Alphalogic Industries Limited

Alphalogic Industries Limited has filed DRHP with market regulator SEBI on May 26, 2023 to raise funds through IPO. The IPO of the Company includes freeh issue only. There is no OFS in the IPO of the Company. 

Business Model of the Company

Alphalogic Industries Limited was incorporated in the year 2020. The Company is engaged in Design, Manufacturing, Supply and Installation of Industrial and Institutional Storage Systems i.e. Compactor Storage System, Heavy Duty Storage Racks, Cantilever Racks, Lockers, Mezzanine Floors, Metal Pallets & Crates, Library Stacks, Book Case, Book Trolly, Periodical Display Rack, School Lockers, Book Support etc.

The Company’s state-of-the-art manufacturing facility located at Survey No. 164/1, Plot No. 6, Alkapuram Road, Opp Yashobhumi Society, Wadmukhwadi, Pimpri Chinchwad, Pune – 412105, Maharashtra delivers an array of customized storage systems that are safe, easy to use, save space, and attractive.

The Company’s commitment to innovation, excellence, quality, and customer service has ensured consistent growth for it and its clients. Its compact products with simple designs facilitate transport and assembling at the site. They are easy to operate and maintain, and beautifully become a part of clients’ workspace, enhancing its ambiance. 

The Company has designed and delivered storage solutions for the automobile industry, e-commerce companies, food industry, logistics companies, engineering companies, pharmaceutical organizations, educational institutes, IT companies, etc. In Fiscal Year 2023, the company has served over 150 clients in different industries.

Object of the Issue

The Company proposes to utilize the Net Proceeds towards funding of the following objects:

1. To meet Working Capital Requirements
2. To meet the Issue Expenses
3. General Corporate Purposes

In addition, the  Company expects that the listing will enhance the Company’s corporate image, visibility of the brand name and create a public market for its Equity Shares in India. It will also make future financing easier and affordable in case of expansion or diversification of the business. Further, listing attracts interest of institutional investors as well as foreign institutional investors.

Risks in the IPO

The Company’s business is dependent on a few customers

Revenues from any of the particular customers may vary significantly from reporting period to reporting period depending on the nature of ongoing orders and the implementation schedule for such orders. The company is supplying its products majorly to customers from Maharashtra, Karnataka and Telangana. The Company’s business is dependent on a few customers and the loss of, or a significant reduction in orders by such customers could adversely affect the business of the Company.

The Company relies significantly on some suppliers for the supply of its raw materials

The Company relies significantly on some suppliers for the supply of the raw materials. If these suppliers are unable or unwilling to supply raw materials on time or otherwise fail to meet the requirements of the Company, the business will be harmed. An inability to procure the desired quality, quantity of the raw materials and components in a timely manner and at reasonable costs, or at all, may have a material adverse effect on the business, results of operations and financial condition

Highly competitive industry

The Company operates in the highly competitive industry. There are no entry barriers in this industry which puts the Company to the threat of competition from new entrants. There are numerous players operating in the industry. The Company faces tough competition in its business from a large number of unorganized and a few organized players. An inability to compete effectively may lead to a lower market share or reduced operating margins and may have an adverse effect on the business, results of operations and financial condition

The Directors are parties to certain legal proceedings

The Directors are parties to certain legal proceedings. These legal proceedings are pending at different levels of adjudication before various courts and forums. Any adverse decision in such proceedings may have a material adverse effect on the business of the Company, results of operations and financial condition.

The business is subject to seasonal and other fluctuations

The business and operations may be affected by seasonal factors which may restrict the ability to carry on activities related to its projects and fully utilize its resources. Heavy or sustained rainfalls or other extreme weather conditions such as cyclones could result in delays or disruptions to its operations during the critical periods of the projects and cause severe damages to its premises and equipment that may affect the cash flows and business operations of the Company. 

Financial Performance

As per the financial statements, the Company clocked total revenue of Rs. 18 crore in FY23, an increase of 132% to Rs. as against Rs. 7.8 crore in FY22. The total expenses of the Company in FY23 have also increased 108% to Rs. 14.8 crore as against Rs. 7.1 crore in FY22. The profit before tax of the Company increased 607% to Rs. 2.93 in FY23 as against Rs. 41 lakhs in FY22. During FY23, the net profit of the Company also increased 600% to Rs. 2.1 crore as against Rs. 30 lakhs in FY22. 

During FY23, the total assets of the Company was Rs. 9 crore as against Rs. 3 crore in FY22. During this period, the total equity and liabilities of the Company was Rs. 9 crore as against Rs. 3 crore in FY22. 

In FY23, the net cash used in operating activities of the Company was Rs. (10) crore as against Rs. 2.9 crore cash generated in FY22. During this period, the net cash used in investing activities of the Company was Rs. (18) crore as against Rs. (14) crore in FY22. The net cash generated from financial activities of the Company was Rs. 2.9 crore as against Rs. 1.1 crore in FY22. In FY23, the net cash and cash equivalents at the end of the year of the Company was Rs. 0 as against Rs. 0.57 lakhs in FY22.