Table of content
Neelam Linens and Garments Introduction
Neelam Linens and Garments (India) Limited is a Maharashtra-based company specializing in the processing, finishing, and supplying of soft home furnishing products. Founded in 2010, Neelam Linens offers a diverse range of products, including bedsheets, pillow covers, duvet covers, towels, rugs, dohers, shirts, and garments. The company primarily caters to discounted retail outlets in India, the USA, Australia, and the Far East.
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Brief About Neelam Linens and Garments
History
Company was incorporated as private limited Company under the name “Neelam Linens and Garments (India) Private Limited”, under the provisions of the Companies Act, 1956 and Certificate of Incorporation was issued by the Registrar of Companies, Mumbai on September 22, 2010. The status of the Company was changed to public limited and the name of our Company was changed to “Neelam Linens and Garments (India) Limited” vide Special Resolution dated August 12, 2022. The fresh certificate of Incorporation consequent to conversion was issued on September 01, 2022 by the Registrar of Companies, Mumbai.
Summary of the business of Neelam Linens and Garments
Neelam Linens and Garments operate as a soft home furnishing company based out of Maharashtra, India, extending services to a global clientele, including USA, Australia and Far East. We specialize in the processing, finishing and supplying of bedsheets, Pillow cover, Duvet Cover, Towels, Rugs, Doher, Shirts & Garments predominantly for discounted retail outlets. Neelam Linens and Garments source surplus or slightly imperfect fabric from the domestic market, applying value-added services such as designing, digital printing, dyeing, stitching, embroidery, and other enhancements. Subsequently, we distribute these refined products to discounted retail outlets in diverse countries.
Verticals of Neelam Linens and Garments
- Processing and trading of products
- Bed sheet
- Towels
- Bed Sheets / Pillow covers
- Rugs
- Sale of licenses
Customer concentration
(except %, amount in ₹ lakhs)
| Particular | December 31, 2023 | March 31, 2023 | March 31, 2022 | March 31, 2021 | ||||
| Revenue | % | Revenue | % | Revenue | % | Revenue | % | |
| Top 1 | 2,511.53 | 42.41 | 3,724.55 | 35.96 | 3,928.73 | 38.7 | 2,518.75 | 32.21 |
| Top 3 | 3,305.63 | 55.82 | 4,606.51 | 44.48 | 7,132.74 | 70.25 | 5,257.49 | 67.23 |
| Top 5 | 3,506.78 | 59.22 | 5,244.03 | 50.64 | 7,471.89 | 73.6 | 5,536.62 | 70.8 |
| Top 10 | 3,730.58 | 62.99 | 5,549.51 | 53.59 | 7,654.04 | 75.39 | 5,843.81 | 74.73 |
Supplier concentration
(except %, amount in ₹ lakhs)
| Particular | December 31, 2023 | March 31, 2023 | March 31, 2022 | March 31, 2021 | ||||
| Amount of purchases of raw material | % of total purchases of raw material | Amount of purchases of raw material | % of total purchases of raw material | Amount of purchases of raw material | % of total purchases of raw material | Amount of purchases of raw material | % of total purchases of raw material | |
| Top 10 | 2,072.33 | 36.88% | 3,250.21 | 32.42% | 2,112.80 | 21.39% | 2,577.54 | 38.61% |
Revenue breakup
Product wise break-up
(except %, amount in ₹ lakhs)
| Product Category | December 31, 2023 | 2023 | 2022 | 2021 | ||||
| Revenue | % of Revenue | Revenue | % of Revenue | Revenue | % of Revenue | Revenue | % of Revenue | |
| Bed Sheets | 3,390.01 | 57.24 | 5,120.95 | 49.45 | 6,982.13 | 68.77 | 5,333.30 | 68.2 |
| Pillow Pairs | 294.78 | 4.98 | 353.63 | 3.41 | 521.71 | 5.14 | 497.48 | 6.36 |
| Towel | 75.98 | 1.28 | 78.34 | 0.76 | 121.17 | 1.19 | 136.01 | 1.74 |
| Hand Towel/Napkin | 22.32 | 0.38 | 42.53 | 0.41 | 92.61 | 0.91 | 77.98 | 1 |
| Shirts/T-shirts RoDTEP Duty | 15.67 | 0.26 | – | – – | – – | – | ||
| Credit Scrips /Import Licenses | 2,123.36 | 35.85 | 4,760.86 | 45.97 | 2,435.05 | 23.98 | 1,774.95 | 22.7 |
Revenue contribution from Geography presence
(except %, amount in ₹ lakhs)
| Particular | December 31, 2023 | March 31, 2023 | March 31, 2022 | March 31, 2021 | ||||
| Revenue | % | Revenue | % | Revenue | % | Revenue | % | |
