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Shri Techtex IPO aggregating to ₹45.14 crore, comprises entirely of a fresh issue of 74.00 lakh shares in the price band of ₹ 51-61 per share. is worth ₹45.14 crore. Since there is no OFS portion, the fresh issue size will also the total size of the IPO in the case of Shri Techtex Ltd. The stock will get listed on SME segment of the NSE.Shri Techtex Limited, is engaged in the business of Polypropylene (PP) Non-Woven Fabric manufacturing.

About Shri Techtex Limited:

• Shri Techtex Limited is a manufacturer of polypropylene (PP) non-woven fabric.
• The company was founded in 2011 and is headquartered in Ahmedabad.
• Shri Techtex Limited manufactures a variety of PP non-woven fabrics, including spunbond, meltblown, and hydroentangled fabrics. These fabrics are used in a variety of applications, including:
  • Ecological applications: The company’s PP non-woven fabrics are used for ecological applications, such as organic farming, hospitals, health care, nursing homes, home furnishing, vehicle upholstery seat fabrication, Mattress & furniture covering, ecological packaging, industrial and consumer goods.
  • Medical applications: The company’s PP non-woven fabrics are used for medical applications, such as wound care, surgical gowns, and masks.
  • Industrial applications: The company’s PP non-woven fabrics are used for industrial applications, such as filtration, insulation, and geotextiles.

• Its manufacturing facility is situated at Village Simaj in Dholka Taluka in Ahmedabad District of Gujarat. The manufacturing facility is well connected with near about transport hubs. The manufacturing facility is spread across 41548 sq. meters. The manufacturing facility is installed with manufacturing capacity of 3600 MT PP non-woven fabric per annum.
• As on June 30, 2023, it had total 98 Employees including contractual workforce.
• Shri Techtex Lt is now only engaged in one single line of product viz. polypropylene woven fabric and other business have been hived off.
  

Anchor Investors

Shri Techtex IPO: Salient Points

• The current Indian technical textiles market is estimated at USD 19 Bn, growing at a CAGR of 12% since past five years.
• Its products are widely used in various application for Geotextile, Horticulture, Furniture, Construction and Healthcare etc. This benefits it from less dependency on one industry,
• Company intends to use fresh funds raised through the IPO for construction of factory shed, commissioning of solar plant, purchase of machineries, working capital needs and for general corporate purposes.
• The profit margins and sales growth have been good.
• The company majorly catered to off shore customers. Now it has started exploring domestic market for products manufactured by it from financial year 2022-23.

• More than 90% of the exports are to USA.
• The products are sold on B2B to various industries such as Geotextile, Horticulture, Furniture, Construction and Healthcare etc..
• Company is planning for business expansion by adding new business lines viz. Manufacturing of Hot melt Coating Lamination and PP Multifilament Yarn. The company expect both machineries to be ready for commercial production by April 2024 having installed capacity of 3360 tons and 1200 tons per annum respectively.
• Company has vailed term loan and OD from Hongkong and Shanghai Banking Corporation Limited (HSBC Bank).
• Peer comparison with companies indicated in RHP.

• Its PE ratio is 16.7x (fy23 earnings).
• The lead book running manager is Beeline Capital Advisors. The IPOs lead managed by them have given a good return to the investors. These include names like Ahasolar Technologies, Pentagon Rubber, Remus Pharmaceuticals, Sotac Pharmaceuticals, RBM Infracon Limited, Transvoy Logistics, Dev Labtech, Viviana Power Tech, Vital Chemtech, Aristo Bio-Tech and Lifescience, Viaz Tyres, Vertexplus Technologies,
• I intend to apply in Shri Techtex IPO subject to availability of funds. This is based on my assessment of its performance and future expansion plans.
• GMP as reported on social media has been around Rs. 40. It has inched up as the issue closing comes near.
• Sunflower Broking is the market maker for the company. It has been the market maker in IPOs like Vertexplus Technologies, Sealmatic India etc.
• SME IPO are quite illiquid and volatile and exit options sometimes is delayed.

Standard disclaimer: I am not a SEBI registered analyst and above analysis is for educational purpose only. Iam a postgraduate in engineering & Management . Also Certified in some exams like NISM-Series-V-A: Mutual Fund Distributors Certification, NISM-Series-X-A: Investment Adviser (Level 1) Certification and NISM-Series-X-B: Investment Adviser (Level 2) Examination. This post is my view on the subject matter and is only academic and exploratory in nature. It is not meant to influence investment decisions of investors. I may have bias/vested interest in covered Stock/Mutual Funds/NCD etc. due to my own investment or leaning. Further my understanding of the areas on which I write may be imperfect or incomplete and data could be wrong due to limited time and resources at my disposal. Do check the data from company’s RHP and exchanges before making any decision. Please do your own due diligence as stock market/MF investments have high degree of inherent risk.