Angel Fibers Ltd. Investor Presentation - 2018
Disclaimer This Investor Presentation has been prepared by Guiness Corporate Advisors Pvt. Ltd. in consultation with Angel Fibers Limited and does not constitute a prospectus or placement memorandum or an offer to acquire any securities. This presentation or any other documentation or information (or any part thereof) delivered or supplied should not be deemed to constitute an offer. No representation or warranty, express or implied is made as to, and no reliance should be placed on, the fairness, accuracy, completeness or correctness of such information or opinions contained herein. The information contained in this presentation is only current as of its date. Certain statements made in this presentation may not be based on historical information or facts and may be forward looking statements, including those relating to the general business plans and strategy of Angel Fibers its future financial condition and growth prospects, future developments in its industry and its competitive and regulatory environment, and statements which contain words or phrases such as will, expected to, horizons of growth, strong growth prospects, etc., or similar expressions or variations of such expressions. These forward-looking statements involve a number of risks, uncertainties and other factors that could cause actual results, opportunities and growth potential to differ materially from those suggested by the forward-looking statements. Further, no representation or warranty expressed or implied is made nor is any responsibility of any kind accepted with respect to the completeness or accuracy of any information. Also, no representation or warranty, express or implied, is made that such information remains unchanged in any respect as of any date or dates after those stated herein with respect to matters concerning any statement made in this Investor Presentation. Company may alter, modify or otherwise change in any manner the content of this presentation, without obligation to notify any person of such revision or changes. This presentation cannot be copied and disseminated in any manner. No person is authorized to give any information or to make any representation not contained in and not consistent with this presentation and, if given or made, such information or representation must not be relied upon as having been authorized by or on behalf of the company. This presentation is strictly confidential. The earlier versions of this presentation, were in draft form, and should not be circulated or referred to by any person.
Company Overview Industry Overview Financial Snapshot Issue Highlights
Company profile 1 Incorporated in 2014, primarily in the business of spinning of cotton yarn. The manufacturing facility with strong team of 140 people is situated at Kalavad in Jamanagar district of Gujarat state which is in the heart of cotton growing areas of Maharashtra and Saurashtra (region) of Gujarat. 2 Established a capacity of total 19,584 spindles having installed capacity of 4363MT per annum to manufacture cotton yarn 3 4 Promoters Mr. Ashok Dudhagara and Mrs. Prafulaben Dudhagara with hands on experience in Cotton industry including developing healthy relations with brokers dealing in Cotton and Cotton Yarn which helps the company to market our product in domestic and overseas market. Expanded the business and operations significantly during the past three years In FY 2017 & 2016, company s turnover (net) was Rs. 88.74 crore & Rs. 51.02 crore respectively and for the period ended Sep 30, 2017 it was Rs. 46.08 crore Company s profits for FY17, were Rs. 3.11 crore and for the period ended Sep 30, 2017 was Rs. 2.59 crore Our Vision is to provide world-class quality yarn at a competitive price to cater to the domestic as well as international markets also to build and maintain long-term relationship with customers by offering Best services.
