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About United Techfab Ltd IPO
The IPO of United Techfab Ltd comprises entirely a fresh issue of up to 47,60,000 equity shares, with no offer for sale. It’s a fixed-price issue.
Objectives of United Techfab Ltd IPO
- Prepayment or repayment of all or a portion of certain outstanding secured borrowings availed by the company
- General corporate purposes
- To meet public issue expenses
United Techfab Ltd IPO Valuation
Industry Outlook
The market for Indian textiles and apparel is projected to grow at a 10% CAGR to reach US$ 350 billion by 2030. Moreover, India is the world's 3rd largest exporter of textiles and apparel. India ranks among the top five global exporters in several textile categories, with exports expected to reach US$100 billion.
Global apparel market is expected to grow at a CAGR of around 8% to reach US$ 2.37 trillion by 2030 and the Global Textile & Apparel trade is expected to grow at a CAGR of 4% to reach US$ 1.2 trillion by 2030. India’s home textile industry is expected to expand at a CAGR of 8.9% during 2023-32 and reach US$ 23.32 billion in 2032 from US$ 10.78 billion in 2023.
Company Information
United Techfab Ltd is primarily engaged in manufacturing and trading of Grey & Denim Fabrics (“Grey Fabrics”), Dyed Cloths and Yarn. The company manufactures various types of Grey Fabrics such as power stretch spandex denim, light weight denim, colour denim, poly denim, ecru denim, slub denim, over dyed denim and flat finish of various dimensions including 3/1, 2/1, 6+1, 10+1 denims.
United Techfab Ltd IPO Strengths
Capability to manufacture diverse range of Grey Fabrics through in-house weaving unit
As on the date of the draft prospectus, the company’s manufacturing facility at Miroli, Ahmedabad, Gujarat has a cumulative weaving capacity of 2,00,75,000 mtrs. per annum and has capability to produce Grey Fabrics in various designs such as plain weave, twill weave, dobby weave and satin weave.
Quality control ensuring standardised product quality
The company employs a reasonable quality control mechanism during the inspection of the fabrics such as colour fastness, residual shrinkage, stretchability and skew that are required to ensure that its finished product conforms with the standard quality. These tests are crucial in ensuring the quality and performance of fabrics and assist customers to understand how the fabrics will behave under different conditions, which aids in determining suitability, durability, and consumer satisfaction.
Risks of United Techfab Ltd IPO
- Market demand variability
The company’s business is vulnerable to variations in demand of grey and denim-based apparels and changes in consumer preferences, which could have an adverse effect on its business, results of operations and financial condition.
- Reliance on few customers
Substantial portion of the company’s revenues has been dependent upon few customers, with which it doesn’t have any firm commitments. The loss of any one or more of its major customers would have a material adverse effect on its business, cash flows, results of operations and financial condition.
- Dependence on few key suppliers
The company is primarily dependent upon a few key suppliers for procurement of raw materials. Any disruption in the supply of these raw materials or fluctuations in their prices could have a material adverse effect on its business operations and financial conditions.
All Financial Information about United Techfab
Comparison with peers
| Company Name | Revenue from Operations (in ₹ crores) | EPS in ₹ | Return on Net Worth (in %) | NAV per Equity Share (in ₹) |
|---|---|---|---|---|
United Techfab Ltd | 761.9050 | 3.19 | 9.41 | 33.97 |
Sanathan Textiles Ltd | 295.7504 | 18.60 | 10.50 | 177.22 |
Shanti Spintex Ltd | 505.8306 | 8.71 | 15.04 | 51.26 |
R&B Denims Ltd | 343.9889 | 3.09 | 12.23 | 9.99 |
Anchor Investor Bidding Date TBA
IPO Registrar and Book Running Lead Manager
- IPO Registrar: KFin Technologies Ltd is the registrar of the IPO.
- Book Running Lead Manager: Nirbhay Capital Services Private Ltd
Business Model
Primarily engaged in manufacturing and trading of Grey & Denim Fabrics, United Techfab Ltd manufactures various types of Grey Fabrics such as power stretch spandex denim, light weight denim, colour denim, poly denim, ecru denim, slub denim, over dyed denim and flat finish of various dimensions including 3/1, 2/1, 6+1, 10+1 denims.
The company offers Grey Fabrics in a diverse spectrum of shades such as indigo blue, IBST, sulphur black, sulphur grey, halogen blue and ecru colour which has weights ranging from 4.50 Oz/sq. yd to 22.00 Oz./sq. yd.
