About the Company:
Shree Karni Fabcom Ltd is engaged in the manufacturing of technical textiles tailored for diverse industries such as luggage, medical arch support, chairs, shoes, and apparels.
Company’s product applications span a wide spectrum, including luggage, roofing, agriculture net, vehicle covers, tents, armed forces fabric, sports kits, chairs, medical arch support, umbrellas, and raincoats.
Company markets and sells the textiles under brand name ‘SKFL’.
Company has evolved from trading specialized technical textiles to establishing an automated manufacturing facility.
Company is specialised in converting yarn into fabric through knitting of fabrics and the manufacturing unit is equipped with automated machines for manufacturing of specialized technical textile.
Company has installed capacity of 70,000 meters per day for weaving, 90,000 kilos per month for knitting, 50,000 meters per day for poly acrylic and polyurethane coating, 15,000 meters per day for PVC / 8,000 meters per day for EVA lamination and 40,000 meters per day heat embossing.
Company’s Installed Capacity and Capacity Utilization:
Management Team:
- Mr. Rajiv Lakhotia (Designation: Managing Director)
- Mr. Manoj Kumar Karnani (Designation: Whole-time Director)
Revenue Bifurcation based on type customers:
Objectives of the Issue:
Fresh Issue: (Rs.42.95 cr)
- Funding the capital expenditure setting up a dyeing unit in Navsari District, Surat, Gujarat.
- Funding the purchase of new machinery proposed to be installed at our new unit proposed to be set up for manufacturing bags in Palsana, Surat, Gujarat, with an intent to expand our product portfolio.
- Funding working capital requirements of our Company.
- General Corporate Purposes.
Fund Utilisation:
| Particulars | Amount (Rs. in Crores) |
|---|---|
| Funding the capital expenditure setting up a dyeing unit in Navsari District, Surat, Gujarat | 30.70 cr |
| Funding the purchase of new machinery proposed to be installed at our new unit proposed to be set up for manufacturing bags in Palsana, Surat, Gujarat, with an intent to expand our product portfolio. | 18.68 cr |
| Funding working capital requirements of our Company | 5.0 cr |
Proposed Schedule of Implementation:
Comparisons of existing production capacity to the total production capacity expansion:
Peer Group Comparison:
- Company believes that there is no listed company specifically comparable in the similar line of segments in which Shree Karni Fabcom Ltd operates. Hence we cannot make any comparison.
Positives for the Company:
One of the leading specialized technical textile manufacturers with long standing market presence.
- Company has a rich history spanning over two decades and has has emerged as a pioneering force in the specialized technical textile sector.
- Company’s sustained market presence has not only facilitated nationwide expansion but has also positioned company as a reliable partner for contract manufacturers and traders.
- Company has consistently delivered specialized technical textiles that meet the stringent specifications of contract manufacturers for renowned brands.
Company has a Diversified Product Portfolio.
- Company had started with manufacturing and processing of woven fabrics and in the year 2020, commenced the production of woven products, like interlining woven and knitted woven.
- Further, company also decided to diversify the product portfolio, to include knitted fabrics to the product list and therefore started the manufacturing of coated fabrics and therefore our product portfolio now includes EVA and PVC laminated fabrics.
- Presently, company deals in quality products used in manufacturing of luggage, roofing, agriculture net, vehicle cover, housing and tents, armed forces fabric and sports-kits, chairs, medical arch support, umbrella and rain coats amongst others.
Setting up of new Dyeing Unit and another unit for manufacturing of bags.
- Inaugurating the commercial production in July 2020 with an initial capacity of 400 kilos per day for knitting fabrics, company took significant strides towards diversification. Subsequently, recognizing the market demand and trends, we expanded our operations by establishing a dedicated PVC and EVA lamination division in April 2023.
- This division, equipped with an installed capacity of 15,000 meters per day, bolstered our capabilities in PVC and EVA lamination.
- Looking ahead, with the proceeds from this Issue, company is poised to elevate the product portfolio even further.
- Company’s strategic plan includes the establishment of a cutting-edge dyeing facility and a forward integration initiative for the manufacturing of bags.