Directors profile Mr. Ashok M Dudhagara CMD Mr. Ashok holds a Bachelor s Degree in Science specializing in Chemistry from Saurashtra University. He has an experience of over 11 years of experience in textile industry. He looks after purchase, sales, manufacture, finance and administrative unit of the Company Ms. Prafulaben A. Dudhagara (Executive Director) She had completed master of Art from Saurashtra University specializing in Home Science. She looks after the Human resource department of the Company Mr. Nirav Baldha (Independent Director) He holds a Bachelor s Degree in Commerce and has good experience in building businesses Mr. Ketanbhai Vadaliya (Independent Director) He holds a Diploma degree in the field of Mechanical Engineering Mr. Ankur Bakulesh Jani (Non Executive Director) He holds Diploma certification in the field of Mechanical Engineering
Favorable textile policy giving boost to the business Interest Subsidy by State Government on capital expenditure 7% Interest Subsidy by Central Government 2% VAT department concession Rs. 50.44 crore Power Excise duty exemption 15%
Product profile Current revenue mix is 80% sold to exports or domestic companies which caters to exports market and 20% for domestic consumption 100% Cotton Carded Yarn for Knitting and Weaving Ranges : NE 20s to NE 50s
Fully automated state of the art manufacturing facility
Fully automated state of the art manufacturing facility
Plant and Machinery Fully automated plant from start to finishing of the final product equipped with imported machines from across the world Sr. No. Description/Name of Machinery Vendors Unit (In Nos) 1. Blow room Trutzschler India Pvt. Ltd. 1 2. Card Trutzschler India Pvt. Ltd. 11 3. Breaker D/F Rieter India Pvt. Ltd. 2 4. Omegalap Rieter India Pvt. Ltd. 1 5. Comber Rieter India Pvt. Ltd. 6 6. Finisher D/F Rieter India Pvt. Ltd. 4 7. Speed Frame Electrojet Amchinery Private Limited 4 8. Ring Frame Rieter India Pvt. Ltd. 8 9. Ring Frame Rieter India Pvt. Ltd. 4 10. Winding (Link Coner) Murata Machinery Limited 12 11. Cleaners with SIRO/FD Uster Technologies AG Installed with each machine 12. Yarn Conditioning Plant Sieger Spintech Equipments Pvt. Ltd. 1 13. Humidification Draft Air India Pvt. Ltd. 1 14. Lab Equipments Uster Technologies AG 6
Manufacturing Process Input Cotton bale Lap Carded silver Manufacturing Process Blow-room Carding Pre-combed drawing Output Lap Carded silver Drawn silver Drawn Silver Lap former Lap Lap Combed Silver Drawn Silver Roving Spinning bobbing Combing Pre-combed drawing Simplex Ring-spinning Winding (Auto corner) Combed silver Drawn Silver Roving Yarn (Spinning lobbing) Cone
Leading customers
Competitive strengths Experienced Management State of Art Infrastructure Quality Assurance Favourable Government Policies Promoters have 11 years of experience in Cotton ginning and pressing, spinning and various other activities. We believe that the experience of our management team and its in-depth knowledge of business will enable us to continue to take advantage of both current and future opportunities. Cotton yarn spinning unit with 19,584 spindles of 4363MT pa capacity Specialize in 30s Ne Combed and 40s Compact variety We have procured fully automatic plant for spinning yarn with state of the art modern machines from Germany and Japan in order to produce yarn of export quality Company adheres strictly on supplying quality products. Each products passes through strict quality checks Quality assurance measures include checking of all raw materials and production process and intensive care is taken to determine the standard of each and every product dispatched. Unit is registered under EPCG scheme for 100% Custom Duty Exemption and 2% Interest Subsidy on Term Loan from Ministry of Textiles as well as 7% Interest Subsidy from State Govt. Also it is eligible for electricity subsidy of Re 1 per unit in electricity charges from State Government and VAT, now GST Exemption on capital cost of Project
Growth Drivers Expanding Capacity Continuously expanding capacities in spinning and will enter in to forward integration of manufacturing fabric Operational Efficiencies Leading customers Increase Geographic al Presence Fully integrated and automated plant with less dependent on labour completely imported plant from across the world Boasts of leading textile players as its clients, like Donear, Welspun, Excel Enterprises, Vicky Fashion, Sangam Suitings, Siyaram s, Relishah Exports and also deals with leading merchant exporters high quality yarn Our emphasis is on expanding the scale of our operations as well as growing our supply chain network, which we believe will provide attractive opportunities to grow our client base and revenues. Cost Effective We intend to maintain the cost competitiveness and offer the quality products at reasonable prices.
