The United Cotfab IPO began its subscription today, Thursday, June 13, and will continue until Wednesday, June 19. Each lot of the IPO consists of 2,000 shares, priced at ₹70 per share with a face value of ₹10.
United Cotfab specialises in producing high-quality open-end yarn for the textile industry. Their manufacturing process adheres to strict quality standards, utilizing advanced technology and machinery. The company is led by Nirmalkumar Mangalchand Mittal and Gagan Nirmalkumar Mittal, who together bring over 55 years of experience in the cotton textile industry.
As per the Red Herring Prospectus (RHP), United Cotfab’s price-to-earnings ratio (P/E) stands at 517.10. Comparable listed peers include Lagnam Spintex Ltd (P/E of 8.93), PBM Polytex Ltd (P/E of 209.12), and Vippy Spinpro Ltd (P/E of 9.47).
Allocation of shares for the United Cotfab IPO will be finalised by Thursday, June 20, with refunds commencing on Friday, June 21, and shares credited to allottees’ demat accounts on the same day. The IPO shares are scheduled to be listed on BSE SME on Monday, June 24.
United Cotfab IPO Subscription Status
On its first day, the United Cotfab IPO has been subscribed 1.71 times. The retail portion was oversubscribed by 2.78 times, while the Non-Institutional Investor (NII) portion received subscriptions for 35% of the offered shares.
As of 13:55 IST, the company received bids for 84,20,000 shares against the 49,24,000 shares available.
United Cotfab IPO Grey Market Premium (GMP) Today
The grey market premium (GMP) for United Cotfab IPO is +12, indicating that shares are trading at a premium of ₹12 in the grey market. This suggests strong investor interest above the IPO price.
Given the upper end of the pricing band and the current GMP, United Cotfab shares are expected to list at ₹82 per share, which is 17.14% higher than the IPO price of ₹70.
United Cotfab IPO Details
The United Cotfab IPO is valued at ₹36.29 crore, comprising a fresh issuance of 5,184,000 equity shares at a face value of ₹10 each. There is no offer-for-sale component.
Proceeds from the IPO will be utilised for working capital requirements, general corporate purposes, and covering public issue expenses.
Beeline Capital Advisors Pvt Ltd is the book-running lead manager, Purva Sharegistry India Pvt Ltd is the registrar, and Spread X Securities is the market maker for United Cotfab’s IPO.
United Cotfab IPO Review
Dilip Davda, contributing editor at Chittorgarh, commented on the IPO, noting that United Cotfab transitioned from fabric trading to cotton yarn manufacturing in April 2023, showing significant growth in its first full year. Despite concerns over sustainability in a competitive sector, the IPO is seen as fully priced based on strong FY24 earnings.
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