- The decision to diversify into bags manufacturing signifies company’s strategic move towards forward integration, allowing us to tap into a higher-margin segment.
- Company envision crafting high-quality bags leveraging our specialized technical textile expertise. This venture aligns with the prevailing trends in sportswear, rainwear, and the broader bag pack industry.
Diversifying and increasing penetration in markets.
- Company is engaged in manufacturing, processing and coating of woven fabrics for direct sale to customers domestically.
- The domestic market offers various opportunities in term of sub-geographic penetration and product/ market diversification which we intend to seize and increase our market reach domestically to explore untapped markets and segments as part of our strategy to mitigate market risk and widen growth prospects.
- Company shall continue to explore opportunities in different countries where we can supply value added products to enhance our geographical reach.
Company plans to Strengthen the marketing network.
- Presently, Company’s marketing and sales division consists of 3 members who are responsible for marketing products in the unorganized and the organized sector of the technical textile industry.
- Company intends to strengthen the existing marketing team by inducting personnel with expertise in the industry, who will supplement our existing marketing strategies in the domestic markets.
- Further, company also has plans to diversify business operations from weaving, knitting and coating of fabrics and EVA & PVC lamination of fabrics to also include dying.
- The move towards setting up a separate dyeing unit will help company add a new process line in our portfolio and therefore increase operations and customer base.
- With the use of company’s products by contract manufacturers of branded luggage and shoes manufacturers, company’s fabrics have a huge acceptability and inquiry all over India.
Financials of the Company:
| (in Crores) | FY 21 | FY 22 | FY 23 | Upto 30th Nov 23 |
|---|---|---|---|---|
| Revenue | 32.89 | 83.65 | 127.04 | 75.99 |
| Net Profit | 1.53 | 5.14 | 5.55 | 8.13 |
IPO Details:
| Details | Info |
|---|---|
| Issue Opens on | 6th March 2024 |
| Issue Closes on | 11th March 2024 |
| Issue Price | Rs.220 – 227 |
| Face Value | Rs.10 |
| Minimum Lot | 600 Shares |
| Minimum Investment | Rs.1,36,200 |
| Issue Constitutes | 26.47 % |
| Issue Size | Rs. 42.95 cr |
| Market Cap | Rs.195.8 cr |
| Listing at | NSE SME |
| Equity Shares Offered (Fresh) | 18,72,000 (Rs.42.95 cr) |
| Equity Shares Prior to the Issue | 52,00,000 |
| Equity Shares after the Issue | 70,72,000 |
Also Read : List of Upcoming IPO’s in India.
Also Read: List of Upcoming SME IPO’s in India.
Important Dates:
| Finalization of Basis of Allotment | on or Before 12th March 2024 |
| Initiation of Refunds | on or Before 13th March 2024 |
| Credit of Equity Shares: | on or Before 13th March 2024 |
| Listing Date: | on or Before 14th March 2024 |
IPO Valuation Parameters:
| Earnings Per Share (EPS) | Price To Earnings ratio (PE) | Return on Net Worth (RoNW) | Net Asset Value (NAV) |
|---|---|---|---|
| 11.10 | 20.45 | 21.34% | 260.22 |
| Company Contact Info: |
|---|
| Shree Karni Fabcom Limited Plot 188,189,190, Block No. 314, Rajhans Texpa, Village Baleshvar, Taluka Palsana, Surat – 394 317, Gujarat, India. Telephone: +91 262 235 0900 E-mail: shreekarni@skflindia.com Website: www.skflindia.com |
| Registrar to the Issue: |
|---|
| MAS Services Limited T-34, 2nd Floor, Okhla Industrial Area, Phase-II New Delhi- 110 020 Telephone: +91 112 638 7281/83 Facsimile: +91 112 638 7384 E-mail: ipo@masserv.com Investor grievance: investor@masserv.com |
| Lead Manager to the Issue: |
|---|
| Horizon Management Private Limited 19 R N Mukherjee Road, Main Building, 2nd Floor, Kolkata- 700 001,West Bengal, India. Telephone: +91 33 4600 0607 Facsimile: +91 33 4600 0607 Email ID: smeipo@horizon.net.co Website: www.horizonmanagement.in |