| Domestic sales | 3,157.58 | 53.32% | 6,683.12 | 64.53% | 5,512.83 | 54.30% | 3,909.27 | 49.99% |
| USA | 2,718.00 | 45.90% | 3,488.95 | 33.69% | 4,639.84 | 45.70% | 3,766.22 | 48.16% |
| Australia | 46.54 | 0.79% | 184.24 | 1.78% | – | 144.22 | 1.84% | |
| Burundi (Africa) | – | 10.31 | 0.10% | – | – | |||
Industry Outlook
Textiles and Apparel industry in India
India is the world’s second-largest producer of textiles and garments. It is also the sixth-largest exporter of textiles spanning apparel, home and technical products. India has a 4.6% share of the global trade in textiles and apparel. India is the world’s 3rd largest exporter of Textiles and Apparel. The textiles and apparel industry contributes 2.3% to the country’s GDP, 13%to industrial production and 12% to exports. The textile industry has around 45 million workers employed in the textiles sector, including 3.5 million handloom workers. India’s textile and apparel exports (including handicrafts) stood at US$ 44.4 billion in FY22, a 41% increase YoY. The Indian textile industry has made a mark in the world with its innovative and attractive products. Total textile exports are expected to reach US$ 65 billion by FY26. The Indian textile and apparel industry is expected to grow at 10% CAGR from 2019-20 to reach US$ 190 billion by 2025-26. The ₹ 10,683 crore (US$ 1.44 billion) PLI scheme is expected to be a major boost for textile manufacturers. The scheme proposes to incentivize MMF (man-made fibre) apparel, MMF fabrics and 10 segments of technical textiles products.
EXPORT HAVE POSTED STRONG GROWTH OVER THE YEARS
Exports of textiles Ready-made garment (RMG) of all textiles, cotton yarns/fabrics/made-ups/handloom products, man-made yarns/fabrics/made-ups, handicrafts excl. handmade carpets, carpets and jute manufacturing. including floor coverings) stood at US$ 44.4 billion in FY22. India’s RMG exports are likely to surpass US$ 30 billion by 2027, growing at a CAGR of 12-13%. During (April- March) 2022-23, the total exports of textiles stood at US$ 36.68 billion. Textile exports reached US$ 44.4 billion in FY22, a 41% YoY growth.
FY20, FY21, FY22 exports include textile yarn fabric, made-up articles; exports include RMG of all textiles, cotton yarn/fabrics/made- ups/handloom products, man-made yarn/fabrics/made-ups, handicrafts excluding handmade carpets, carpets, jute manufacturing including floor coverings.
India’s Top Ten Export Markets of Textile & Apparel products including Handicraft
| Country Export | 2022-23 USD Million | % Share |
| USA | 10,468 | 29% |
| EU-27* | 7,670 | 21% |
| Bangladesh | 2,533 | 7% |
| UK | 2,105 | 6% |
| UAE | 2,087 | 6% |
| Sri Lanka | 726 | 2% |
| Turkey | 719 | 2% |
| Australia | 657 | 2% |
| Saudi Arab | 577 | 2% |
| Canada | 572 | 2% |
| Sub-total | 8,570 | 23% |
POLICY SUPPORT & INCENTIVES
- Production linked incentive (PLI) scheme:
- The PLI Scheme for Textiles to promote production of Manmade Fibre (MMF) apparel, MMF Fabrics and Products of Technical Textiles in the country to create 60-70 global players, attract fresh investment of USD 2.5 Bn approximately and generate almost 7.5 lakh new employment opportunities. The Production-Linked Incentive (PLI) Scheme for Textiles products: MMF segment and technical textiles is envisaged to enhance India’s manufacturing capabilities and enhancing exports with an approved financial outlay of Rs 10,683 crore over a five year period. The objective is to enable Textile sector to achieve size and scale and to become competitive.
- 100% FDI under automatic route:
- Has enabled key global technical textiles players like Ahlstrom, Johnson & Johnson, Du Pont, Procter & Gamble, 3M, SKAPS, Kimberly Clark, Terram, Maccaferri, Strata Geosystems to start playing in India
- PM-MITRA:
- To attract investment for ‘Make In India’ initiative and to boost employment generation through setting up of 7 (Seven) PM Mega Integrated Textile Region and Apparel (PM MITRA) Parks in Greenfield/Brownfield sites with world class infrastructure including plug and play facility with an outlay of USD 570 Mn for a period of five years.
