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Amsons Launches its IPO

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Amsons Apparels Ltd. is engaged in trading of fabrics. It offers silk, polyester, lace fabrics, netting fabrics, coarse cotton fabric, suiting, shirting, linen and jute fabrics. The company was incorporated in 2003 and is based in New Delhi, India.

The company is coming out with an initial public offering (IPO) of 32,50,000 equity shares of face value of Rs 10 each for cash at a fixed price of Rs 10 per equity share. The issue has opened on December 16, 2014 and will close on December 22, 2014. The shares will be listed on SME platform of BSE. The share is priced at par of its face value of Rs 10.

In fiscal 2014, fiscal 2013 and fiscal 2012, the company generated total revenue of Rs 321 lakh, Rs 209.69 lakh and Rs 146.26 lakh, respectively, and net profit after tax of Rs 4.26 lakh, Rs 1.54 lakh and Rs 0.88 lakh, respectively. The company has been able to increase its total revenue from fiscal 2012 to fiscal 2014 at a compound growth of 119.47% and its profit after tax has increased at a compound growth of 384.09% over the same period.

Established operations and proven track record: the company has established operations in textile and fabric trading operations and in the past the company has been successfully served varied range of clienteles.The company has a diversified products range in the textile industry which enables them to capitalize on such growth opportunities in the textile industry.The management of the company is well experienced in the textile industry as well as within their respective specialized segments. Its promoter Vinay Kumar with several years of experience plays the major role in the growth and development of the business.

The risk and concern is with their geographical constrained as the company’s operations are based in Delhi and National Capital Region of India. As a result, any localized social unrest, natural disaster or breakdown of services and utilities in and around Delhi could have material adverse effect on its business, financial position and results of operations. At present, major portion of the company’s turnover involves trading in fabrics and allied products, however the company’s name i.e. Amsons Apparels represents it as apparels traders, however its main objects permits it to trade in fabrics. Any misconception due to contrary nature of the company’s name and its present operations could have an adverse effect on its business, financial condition and results of operations.The company to a major extent, is dependent on external suppliers for its products in which it trades and it do not have any long-term supply agreements or commitments in relation to the same. Consequently, the company is exposed to price and supply fluctuations in cloth, and these fluctuations may adversely affect its ability to obtain orders and/or to execute them in a timely manner, which would have a material adverse effect on its business, results of operations and financial condition.

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