Company Growth Trajectory
The net worth of United Techfab Ltd increased from ₹28.2550 crores in FY 22 to ₹37.2332 crores in FY 24.
Market Position
The company’s manufacturing operations commenced with the installation of 60 sets of automatic shuttle Air Jet Looms during Phase 1 in the financial year 2015-16. It began its business as a manufacturer and trader of Grey Fabrics in the financial year 2016 -17. Subsequently, its manufacturing capacity was augmented through the installation of an additional 60 sets of automatic shuttle Air Jet Looms, along with ancillary machinery, during Phase 2 in the financial year 2019-20.
As on date of the company’s draft red herring prospectus, the company had 120 air jet looms installed at its manufacturing unit located at Miroli which has an annual installed capacity of weaving 2,00,75,000 mtrs. of Grey Fabrics.
United Techfab Ltd Profit and Loss
| Parameter | FY 24 | FY 23 | FY 22 |
|---|---|---|---|
Total Income (in ₹ crores) | 763.0842 | 673.0128 | 779.4046 |
Profit Before Tax (in ₹ crores) | 4.7184 | 7.3569 | 6.8442 |
Profit After Tax (in ₹ crores) | 3.5043 | 5.4879 | 5.1944 |
EPS in ₹ | 3.19 | 5 | 4.73 |
United Techfab Ltd Cash Flow Statement
| Parameter | FY 24 | FY 23 | FY 22 |
|---|---|---|---|
Profit Before Tax (in ₹ crores) | 4.7184 | 7.3569 | 6.8442 |
Net Cash Flow Generated from/ (utilised in) Operating Activities (in ₹ crores) | 6.0748 | 2.3791 | 27.9586 |
Net Cash Flow Utilised in Investing Activities (in ₹ crores) | (0.9705) | (0.2121) | (41.3759) |
Net Cash Flow Generated From/ (utilised in) Financing Activities (in ₹ crores) | (5.7331) | (9.8548) | 21.8606 |
Cash and Cash Equivalents at the End of the Period (in ₹ crores) | 0.1536 | 0.7824 | 8.4702 |
How to Check the Allotment Status of United Techfab Ltd IPO?
1. Visit the Registrar’s Website
- Visit the official website of KFin Technologies Ltd and choose ‘IPO Allotment Status’ under ‘Investors’
- Click on any of the links
- Select the IPO from ‘Select IPO’ dropdown
- Enter either Application Number, Demat Account or PAN
- Enter captcha and click on Submit to know the status
2. Check on the Bombay Stock Exchange Website
The Bombay Stock Exchange (BSE) also has an IPO allotment status page. Go to www.bseindia.com and find the 'Investor Services' tab. Under 'Investors Services', click on 'Status of Issue Application'. This will take you to the IPO allotment status page. On the BSE IPO page, follow these steps:
- Choose the Issue Type
- Select the Issue Name from dropdown
- Put in either your application number or PAN number
- Check the box ‘I’m not a robot’
- Click on ‘Search’ to know allotment status
How to Apply for United Techfab Ltd IPO?
- Log in to your Kotak Securities Demat account - Log in to your Demat account to access IPO investments. Next, select the current IPO section.
- Specify IPO details - Enter the number of lots and the price you wish to apply for.
- Enter UPI ID - After entering your UPI ID, click submit. This will place your bid with the exchange.
- Mandate Notification - Your UPI app will receive a mandate notification to block funds.
- Approve Request - Your funds will be blocked once you approve the mandate request on your UPI.
This article is for informational purposes only and does not constitute financial advice. It is not produced by the desk of the Kotak Securities Research Team, nor is it a report published by the Kotak Securities Research Team. The information presented is compiled from several secondary sources available on the internet and may change over time. Investors should conduct their research and consult with financial professionals before making any investment decisions. Read the full disclaimer here.
Investments in the securities market are subject to market risks, read all the related documents carefully before investing. Please read the SEBI-prescribed Combined Risk Disclosure Document before investing. Brokerage will not exceed SEBI’s prescribed limit.
United Techfab IPO FAQs
What is the United Techfab Ltd IPO?
The IPO of United Techfab Ltd comprises a fresh issue of up to 47,60,000 equity shares.
When will the IPO of United Techfab Ltd go live?
The exact dates of the IPO are yet to be announced.
Who is the MD of United Techfab Ltd?
Nirmalkumar Mangalchand Mittal is the MD of United Techfab Ltd.
From where can I read more about the IPO of United Techfab Ltd?
You can read more about the IPO of United Techfab Ltd from the company’s draft red herring prospectus here.
