. It also works on an outsourcing basis for other fabric/garment companies. Vartex has a processing unit and a Packing and Storage unit located at Narol, Ahmedabad in Gujarat. The installed capacity of the processing unit is 12,00,000 meters/month for processing of various fabrics from natural and man-made fibres specializing in 100% cotton, Giza & Supima cotton blended fabrics, polyester viscose and polyester cotton. The company undertakes corporate orders for Finished Fabrics from brands. It also has a dedicated in-house Testing and Quality Control Team which undertakes testing and quality management. On a restated basis, for the last three fiscals, Vaxtex Cotfab Limited has posted turnover/net profits of Rs. 4.46 cr. / Rs. 0.02 cr. (FY17), Rs. 18.47 cr. / Rs. 0.17 cr. (FY18) and Rs. 22.02 cr./ Rs. 0.60 cr. (FY19). For Q1 of FY20, it has clocked in the net profit of Rs. 0.34 cr. on a turnover of Rs. 4.54 cr. Super increase in bottom line in Q1 of FY20 raises concern. For last 3 fiscals, Vaxtex Cotfab Limited has posted an average EPS of Rs. 0.78 and average RoNW of 7.82% respectively. The issue is priced at a P/BV of 1.63 on the basis of its NAV of Rs. 14.76 post issue. If we annualise Q1 FY20 earnings and attribute it to post issue paid-up equity capital then asking price is at a P/E of around 10.76. As per FY19 earnings, P/E is around 24. Comparison between peers is shown in above table. On BRLM's front, for CapitalSquare Advisors Private Limited this is the 2nd IPO in the last three fiscals. The last IPO was opened at a discount of (- 1.16%) and currently trading below issue price. (23.12.2019) Vaxtex Cotfab has shown improvement in financials, RoNW is 7.82% and issue looks very fully priced as per FY19 earnings. Super earnings of Q1 FY20 raises concerns. Also this industry has very tough competition. Performance of BRLM is poor. Considering all these, we give 'AVOID' rating to this SME IPO.

Fresh Issue

1
To acquire the Machinery ( Rs 0.59 Cr )To meet Working Capital Requirements ( Rs 2.50 Cr )General corporate purpose ( Rs 0.44 Cr )To meet the Issue expenses ( Rs 0.30 Cr )
2
To acquire the Machinery ( Rs 0.59 Cr )
3
To meet Working Capital Requirements ( Rs 2.50 Cr )
4
General corporate purpose ( Rs 0.44 Cr )
5
To meet the Issue expenses ( Rs 0.30 Cr )
6
All matter published here is purely for educational and information purposes only and under no circumstances should be used for making investment decision
7
Readers must consult a qualified financial advisor prior to making any actual investment decisions, based on information published on this applicatio
8
With entry barriers, SEBI wants only well informed investors to participate is such SME offer
9
With crazy recent listings, SME IPOs have started drawing attention of investors across the boar
10
However, as SME issues have entry barriers and continued low preference from broking community, any reader taking decisions based on any information published here does so entirely at own ris
11
Above information is based on information available as on date coupled with market perception

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Disclaimer

No financial information whatsoever published herein, should be construed as an offer to buy or sell securities, or as information to make investment decisions, or as an official confirmation of any transaction. All matter published herein is purely for educational and informational purposes only and under no circumstances should be used for making investment decisions. Readers must consult a qualified financial advisor prior to making any actual investment decisions.

💬 Community Discussion

3 Comments

M
mustufa shaikh 31 Dec 2019, 20:00

keysa he ipo
D
DEEPANGEORGE 30 Dec 2019, 19:47

Rs.144000 base price
M
Manoj Sharma 25 Dec 2019, 17:34

what is base price

Period	Total Income	Total Expenses	Profit After Tax (PAT)
Q1 FY 20	4.54	4.08	0.34
FY 19	22.02	21.14	0.60
FY 18	18.47	18.20	0.17
FY 17	4.46	4.42	0.02

Open Date	Dec 27, 2019
Close Date	Jan 03, 2020
Allotment Date	Jan 09, 2020
Listing Date	Jan 13, 2020
Face Value	₹ 10 Per Equity Share
Issue Price	₹ 24 Per Equity Share
Issue Size	Fresh Issue of Up to 15,96,000 with aggregating up to Rs 3.83/- Cr
Retail Min Lot	1 Lot (6,000 Shares - ₹ 1,44,000)
Lead Manager	Capitalsquare Advisors Private Limited

Company	P/B Ratio	P/E Ratio	RoNW	Total Revenue (Cr)
Vaxtex Cotfab Limited Current	1.63	24	12.73%	22.02
Kavita Fabrics Limited	0.73	-	- (0.04)%	1.91
SKS Textiles Limited	0.32	5.49	5.79%	173.69
Jakharia Fabric Limited	1.66	19.65	7.85%	37.15

Vaxtex Cotfab Limited

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