—By Dilip Davda
- The company is engaged in the manufacturing of RPSF, by using recycled polyester and its waste.
- It posted inconsistency in its top and bottom lines for the reported periods.
- It is operating in a highly competitive and fragmented segment.
- Based on its recent average financial data, the issue appears fully priced.
- Only well-informed/cash surplus/risk seekers may park moderate funds for long term.
ABOUT COMPANY:
Unitec Fibres Ltd. (UFL) is engaged in the manufacturing of Recycled Polyester Staple Fibre (“RPSF”), a product created from recycled polyester raw materials. The production process begins with the procurement of raw materials like PET flakes, PET chips and other polyester waste materials. These materials are then converted into raw inputs, spun into fibre and processed to meet the requirements of customers related to fibre properties like colour and density. Its products find applications in industries like the automobiles (carpet, roof liners, trunks), home furnishing (sofa, curtains, carpets) and textile sectors (spinning mills). Its manufacturing process focuses on the regeneration of polyester fibre through the utilization of PET flakes, PET chips and other PET waste derived from discarded plastic bottles and post-consumer waste streams.
By converting such recyclable materials into Recycled Polyester Staple Fibre (“RPSF”), UFL contributes to resource conservation, waste reduction and the production of environmentally sustainable products. As on the date of this Red Herring Prospectus, it has two operational manufacturing units, located at M.I.D.C., Tarapur Industrial Area, Tarapur, Palghar, Thane – 401506. Further, its Manufacturing Unit 1 and Manufacturing Unit 2 are situated on land and premises obtained on lease from Maharashtra Industrial Development Corporation (“MIDC”).
These facilities have a combined installed capacity of up to 27,984 metric tonnes per annum (“MTPA”) for the production of Recycled Polyester Staple Fibre (“RPSF”). In addition to its existing operations, the company has recently acquired land admeasuring approximately 47,494 square meters in Valsad, Gujarat, where UFL is in process of setting up an additional RPSF production line which will be designated as Unit 3. As of March 31, 2026, it had 171 employees on its payroll, and additional 116 contract labourers working in different departments.
ISSUE DETAILS/ CAPITAL HISTORY:
The company is coming out with its maiden book building route IPO of 3916800 equity shares of Rs. 10 each to mobilize Rs. 34.47cr. at the upper cap. The company has announced a price band of Rs. 83 – Rs. 88 per share. The minimum application to be made is for 3200 shares and in multiples of 1600 shares thereon, thereafter. The issue opens for subscription on September 23, 2026 and will close on September 25, 2026. The shares will be listed on BSE SME. The IPO constitute 27.16% of the post-IPO paid-up capital of the company. From the net proceeds of the issue, the company will utilize Rs. 31.00 cr. for repayment/prepayment of certain borrowings, and the rest for general corporate purposes.
The IPO is solely lead managed by Smart Horizon Capital Advisors Pvt. Ltd., while Bigshare Services Pvt. Ltd. is the registrar to the issue. SHRENI Group’s Shreni shares Ltd. is a market maker, and also a syndicate member.
After issuing/converting initial equity capital at par value, the company also issued further equity shares in the price range of Rs. 42.00 – Rs. 100 per share, between March 2010, and February 2021. The average cost of the acquisition of shares by the promoters’ data is missing from the offer document.
Post-IPO, company’s current paid-up equity capital of Rs. 10.50 cr. (10501778 equity shares) will stand enhanced to Rs. 14.42 cr. (14418578 equity shares). Based on the upper band of the IPO pricing, the company is looking for a market cap of Rs. 126.88 cr.
FINANCIAL PERFORMANCE:
On the financial performance front, for the last three fiscals, the company has posted total income/ net profit, of Rs. 204.99 cr. / Rs. 7.42 cr. (FY24), Rs. 227.13 cr. / Rs. 8.22 cr. (FY25), Rs. 224.86 cr. / Rs. 7.60 cr. (FY26). The company posted inconsistency in its top and bottom lines for the reported periods.
Its contingent liability stood at Rs. 7.40 cr. as of March 31, 2026, that raises concern.
For the last three fiscals, the company has reported an average EPS of Rs. 7.40 and an average RoNW of 13.13%. The issue is priced at a P/BV of 1.42 based on its NAV of Rs. 61.89 per share as of March 31, 2026, but its post-IPO NAV data is missing from its offer documents.
If we attribute FY26 earnings to its post-IPO fully diluted paid-up equity capital, then the asking price is at a P/E of 16.70, and based on FY25 earnings, the P/E stands at 15.44. The issue appears fully priced based on its recent average earnings.
The company has posted PAT Margins of 3.63% (FY24), 3.63% (FY25), 3.39% (FY26) and RoCE margins of 20.20%, 15.04%, 9.05%, respectively for referred periods.
DIVIDEND POLICY:
The company has not paid any dividends for the reported periods of the offer document. It will adopt a prudent dividend policy, based on its financial performance and future prospects.
COMPARISON WITH LISTED PEERS:
As per the offer document, the company has shown Ganesha Ecosphere, Divyadhan Recycling, as its listed peers. They are currently trading at a P/E of 47.6, and 35.4 (as of September 22 2026). However, they are not truly comparable on an apple-to-apple basis. This comparison is nothing but an eyewash.
MERCHANT BANKER’S TRACL RECORD:
This is the 30th mandate from Smart Horizon Capital Advisors, in the last three fiscals (including the ongoing one). Out of the last 10 listings, 2 opened at discount, 2 at par, and the rest listed with a premium ranging from 0.03% to 12.99% on the listing date. The merchant banker has an average track record.
CONCLUSION:
UFL is engaged in the manufacturing of RPSF, by using recycled polyester and its waste. It posted inconsistency in its top and bottom lines for the reported periods. It is operating in a highly competitive and fragmented segment. Based on its recent average financial data, the issue appears fully priced. Only well-informed/cash surplus/risk seekers may park moderate funds for long term.
Review By Dilip Davda on August, 2026
Review Author
DISCLAIMER: No financial information whatsoever published anywhere here should be construed as an offer to buy or sell securities, or as advice to do so in any way whatsoever. All matter published here is purely for educational and information purposes only and under no circumstances should be used for making investment decisions. My reviews do not cover GMP market and operators game plans. Readers must consult a qualified financial advisor before making any actual investment decisions, based the on information published here. With entry barriers, SEBI wants only well-informed investors to participate in such offers. With crazy listings in the recent past, SME IPOs drew the attention of investors across the board and lead to seer madness. However, as SME issues have entry barriers and continued low preference from the broking community, any reader taking decisions based on any information published here does so entirely at their own risk. The above information is based on information available as of date coupled with market perceptions. The Author has no plans to invest in this offer.
About Dilip Davda
Dilip Davda is veteran journalist associated with stock market since 1978. He is contributing to print and electronic media on stock markets/insurance/finance since 1985.
Dilip Davda is a leading reviewer of public issues and NCDs in the primary stock market in India. The knowledge he gained over 3 decades while working in the stock market and a strong relationship with popular lead managers makes his reviews unique. His detailed fundamental and financial analysis of companies coming up with IPOs helps investors in the primary stock market. Dilip Davda has a special interest in analyzing the SME companies and writing reviews about their public issues. His reviews are regularly published online and in news papers.
(Dilip Davda -SEBI registered Research Analyst-Mumbai,
Registration no. INH000003127 (Perpetual)
Email id: dilip_davda@rediffmail.com ).
