Electronics Mart India Limited IPO | Motilal Oswal

Electronics Mart India Limited IPO

Opening Date

04, October 2022

Closing Date

06, October 2022

Refund Initiation

13, October 2022

Listing Date

17, October 2022

Face Value

₹10 per equity share

IPO Price Band

₹56 to ₹59 per equity share

Minimum Order Quantity

254 Shares

Issue Size

₹500 Cr

 

The month of September 2022, saw a couple of IPOs getting listed in the secondary market. These were Tamilnad Mercantile Bank Ltd and Harsha Engineers International Ltd. Whereas Harsha Engineers International Ltd proved to be a once in a lifetime opportunity, generating 48% listing gains, Tamilnad Mercantile Bank however performed below expectations, to list at no profit no loss price. However, the retail subscription for these IPOs saw an overwhelming response, describing that retail investors are eager to to invest. After Harsha Engineers International Ltd, which received a whopping 18.52 times subscription from retail investors, all eyes are now aimed at Electronics Mart India Ltd, which is going live with its IPO on 04th October. Let’s learn in detail all its financials and if this IPO is worth investing in or not!

About the Company -

Electronics Mart India Ltd, is India’s 4th largest consumer durables and electronics retailer. The company came into operation in 1980, and offers a diversified range of products, out of which a major chunk is occupied by large appliances such as air conditioners, television sets, washing machines, etc. The company also offers more than 6000 SKU (stock keeping units) across its product categories to more than 70 consumer durables and electronics brands across India.

The two models of business through which Electronics Mart India conducts its business are:-

1. Ownership Model:- In this model, the company owns the pertaining land/property.

2. Lease Rental Model:- In this model, the company enters into a long-term leasing agreement with property-owner/s. As of August 2021, the company holds 85 stores under its leasing model, whereas 6 are partially owned or leased.

The operations of Electronics Mart India are classified basis three categories:-

  1. Retail:- Customer front-facing model of business. The revenue generated from the retail channel of business for FY 20-21 is Rs 29,312.84 million.
  2. Wholesale:- The company is also engaged in the wholesale business of consumer durables, where the company supplies products to single-shop retailers in Andhra Pradesh and Telangana regions. Revenue generated from wholesale business for FY 20-21 stood at Rs 530.53 million.
  3. E-commerce:- E-commerce serves as the virtual face to serve the customers located at geographically distant locations. The revenue generated from this channel of business for FY 20-21 stood at Rs 445 million.
Particulars 3 Months period ended As of and for the Financial Year ended March 31
June 30, 2022 2022 2021 2020
 Equity share capital 300 300 300 300
 Networth 638 597 492 433
 Total Borrowings 476 594 548 521
 Revenue from Operations 1408 4349 3202 3172
 EBITDA 97 292 204 228
 Profit / (Loss)  after Tax 41 104 59 82
Earnings per Share 1.4 3.5 2 2.7
(₹ / share)(diluted)
RoCE 7% 19% 14% 20%
RoE 6% 17% 12% 19%
Net asset value per Equity Share (In ₹ per share) 21 20 16 14
all numbers stated are in crores.        

 

Electronics Mart India Ltd details -

Let’s now move onto the main part of this article. Here, we’re going to be looking at some of the most important details of this upcoming IPO viz - Electronics Mart India Ltd date and its share price.

 

Electronics Mart India Ltd date -

According to the Red Herring Prospectus filed by the company, the public issue of the equity shares is going live from October 04 and will be available for subscription until October 06, 2022.

 

Electronics Mart India Ltd issue size -

The total issue size of the latest Electronics Mart India Ltd is declared to be ₹500 crores. This is a totally fresh issue.

50% of the offer is for QIBs (qualified institutional buyers), 35% for retail investors, and the balance 15% for NIBs (non-institutional investors).

 

Electronics Mart India Ltd share price

The price band of the company’s upcoming IPO is declared to range between ₹56 to ₹59 per equity share

 

Electronics Mart India Ltd listing

Since the IPO of Electronics Mart India Ltd is from the mainboard, it would be listed on both - the National Stock Exchange (NSE) as well as the Bombay Stock Exchange (BSE)

 

Electronics Mart India Ltd objectives

The net proceeds of the Issue, i.e. gross proceeds of the Issue (“Net Proceeds”) are proposed to be utilized in the following manner:

  • Funding of capital expenditure for expansion and opening of stores and warehouses;
  • Funding incremental working capital requirements;
  • Repayment/prepayment, in full or part, of all or certain borrowings availed by our Company; and
  • General Corporate Purposes.

 

Electronics Mart India Ltd Strengths

  • Consistent track record of revenue growth & profitability. Revenue CAGR of 17.9% (2016-21)
  • Long standing relationships (15 yrs+) with leading consumer brands
  • Diversified product offering & optimal product assortment enables better visibility, brand recognition & deeper market penetration
  • Strategically located warehouses, the company operates nine large warehouses with an average area of 28,114 sq.ft.

 

Electronics Mart India Ltd risks

  • Stores are majorly concentrated in AP & Telangana
  • 61% of FY22 Revenue is contributed by the top 5 brands
  • Dependent on external suppliers. The top 10 suppliers contributed 80% of the Total purchase
  • Highly competitive industry

Conclusion

If you wish to become a part of this exciting IPO opportunity, you will need to have an online demat and trading account, which will help you get shares of your favorite companies. To get an online DEMAT account for Free*, all you have to do is sign-up with Motilal Oswal and get started. If you are an existing customer with Motilal Oswal, you can now invest in the IPOs in just one click through UPI payment! It’s all easy. It’s all good.

 

Related articles: 5 Tips for Investing In IPOs | What's the big deal about IPOs | Clearing the confusion from IPOs | IPO in India- The future looks bright | Upcoming IPO

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