- Scheme for capacity building in textile sector (SAMARTH):
- To address the skilled manpower requirement across textile sector, the scheme was formulated, under the broad policy guidelines of “Skill India” initiative and in alignment with the framework adopted for skilling programme by Ministry of Skill Development and Entrepreneurship.
- National Technical Textiles Mission:
- Mission launched with a view to position the country as a global leader in Technical Textiles and improve the penetration level of technical textiles in the country Mission is divided into four components: Research, Innovation and Development, Promotion and Market Development, Export Promotion and Education and Skill Development. With a total outlay of USD 190 Mn, it will be set up for a four- year implementation period from FY 2020-21 to 2023-24.
- Status of Budget Utilization:
- During the initial 2 years, the fund utilization was for meeting the liability of previous scheme i.e ISDS. Year-wise utilization of funds is as below:
(Rs. In crores)
| Financial Year | Budget Estimate | Revised Estimate | Budget Utilized |
| 2017-18 | 173.99 | 100.00 | 100.00 |
| 2018-19 | 200.00 | 42.00 | 16.99 |
| 2019-20 | 100.50 | 102.10 | 72.06 |
| 2020-21 | 150.00 | 100.00 | 90.70 |
| 2021-22 | 100.00 | 90 | 85.69 |
| 2022-23 | 100.00 | 25 | 7.29 |
| TOTAL | 824.49 | 459.10 | 372.73 |
The scheme of Rebate of State and Central Taxes and Levies effective from March 2019 has been continued till 31st March 2024 for exports of Apparel/Garments and made-ups.
- Remission of Duties and Taxes on Exported Products (RoDTEP):
- Scheme for Remission of Duties and Taxes on Exported Products (RoDTEP) has been notified by Department of Commerce for reimbursement of Central, State and local level taxes/duties/levies, which are incurred in the process of manufacture and distribution of exported textile products covered under chapter 50-60. This will lead to cost competitiveness of exported products in international markets and better employment opportunities in export oriented manufacturing industries. The scheme is going to give boost to the domestic industry and Indian exports providing a level playing field for Indian producers in the International market so that domestic taxes/ duties are not exported.
- Export Promotion Councils:
- There are eleven Exports Promotion Councils (EPCs) representing various segments of the textiles & apparel value chain, viz. readymade garments, cotton, silk, jute, wool, power loom, handloom, handicrafts and carpets. These Councils work in close cooperation with the Ministry of Textiles and other Ministries to promote the growth and export of their respective sectors in global markets. The Councils participate in textiles and apparel fairs and exhibitions and standalone shows in India and in overseas markets to enhance exports and access new markets.
Management of Neelam Linens and Garments
Promoters & Board of Directors
- Company is promoted by Kantilal Jethva, and Bhavin Jethwa.
Board of directors of Neelam Linens and Garments
| Name | Designation |
| Kantilal Jethva | Whole-time director |
| Bhavin Jethwa | Managing Director |
| Manish Dwarkaprasad Kamalia | Non- Executive Independent Director |
| Dinkal Manish Doshi | Non- Executive Independent Director |
| Falguni R Shah | Non- Executive Independent Director |
Share Holding pattern of Neelam Linens and Garments
| Name of the Shareholder | % of Holding |
| Promoters | |
| Kantilal Jethva | 8.38% |
| Bhavin Jethwa | 55.32% |
| Total – A | 63.70% |
| Promoter Group | |
| Janki Jethva | 5.24% |
| Manjula Jethva | 5.24% |
| Total – B | 10.48% |
| Public | 25.82% |
Ipo details of Neelam Linens and Garments
Neelam Linens and Garments IPO Details
| Key Information | Details |
|---|---|
| IPO Dates | 8th – 12th Nov 2024 |
| Price Band | ₹20 – ₹24 per share |
| Lot Size | 6000 shares |
| Minimum Investment | ₹144,000 |
| Issue Size | ₹13 Crore |
| Listing Exchange | NSE SME Emerge |
| Registrar | Purva Sharegistry India Pvt Ltd |