Proven business model with potential to be a large textile player SWOT Strengths: Well established business, proven business model and tested growth Excellent track record with loyal client base Integrated value chain with controls on sourcing, manufacturing, distribution and selling Weakness: Capex intensive Opportunities: Forward integration into fabric manufacturing Geography expansion, category expansion Economies of scale for better realization and cost optimization after expanding the current capacity Threats: Any change in government policy or removal of subsidies Labour Laws, seasonality, geographic dependency, raw material availability
Company Overview Industry Overview Financial Snapshot Issue Highlights
Favorable market, good growth trends and positive outlook on the industry USD 137 bn 2016 USD 226 bn 2023 Indian Textile Ind is pegged to grow from USD 137 bn in 2016 to USD 226 bn by 2023. Central government policy aims to achieve USD 300 bn worth of textile exports by 2024-25 and create an additional 35 mn jobs. Production of raw cotton in India grew from 28 mn bales in FY07 to 35 mn bales in FY17. Cotton s high prices in 2016-17 will encourage farmers to grow more cotton in 2017-18 The area under cotton cultivation will increase by 7 per cent to reach 11.3 mn hectares in 2017-18, due to better returns on improved crop yield in 2016-17. Indian khadi products sales increased by 33% year-on-year to Rs. 2,005 crore in 2016-17and is expected to exceed Rs. 5,000 crore sales target for 2018-19, as per Khadi and Village Ission (KVIC). Source: https://www.ibef.org/exports/apparel-industry-india.aspx
Leveraging the export base of India India is the world's 2nd largest manufacturer and exporter of textiles and apparels, with a massive raw material and Manufacturing base. India took the top spot in market share in the men/boys knitwear shirts cotton' category with respect to garment exports to the US between Jan-Jun 2017 During FY17, India exported textile items worth USD 37 bn. Ready made garments had a share of 48% in these exports and had reached USD 17.5 bn. During the same period, fiber, yarn, fabric, and made ups exports reached USD 2.5 bn, USD 5.3 bn, USD 4.3 bn, and USD 4.7 bn, respectively. Handicrafts reached USD 443.64 mn during the same period and had a share of 4.5% in overall textile exports
Notable Trends in Indian Textile s Sector Increasing investment in TUSF Scheme Ministry of textiles is encouraging investments through increasing focus on schemes such as TUSF & cluster development activities. TUSF for the textile sector to continue with an investment target of USD 24.8 bn. Ministry of Textiles released a subsidy of USD 260 mn in FY 17. Multi - Fibre Arrangement With the expiry of MFA in January 2005, cotton prices in India are now fully integrated with international rates. In 2014, the government has cleared 13 proposal of new textile parks in different states. Public Private Partnership The Ministry of Textiles commenced an initiative to establish institutes under the Public Private Partnership (PPP) model to encourage private sector participation in the development of the industry. Technical Textiles Technical textiles, which has been growing at around twice the rate of textiles for clothing applications over the past few years, is now expected to post a CAGR of 20% FY11-17.
Company Overview Industry Overview Financial Snapshot Issue Highlights
Key Figures Total Revenues 8,874 (INR in lakhs) EBITDA 1,749 (INR in lakhs) 5,102 4,608 971 879 2016 2017 Sept, 2017 2016 2017 Sept, 2017 PAT Networth (INR in lakhs) (INR in lakhs) 2,505 311 259 2,246 2,246 2016 2017 Sept, 2017 (565) 2016 2017 Sept, 2017
Balance Sheet: Liabilities
Balance Sheet: Assets
Profit and Loss A/c
Company Overview Industry Overview Financial Snapshot Issue Highlights
Issue highlights Issue Size Number of shares offered Initial Public Offering of up to 67,48,000 Equity Shares of Face Value of Rs.10 each of Angels Fibers Limited for cash at a price of ` Rs. 27 per Equity Share (including Share Premium of ` Rs. 17 per Equity Share) aggregating up to ` Rs. 18.2196 crore Sr. No. Name of the Selling Shareholder Category of Shareholders No. of Equity Shares offered for sale 1 Ashok Dudhagara Promoter Upto 55,50,000 2 Prafulaben Dudhagara Promoter Upto 11,98,000 Book Running Laed Managers Listing
Issue Highlights Issuer Offer Type Fixed price Details Particulars Angel Fibers Limited Fixed Price Issue Rs 27 per share Minimum Lot Size IPO Venue Offer Size 4000 Equity Shares & in multiples their off BSE SME 67,48,000 Equity Share of Rs. 10 each at a price of Rs. 27 per share Issue opens on 20 th February, 2018 Issue closes on 23 rd February, 2018 Offer Structure Market Maker Portion: 3,40,000 Equity Shares Net Issue Portion: 64,08,000 Equity Shares
ISSUER COMPANY LEAD MANAGER GUINESS CORPORATE ADVISORS PVT LTD ANGEL FIBERS LTD