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Electronics Mart India Limited is coming up with its Initial Public Offering. The IPO will open for subscription on October 4th, 2022, and close on October 7th, 2022. It is looking to raise Rs. 500 Crores which will be a fresh issue. In this article, we will look at the Electronics Mart India IPO Review 2022 and analyze its strengths and weaknesses. Keep reading to find out!
Electronics Mart India IPO Review – About The Company
Electronics Mart India Ltd (EMIL) started its operations in the year 1980. Today it stands as one of the fastest growing consumer durable & electronics retailers in India.
It is a multi-brand consumer durable and electronics retailer dealing in home entertainment, mobiles, laptop, home appliances, cameras, kitchen appliances, and personal care.
The company has a focus on large appliances such as air conditioners, televisions, washing machines, and refrigerators, along with mobiles and small appliances, and IT, among others. Their offering includes more than 6,000 SKUs (stock keeping units) across product categories from more than 70 consumer durable and electronic brands.
As of August 2021, the company has a total of 99 stores out of which 8 are owned, 85 stores are under the long-term lease rental model and the rest 6 are partly owned and partly leased.
The company operated majorly in three ways:
Retail: The company runs 85 Multi Brand Outlets (MBOs) under the name “Bajaj Electronics”, 1 MBO under the name “Tirupati Electronics” and 2 specialized stores under the name “Kitchen Stories” to meet the demands of its customers.
Wholesale: The company is also engaged in the wholesale business of consumer durables, where we supply products to single-shop retailers in Andhra Pradesh and Telangana regions.
E-Commerce: Their current e-commerce website functions as a catalogue for the products they sell at their stores.
Electronics Mart India IPO Review – Financial Highlights
(Source: DRHP of the company)
Electronics Mart India IPO Review – Competitors
- Reliance Industries (Reliance Retail)
- Tata Group (Croma)
- Vijay Sales
- Aditya Vision
- Sargam
- Girias
- Adishwar
Electronics Mart India IPO Review – Industry Overview
India’s retail industry clocked a healthy 9.5% compound annual growth rate between fiscals 2016 and 2020, backed by rising urbanization, nuclearisation, increased disposable incomes, and improving affordability and consumer sentiment.
CRISIL Research has estimated that the size of India’s consumer durables industry, including large consumer durables mobile phones, and smaller appliances, was at Rs 2.4 trillion as of fiscal 2021.
The organized segment’s share in the consumer durables market is expected to rise from 58% in fiscal 2021 to 76- 78% by fiscal 2026. Meanwhile, the unorganized players also saw a rise in their share in Q1FY22.
Strengths of the Company
- The company is the largest in the South and the 4th largest overall in the consumer durable and electronics retail segment in terms of revenue.
- The company is increasing its market presence and geographic reach with cluster-based expansion.
- The company has a diversified product portfolio that caters to the needs of its customers from all areas.
- The company has ensured robust customer service support, timely delivery of its products & quick installation support.
- It has an experienced management team with a proven track record.
Weaknesses of the Company
- The company is dependent on external suppliers for its product requirements. Any delay in procurement can disrupt operations.
- A large portion of their total revenue is dependent on a smaller segment of their total products.
- There are certain legal proceedings involving the company and its promoters.
- The company operated in a highly competitive industry. Any new or existing player can prove to be a threat to the company.
- The company is exposed to certain risks such as cyber security threats, seasonal and cyclical volatility, and changes in taxation laws.
Electronics Mart India IPO Review- Key IPO Information
| Particulars | Details |
|---|---|
| IPO Size | ₹500 Crores |
| Fresh Issue | ₹500 Crores |
| Offer for Sale (OFS) | – |
| Opening date | October 4, 2022 |
| Closing date | October 7, 2022 |
| Face Value | ₹10 per share |
| Price Band | ₹56 to ₹59 per share |
| Lot Size | 254 Shares |
| Minimum Lot Size | 1 (254 shares) |
| Maximum Lot Size | 13 (3302 shares) |
| Listing Date | October 17, 2022 |
Promoters: Pavan Kumar Bajaj and Karan Bajaj
Book Running Lead Managers: Anand Rathi Advisors Limited, JM Financial Limited, and IIFL Securities Limited
Registrar To The Offer: KFin Technologies Private Limited
The Objective of the Issue
The Net Proceeds from the Fresh Issue are proposed to be utilized for:
- 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 the Company.
- General Corporate Purposes
In Closing
In this article, we looked at the details of Electronics Mart India IPO Review 2022. Analysts remain divided on the IPO and its potential gains. This is a good opportunity for the investors to look into the company and analyze its strengths and weaknesses. That’s it for this post.
Are you applying for the IPO? Let us know in the comments below.
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