| Market Maker | Globalworth Securities |
Object of the issue
(₹ in Lakhs)
| Particulars | Amount |
| Funding capital expenditure requirement of our company towards purchase of Embroidery Machines for expansion | 557.41 |
| Prepayment or repayment of all or a portion of certain outstanding borrowings availed by our company | 400.00 |
| General corporate purposes | [●] |
Financial of Neelam Linens and Garments
Key Performance Indicators
(₹ in Lakhs except % & Ratios)
| Financial Metrics | December 31,2023 | 2023 | 2022 | 2021 |
| Revenue From operations | 5922.12 | 10,356.30 | 10,152.67 | 7,819.71 |
| Total revenue | 6,078.18 | 10,541.13 | 10,379.69 | 8,017.82 |
| EBITDA | 502.37 | 652.52 | 593.61 | 186.38 |
| EBITDA Margin (%) | 8.48% | 6.30% | 5.85% | 2.38% |
| Profit after tax | 102.99 | 237.88 | 298.58 | 41.53 |
| PAT Margin (%) | 1.74% | 2.30% | 2.94% | 0.53% |
| Return on Equity (ROE) (%) | 4.78% | 13.32% | 22.63% | 3.46% |
| Debt To Equity Ratio | 3.06 | 3.11 | 3.48 | 4.50 |
| Interest Coverage Ratio | 1.33 | 1.90 | 2.33 | 1.13 |
| Return on Capital Employed (ROCE) (%) | 8.92% | 13.64% | 16.74% | 7.89% |
| Current Ratio | 1.80 | 1.87 | 1.64 | 1.63 |
| Net Capital Turnover Ratio | 1.48 | 3.40 | 4.84 | 3.82 |
Assets & Liabilities
| Particulars | December, 2023 | March, 2023 | March, 2022 | March, 2021 |
| EQUITY AND LIABILITIES | ||||
| Shareholder’s Funds | 2,205.28 | 2102.3 | 1468.42 | 1169.84 |
| Non Current Liabilities | 3,820.87 | 3,586.25 | 2,673.37 | 2,437.26 |
| Current Liabilities | 5,322.29 | 4,279.42 | 3,718.35 | 2,860.80 |
| TOTAL EQUTIY & LIABILITIES | 11,348.44 | 9,967.97 | 7,860.13 | 6,467.92 |
| ASSETS | ||||
| Non-current assets | 1760.25 | 1978.42 | 1756.64 | 1794.42 |
| Current assets | 9,588.19 | 7,989.54 | 6,103.49 | 4,673.49 |
| TOTAL ASSETS | 11,348.44 | 9,967.97 | 7,860.13 | 6,467.92 |
Profit & Loss
| Financial Metrics | December 31,2023 | 2023 | 2022 | 2021 |
| Revenue From operations | 5922.12 | 10,356.30 | 10,152.67 | 7,819.71 |
| Total revenue | 6,078.18 | 10,541.13 | 10,379.69 | 8,017.82 |
| EBITDA | 502.37 | 652.52 | 593.61 | 186.38 |
| EBITDA Margin (%) | 8.48% | 6.30% | 5.85% | 2.38% |
| Profit after tax | 102.99 | 237.88 | 298.58 | 41.53 |
| PAT Margin (%) | 1.74% | 2.30% | 2.94% | 0.53% |
Cash Flow
(₹ in Lakhs)
| Particulars | December 31, 2023 | March 31, 2023 | March 31, 2022 | March 31, 2021 |
| Net cash used/ generated from operating activities | 179.88 | (1,112.49) | 582.15 | 1,972.50 |
| Net cash used/ generated from investing activities | 111.52 | (290.41) | (78.86) | (716.68) |
| Net cash used/ generated from financing activities | (208.90) | 1,373.64 | (452.55) | (2,291.28) |
| Net increase/ (decrease) in cash and cash equivalent | 82.49 | (29.26) | 50.74 | (1,035.45) |
Capital structure
(Amount in ₹ in Lakhs)
| Particulars | Pre-Issue |
| Borrowings | |
| Short term debt | 2,673.02 |
| Long Term Debt | 4,066.17 |
| Total debts | 6,739.19 |
| Shareholders’ funds | |
| Equity | 1,480.00 |
| Reserve and surplus – as restated | 725.28 |
| Total shareholders’ funds | 2,205.28 |
| Total debt / shareholders’ funds | 3.06 |
| Long term debt / shareholders’ funds | 1.84 |
SWOT ANALYSIS of Neelam Linens and Garments
- Strengths
- Value Addition: Neelam Linens adds value to surplus or slightly imperfect fabric through designing, digital printing, dyeing, stitching, and embroidery, enhancing its marketability.
- Diverse Product Range: The company offers a wide range of products, including bedsheets, pillow covers, duvet covers, towels, rugs, dohers, shirts, and garments, catering to various market segments.
- International Reach: Neelam Linens serves markets in the USA, Australia, and the Far East, expanding its customer base beyond India.
- Weaknesses
- High Debt Levels: The company has a high debt-equity ratio, which can impact its financial stability and growth potential.
- Inconsistent Financial Performance: Neelam Linens has shown static and inconsistent financial performance over recent periods, raising concerns about its profitability.
