Bizotic Commercial Limited IPO

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i. Bizotic Commercial engaged into the business of manufacturing, designing and marketing of readymade garments offering diverse range of men’s Formal Wear, Casual Wear, Party Wear, Fit Wear, Sports Wear, Comfort Wear, Ethnic Wear, Winter Wear. They serve their customers through the channels of retail stores and e-commerce.

ii. Their garment manufacturing process includes cutting, stitching, sewing, finishing, inspection and packing. They outsource the entire garments manufacturing on job work basis from third party contractors from time to time and provides the technical specifications such as designs, pattern, quality, fabric etc. to them who, based on their specifications, procure the requisite raw materials at their own costs and begin the manufacturing process.

iii. The company opened their first outlet in the Financial Year 2017-2018, on their own brand name “URBAN UNITED” in Ajmer, Rajasthan. From 2017 to 2020, they have opened approx 40 outlets on franchisee basis in Rajasthan and Haryana Only.

iv. All their showrooms are located at prime locations in different cities of Rajasthan and Bihar. Currently, they have 20 stores in different cities of Rajasthan and 1 in Bihar on ongoing business out of which, 17 stores are on franchisee basis and 4 stores are owned by Company, itself.

v. The company owned 4 Stores are located at Jaipur, Jodhpur, Bhilwada and Chittorgarh in Rajasthan.

vi. Company’s all products are sold under their brand name “URBAN UNITED” through its exclusive stores/outlet either own or on franchisee.

vii. In Franchisee Model, they enter into agreement with the franchisee with varied date of commencement to sell their products at showroom as per the terms and conditions like showrooms must be on its brand name only and all the product in the showroom must be their brand product only. The company receive one-time interest free refundable security deposit from franchisee which is refundable on the termination of the agreement. All the staff must wear uniform of their Brand in all its showrooms. The design and space of the showroom is also decided by the Company person only. Theri Franchisee Stores are working from morning 10:30 to evening 09:30 and our own stores are working from morning 10:30 to late evening 10:30 to 11:00

viii. At present, the Company is primarily involved in designing, branding and retailing men’s apparels under the brand ‘URBAN UNITED’. Their product line consists of:

• Casual Wear • Formal Wear • Club Wear • Comfort Wear • Winter Wear • Ethnic Wear • Party Wear • Fit Wear • Sports Wear • Accessories

ix. Company’s owned Showrooms:

• Jaipur • Jodhpur • Chittorgarh • Bhilwada Our Franchisee Showrooms: • Bikaner • Kota • Udaipur • Hajipur, Bihar • Chomu • Sanganer • Navalgarh • Vidyadyadhar nagar • Shrimadhopur • Sikkar • Sumerpur Pali

Competitive Strength

i. Designing Capabilities
ii. Experienced management Team
iii. Established Marketing Setup and Diversified Customer Base
iv. Distribution Network

Objects of the Bizotic Commercial Limited IPO:

The company intends to utilize the proceeds from the net issue for the following objects: i. Setting up Retail store ii. Repayment of loan iii. Working capital requirement iv. General Corporate Purpose, and v. Meeting Public Issue Expenses.

Bizotic Commercial Limited IPO Details:

Open Date: Jun 12 2023
Close Date: Jun 15 2023
Total Shares: 2,412,000
Face Value: ₹ 10 Per Equity Share
Issue Type: Fixed Price Issue IPO
Issue Size: 42.21 Cr.
Lot Size: 800 Shares
Issue Price: ₹ 175 Per Equity Share
Listing At: BSE SME
Listing Date: Jun 23 2023

Promoters And Management:

i. Sanjay Gupta, aged 49 years, is the one of the Promoter and Managing Director of the Company. He holds a Bachelor of Science (Chemistry), Bharatiya Vidya Bhavan's Sheth R. A. College Ahmedabad. He has more than 25 years of experience in the field of Textile and Garments. He is one of the pioneers of the Company. With his expertise in the understanding of fabrics & designs, the Company can sustain in the high volatile market. He is looking for the marketing and overall business of the Company. ii. Inderpreet Kaur Gulati, aged 43 years, is an Executive Director & CFO of the Company. She holds the degree of Bachelor of Science from Delhi University. She has more than 10 years of experience in the field of Textile and Fabric. She is responsible for Business Development and operation of the Company. Because of her communication skills, she is looking for the Business Expansion Deals of the Company along with the handling the operations of the Showrooms. iii. Mohit Agarwal, aged 49 years, is Non-Executive Director of the Company. He has completed Bachelor of Commerce from Gujarat University in 1995. He has more than 25 years of experience in the field of finance and risk management. He is associated with our company as a director since August 24, 2022. He is looking for the smooth operational transactions and financials of the Company.

