Introduction
The Indian IPO market is abuzz with excitement as companies line up to raise capital from the public through initial public offerings. Among them, IKIO Lighting Ltd is gearing up for its much-anticipated IPO, creating a buzz in the investment community. Want to know if it's worth considering? Read on to find out more about the IKIO Lighting Ltd IPO.
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About IKIO Lighting Ltd
IKIO Lighting Ltd is one of India's leading light-emitting diode manufacturers. They provide lighting solutions to a range of industries. With a rich history of over 2 decades, the entity has established itself as one of the leading original design manufacturers (ODM) and solution providers of switches, LED lights, and RV components.
The company's strong R&D facilities have earned it various certifications, and along with lighting solutions, the firm is also into manufacturing ABS piping. The company enjoys a diverse customer base across geographies and has a state-of-the-art manufacturing infrastructure. Here are the company's strengths and weaknesses.
Strengths
- Positioned to seize the burgeoning opportunities in the LED market
- Wide range of products offered, with a particular emphasis on lucrative sectors
- Establishing enduring partnerships with prominent industry clients
- Focus on research and development (R&D)
- Robust infrastructure incorporating seamless backward integration
- Solid and reliable financial performance
- Skilled Promoters and Management Team with extensive experience
Weaknesses
- Relying on a small customer base
- Relying on and generating a significant portion of their revenue from LED lighting products
- Dependent on several third-party suppliers for an essential component
- Customers do not provide firm and enduring commitments for purchasing large volumes
- The industry exhibits a high level of competitiveness and is subject to cyclical patterns
Financial Snapshot
IKIO Lighting Ltd has a remarkable track record of demonstrating robust and consistent financial performance over the years. This company has consistently surpassed expectations, delivering impressive financial results that have gained industry experts' and stakeholders' attention and admiration.
IKIO Lighting's financial performance is underpinned by a strategic and well-executed business model encompassing various factors contributing to its success. The company's ability to effectively manage costs, optimize operational efficiency, and capitalize on market opportunities has been instrumental in achieving sustained financial growth. Here are the company's financials as per the red drafting herring prospectus.
| Particulars |
For the Period Ending December 31, 2023 |
As of and For FY Ending March 31 |
| 2022 |
2020 |
2021 |
| Share Capital |
65 |
25 |
0 |
0 |
| Networth |
127 |
76 |
48 |
28 |
| Total Borrowings |
136 |
16 |
5 |
8 |
| Revenue from Operations |
243 |
221 |
160 |
141 |
| Profit After Tax |
35 |
28 |
21 |
16 |
| Earnings per Share (diluted) |
5 |
4.3 |
3.2 |
2.5 |
| Net asset value (In Rs/share) |
19 |
12 |
7 |
4 |
| Return on Net worth (%) |
27% |
58% |
43% |
37% |
*Amount in Cr except per share
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IPO Details
The issue size of IKIO Lighting Ltd's IPO is Rs. 606.5 crores. This combines an offer for sale and a fresh issue. Offer for sale comprises 90,00,000 equity shares, each with a face value of Rs. 10. Fresh issues of shares are up to Rs. 350 crores. While qualified institutional buyers will get 50% of the offer, 15% is for non-institutional investors. 35% is for retail investors. With the money raised, the company aims to:
- Set up a new facility in Noida, UP
- Make repayment/prepayment, either in full or part, for its specific borrowings. Stay updated on the latest Upcoming IPO 2023!
Important Things to Keep in Mind Before Subscribing
Despite the overcrowded nature of the LED lighting solutions segment, IKIO Lighting Ltd has managed to secure the lion's share of the market. This success can be attributed to their exceptional products, some of which enjoy virtual monopolies in the industry. Furthermore, the company's largest customer, Philips, contributes significantly to its overall revenue.
The company's IPO comes at a time when the lighting market in India is experiencing remarkable growth, driven by factors such as urbanization, infrastructure development, and the government's focus on energy conservation.
Looking ahead, the company has ambitious expansion plans in place. With the management's unwavering confidence in their strategies, the company aims to sustain its current market trends and continue its growth trajectory. This expansion can further solidify its position as a dominant player in the LED lighting solutions market.
For well-informed investors seeking opportunities, it presents an attractive option. Investors can potentially reap substantial rewards by investing in the firm over the medium to long term. Given the firm's strong market presence, favorable customer relationships, and ongoing expansion plans, it is well-positioned to deliver profitable returns to its shareholders. If you want to apply and subscribe to the company's shares in its IPO, open a Demat account with Motilal Oswal today.
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