- Operational Risks: Managing a diverse product range and maintaining quality standards can pose operational challenges.
- Opportunities
- Expansion into New Markets: Neelam Linens can explore opportunities to expand its product offerings and enter new geographical markets.
- Technological Advancements: Investing in new technologies can improve efficiency and competitiveness in the home furnishing and apparel sectors.
- Growth in Retail Sector: The retail sector is expected to grow, providing opportunities for Neelam Linens to increase its market share.
- Threats
- Economic Downturns: Economic instability can affect consumer spending on home furnishing and apparel products, impacting sales and revenue.
- Intensifying Competition: The home furnishing and apparel sectors are highly competitive, with many players offering similar products, which can impact market share and profitability.
- Regulatory Changes: Changes in environmental and safety regulations can increase compliance costs and affect operations.
Peer Comparison with Neelam Linens and Garments
(₹ in Lakhs)
| Name of Company | Face value (₹) | Revenue from operations | Basic EPS (₹) | P/E | Return on Average Networth(%) | NAV per Equity Share(₹) |
| Neelam Linens and Garments (India) Limited | 10 | 10,356.30 | 1.65 | 14.55 | 13.32% | 14.9 |
| Peer Group | ||||||
| Loyal Textile Mills Limited | 10 | 1,40,289 | 5.91 | 111.24 | 0.78% | 748 |
| Bannari Amman Spinning Mills Limited | 5 | 1,39,857.09 | -3.49 | -8.42% | 72.07 | |
(₹ in Lakhs except % & Ratios)
| Metric | Neelam Linens and Garments (India) Limited | Bannari Amman Spinning Mills LimitedLimited | Loyal Textile Mills Limited | |||||||
| 2023 | 2022 | 2021 | 2023 | 2022 | 2021 | 2023 | 2022 | 2021 | ||
| Revenue From operations | 10,356.30 | 10,152.67 | 7,819.71 | 1,39,857.09 | 1,56,023.95 | 1,01,853.73 | 1,40,289.39 | 1,76,286.81 | 1,12,180 | |
| Total revenue | 10,541.13 | 10,379.69 | 8,017.82 | 1,40,571.06 | 1,56,628.79 | 1,02,371.88 | 1,43,821.23 | 1,77,178.42 | 1,12,485 | |
| EBITDA | 652.52 | 593.61 | 186.38 | 5,184.02 | 17,275.64 | 8,272.51 | 6,853.92 | 20,397.73 | 11,108 | |
| EBITDA Margin (%) | 6.30% | 5.85% | 2.38% | 3.71% | 11.07% | 8.12% | 4.89% | 11.57% | 9.90% | |
| Profit after tax | 237.88 | 298.58 | 41.53 | -2,264.83 | 5,620.00 | -1,038.35 | 284.42 | 9,705.09 | 3,284 | |
| PAT Margin (%) | 2.30% | 2.94% | 0.53% | -1.62% | 3.60% | -1.02% | 0.20% | 5.51% | 2.93% | |
| Return on Equity (ROE) (%) | 13.32% | 22.63% | 3.46% | -4.72% | 13.55% | -3.50% | 0.79% | 30.79% | 12.26% | |
| Debt To Equity Ratio | 3.11 | 3.48 | 4.5 | 1.33 | 1.06 | 1.73 | 1.84 | 1.7 | 1.27 | |
| Interest Coverage Ratio | 1.9 | 2.33 | 1.13 | 0.39 | 2.72 | 0.8 | 1.09 | 4.28 | 1.94 | |
| Return on Capital Employed (ROCE) (%) | 13.64% | 16.74% | 7.89% | 2.15% | 13.14% | 8.82% | 3.12% | 17.05% | 12.87% | |
| Current Ratio | 1.87 | 1.64 | 1.63 | 1.32 | 1.34 | 0.86 | 0.97 | 1.02 | 0.92 | |
| Net Capital Turnover Ratio | 3.4 | 4.84 | 3.82 | 9.43 | 10.57 | -13.64 | -50.55 | 49.11 | -22.71 | |
Risks in Neelam Linens and Garments
- Neelam Linens and Garments business predominantly focuses on bedsheets, which makes us particularly susceptible to fluctuations in demand. Any shifts in consumer preferences have the potential to significantly impact our business, as well as influence our operational outcomes and financial standing.
- Neelam Linens and Garments is dependent on a few customers for a major part of our revenues. Further Neelam Linens and Garments do not enter into long-term arrangements with our customers could adversely affect our business and results of operations.
Litigation involved in Neelam Linens and Garments
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