Financials of Bizotic Commercial Limited IPO:

A. Balance Sheet
Particular (In Lakhs) Mar-20 Mar-21 Mar-22 9MFY23
Equity Share Capital 1.00 1.00 1.00 562.80
Reserves 29 63 122 303
Borrowings 76 84 256 369
Trade Payables 782 1,317 2,933 2,073
Other Liabilities 214 432 426 665
Total Liabilities 1,073 1,834 3,615 3,107
Net Block 37 30 57 87
Other Assets 41 36 68 106
Total NC Assets 79 66 125 193
Receivables 456 951 2,120 1,345
Inventory 422 740 1,284 2,163
Cash & Bank 11 2 10 67
Other Assets 173 168 256 292
Face value 10 10 10 10
B. Profit & Loss Statement
Particular (In Lakhs) Mar-20 Mar-21 Mar-22 Mar-23
Sales 1,114 1,680 5,341 4,998
Purchases of Stock In Trade 1,134 1,709 5,331 5,131
Change in Inventory -261 -319 -543 -1,173
Employee Cost 28 27 91 120
Other Expenses 182 194 372 324
Other Income 0 0 1 2
Depreciation 6 13 10 26
Interest 3 8 1 32
Profit before tax 23 48 81 540
Tax 6 14 21 152
Net profit 16 34 60 387
C. Cash Flow Statement
Particular (In Lakhs) Mar-20 Mar-21 Mar-22 9MFY23
Cash From Operating Activity
Profit From Operation 31 69 92 448
Receivable -169 -496 -1169 775
Inventory -261 -319 -543 -880
Payable 288 536 1616 -860
Loans And Advances -171 3 -89 -35
Other WC Items 2 20 -17 262
Working Capital Changes -310 -255 -202 -738
Direct Taxes 6 14 22 117
Net Cash Inflow from Operating Activity -285 -200 -132 -407
Cash from Investing Activity
Fixed assets purchased -41 -5 -37 -49
Other investing items 200 197 7 -27
Net cash inflow from investing activities 160 192 -30 -77
Cash from Financing Activity
Proceeds from shares 0 0 0 452
Proceeds from borrowings 76 8 172 0
Repayment of borrowings 3 0 0 202
Intrest paid fin -3 -8 -1 -24
Net Cash Flow -55 -9 8 57
 

Comparison With Peers:

Name of the Company Revenue (In Crore) PAT (In Crore) EPS ( in Rs) P/E CMP Mcap (In Crore)
Bizotic Commercial Limited 50 3.9 4.81 36.35 175 140.7
Trent Limited 8242 394 12.51 191.0 1593 56652
Bella Casa Fashion and Retail Limited 202 8 6.76 19.2 130 149
Lorenzini Apparels Limited 43.76 2.52 2.49 89.4 219 225
* All the data is as per FY23.

Recommendation on Bizotic Commercial Limited IPO:

Review and Recommendation of Bizotic Commercial Limited IPO by IZ team is 4/10 1. Bizotic Commercial engaged into the business of manufacturing, designing and marketing of readymade garments offering diverse range of men’s Formal Wear, Casual Wear, Party Wear, Fit Wear, Sports Wear, Comfort Wear, Ethnic Wear, Winter Wear. They serve their customers through the channels of retail stores and e-commerce. 2. The company opened their first outlet in the Financial Year 2017-2018, on their own brand name “URBAN UNITED” in Ajmer, Rajasthan. They opened 40 stores from 2017-18 onwards to till date but due to covid-19, 28 stores were closed. 3. The company operates through 4 showrooms and 17 franchisees. However, there are no written contracts with all franchisees. A letter of intent was issued to 6 franchisees, but it remains unsigned. If these franchisees choose to discontinue, the company cannot legally enforce any rights, impacting business, revenue, and profitability. 4. The company operates in a hyper-competitive environment characterised by razor-thin profit margins. 5. The business requires very high working capital requirement. 6. The company has experienced significant revenue growth, rising from 11 Cr in FY20 to 53 Cr in FY22. However, there has been a decline in revenue for FY23 when the 9MFY23 numbers are annualized. To counter this decline and drive growth, the company aims to expand its number of franchises, which will be facilitated by the funds raised from the IPO. 7. The asking price-to-earnings (P/E) ratio appears to be high considering the stagnant growth, the need for a significant working capital, and the operation within a highly competitive environment.

Lead Manager of Bizotic Commercial Limited IPO:

  1. Interactive Financial Services

Registrar of Bizotic Commercial Limited IPO:

  1. Bigshare Services Private Limited

Company Address:

Bizotic Commercial Limited 8, Samet Business Park, Nr. Khokra Circle, Khokra, Ahmedabad-380008 Phone: +91 79849 71501 Email: bizoticcommercialindia@gmail.com Website: https://urbanunited.in/

Discussion on Bizotic Commercial Limited IPO:

2 Comments

    Business operates in the highly competitive environment. So, you can skip this IPO.

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