The upcoming Avax Apparels and Ornaments IPO has piqued the interest of investors, especially those exploring opportunities in the SME segment. This initial public offering, opening on January 7, 2025, provides an exciting prospect for investing in a company operating at the intersection of two promising industries: textiles and jewelry. Here’s an in-depth look at the IPO details, financials, business model, and investment potential.
About Avax Apparels and Ornaments
Avax Apparels and Ornaments Limited is a diversified company with operations in two major business segments:
1. Knitted Cloth Wholesale Trading
Avax specializes in sourcing knitted cloth from manufacturers and supplying it to wholesalers and ready-made garment manufacturers. Its operations are primarily concentrated in Punjab, which is a hub for textile production and consumption. Recently, the company has made significant investments in advanced machinery to strengthen its manufacturing capabilities and meet growing demand.
2. Online Silver Jewelry Retailing
The company also operates in the online retail space, offering a wide range of silver jewelry and articles. Their product catalog includes silver rings, bangles, chains, and other items. Avax plans to establish in-house manufacturing facilities for its silver jewelry division, aiming for better quality control and cost efficiency through backward integration.
Avax Apparels IPO Details
Parameter Details
IPO Opening Date January 7, 2025
IPO Closing Date January 9, 2025
IPO Type SME IPO (Fixed Price)
Issue Size ₹1.92 crore (2,74,000 equity shares)
Face Value ₹10 per share
IPO Price ₹70 per share
Minimum Lot Size 2,000 shares
Listing Platform BSE SME
Retail Quota 50%
NII Quota 50%
QIB Quota 0%
IPO Timeline
Event Date
IPO Open January 7, 2025
IPO Close January 9, 2025
Basis of Allotment January 10, 2025
Refunds Initiated January 11, 2025
Demat Credits January 12, 2025
Listing Date January 14, 2025
Company Financials
Avax Apparels has shown a consistent growth trajectory in both revenue and profitability over the past two years:
Financial Year Revenue (₹ Cr.) Profit (₹ Cr.)
2023 ₹14.70 ₹0.69
2024 ₹22.06 ₹1.38
The 2024 fiscal year saw a remarkable 50% growth in revenue and a near 100% increase in net profit, reflecting the company’s improving operational efficiency and market penetration.
Grey Market Premium (GMP)
As of now, the Grey Market Premium (GMP) for Avax Apparels’ IPO stands at ₹0, indicating no active trading in the grey market. While GMP can be a useful indicator of market sentiment, it is important to remember that it does not always predict the stock’s performance post-listing.
Strengths of Avax Apparels IPO
1. Diversified Business Model
Operating in two distinct sectors—textiles and jewelry—provides Avax with a diversified revenue stream, reducing dependence on any one industry.
2. Strong Revenue Growth
The company has demonstrated consistent growth in revenue and profitability, which is a positive sign for potential investors.
3. Expansion Plans
The company’s investment in advanced machinery and plans for in-house manufacturing for its silver jewelry segment reflect a clear growth strategy.
4. Niche Market Focus
By concentrating on the wholesale market for knitted cloth and online retail for silver jewelry, Avax has carved a niche for itself in competitive industries.
Risks to Consider
1. Intense Competition
Both the textile and jewelry industries are highly competitive, with numerous players vying for market share.
2. Small Issue Size
With an issue size of only ₹1.92 crore, the IPO may face liquidity concerns post-listing, which can affect trading volumes.
3. SME Listing Risks
SME-listed companies often have higher volatility and lower analyst coverage compared to mainboard companies, which may deter risk-averse investors.
Use of IPO Proceeds
The funds raised through the IPO will be utilized for the following purposes:
• Working Capital Requirements: To support the company’s day-to-day operations and expansion plans.
• General Corporate Purposes: For other business needs, including marketing and infrastructure development.
How to Apply for Avax Apparels IPO
Investors can apply for the Avax Apparels IPO through their broker’s online platform or by visiting the nearest branch of their brokerage firm. Here’s a quick step-by-step guide:
1. Login to your trading account.
2. Go to the IPO section and select “Avax Apparels and Ornaments IPO.”
3. Enter bid details, including the number of lots you wish to apply for.
4. Submit the application and approve the UPI mandate.
Ensure you have sufficient funds in your bank account before applying.
Should You Invest in Avax Apparels IPO?
Avax Apparels and Ornaments IPO presents an interesting opportunity for investors looking to diversify their portfolio in the SME space. The company’s recent financial performance, coupled with its growth plans, makes it an attractive prospect.
However, potential investors should carefully evaluate the risks, such as the competitive nature of the industries it operates in and the inherent risks of SME listings. Conducting thorough research and consulting with a financial advisor is highly recommended.
Conclusion
The Avax Apparels IPO offers a unique chance to invest in a growing company with a foothold in the textile and jewelry industries. While the company’s robust financial performance and expansion plans are encouraging, investors should weigh the risks associated with SME listings and market volatility.
Keep an eye on “WatchIPO” for the latest updates on the Avax Apparels IPO, including allotment status, listing price, and post-listing performance.
Disclaimer: This article is for informational purposes only and should not be considered financial advice. Always consult with a professional before investing in IPOs.
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