Crayons Advertising Limited IPO
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(i) Incorporated in 1986, Crayons Advertising Limited is an Integrated marketing and communications agency. They offer 360-degree solutions to a wide array of clients.
(ii) Established with the object and vision to provide advertising solutions, Crayons Advertising has expanded its business horizons continuously during its operations in the industry for over 36 years.
(iii) Crayons is one of the few agencies that can truly claim to be fully integrated and independent in providing marketing and communications solutions. It has provided a wide area of scope of work being offered and provided to its clients.
(iv) They offer world-class creative, exceptional brand marketing strategy, pragmatic online & offline media planning & buying, cutting-edge digital expertise, on-ground & virtual activation capabilities, and design solutions that help clients in brand building.
(v) Crayons Advertising Limited offers a high-end ecosystem and end-to-end ad-tech communication solutions platform. These are for advertising media services consisting of Brand Strategy, Events, Print Media, Digital Media, and Outdoor (OOH) Media services.
(vi) These services are offered under various advertisement modes such as Newspapers, Brochures, Magazines, Television Channels, FM channels, and display of Outdoor Hoardings, etc.
Objects of the Crayons Advertising Limited IPO:
The Company intends to utilize the Net Fresh Issue Proceeds for the following Objects:
1. Funding of working capital requirements of the Company;
2. Capital expenditure on infrastructure and cutting-edge technology for expansion;
3. General Corporate Expenses.
Crayons Advertising Limited IPO Details:
| Open Date: | May 22 2023 |
| Close Date: | May 25 2023 |
| Total Shares: | 64,30,000 |
| Face Value: | ₹ 10 Per Equity Share |
| Issue Type: | Book Built Issue IPO |
| Issue Size: | 41.80 Cr. |
| Lot Size: | 2000 Shares |
| Issue Price: | ₹ 62-65 Per Equity Share |
| Listing At: | NSE Emerge |
| Listing Date: | Jun 02 2023 |
Promoters And Management:
Mr. Kunal Lalani, aged 62 years, is the Promoter and Chairman & Managing Director of our Company. He was originally appointed on the Board on August 01, 1986 as the Managing Director of the Company. He has an experience of around 36 years in our Industry. The company was started off in 1986 by Mr. Lalani with a vision to provide 360 Degree communication solutions & to build long lasting relationships with brands. He is the key driver of the growth of the Company from the inception. He is responsible for the managing and supervising operations, expansion of business, sourcing new projects and overall management of the business of our Company.
Mr. Hulasmal Lalani, aged 78 years, is a Director of our Company. He’s the Promoter and Managing Director of Plasopan Engineers India Pvt Ltd. – one of the India’s Oldest Plastic Extrusion manufacturing company. He set up Plasopan Engineers India Pvt Ltd. In 1979 which is into extruding Plastic profiles for various industries including Building & construction, Electricals, Automobile, Textile & various other industries.
Mrs. Vimi Lalani, aged 56 years, is the Non-Executive Director of our Company. She holds a diploma in Commercial Arts and has further done an Advance Multimedia Course from APTECH. She has over 28 years of experience in industry. She started her journey into advertising as a Visualiser in her tenure at M/s Visualiser Trikaya Grey (Now Grey Worldwide Ltd.) Not only did she work on campaigns for leading brands, but also learnt photography and print production during her time at Grey. She joined Crayons in 1994 as Director to spearhead the Creative Department with a clear mandate to add value to the Creative Department. She continues to play an instrumental role in providing creative direction and quality check on all the creative works of the agency.
Financials of Crayons Advertising Limited IPO:
(A) Balance Sheet
(B) P&L Statement
(C) Cash Flow Statement
| Particulars (lakh) | 2020 | 2021 | 2022 |
| Equity Share Capital | ₹225.00 | ₹225.00 | ₹225.00 |
| Reserves | ₹3,325.00 | ₹3,338.00 | ₹3,499.00 |
| Borrowings | ₹1,528.00 | ₹1,533.00 | ₹961.00 |
| Trade Payables | ₹6,117.00 | ₹4,417.00 | ₹5,822.00 |
| Other Liability | ₹2,023.00 | ₹1,152.00 | ₹2,218.00 |
| Total Liability | ₹13,218.00 | ₹10,665.00 | ₹12,725.00 |
| Fixed Assets Block | ₹757.00 | ₹654.00 | ₹583.00 |
| CWIP | ₹1,880.00 | ₹1,851.00 | ₹1,136.00 |
| Investments | ₹0.00 | ₹0.00 | ₹0.00 |
| Other Assets | ₹1,589.00 | ₹988.00 | ₹1,292.00 |
| Total Non-Current Assets | ₹4,226.00 | ₹3,493.00 | ₹3,011.00 |
| Receivables | ₹7,555.00 | ₹6,011.00 | ₹5,902.00 |
| Inventory | ₹0.00 | ₹0.00 | ₹0.00 |
| Cash and Cash Balance | ₹587.00 | ₹307.00 | ₹1,785.00 |
| Other Assets | ₹850.00 | ₹855.00 | ₹2,027.00 |
| Total Current Assets | ₹8,992.00 | ₹7,173.00 | ₹9,714.00 |
| Total Assets | ₹13,218.00 | ₹10,665.00 | ₹12,725.00 |
| Particulars (lakh) | 2020 | 2021 | 2022 |
| Sales | ₹16,100.00 | ₹10,497.00 | ₹19,253.00 |
| Sales Growth | 0.00% | -34.80% | 83.41% |
| COGS | ₹13,765.00 | ₹8,795.00 | ₹16,993.00 |
| COGS % of Sales | 85.50% | 83.79% | 88.26% |
| Gross Profit | ₹2,335.00 | ₹1,702.00 | ₹2,260.00 |
| Gross Margins | 14.50% | 16.21% | 11.74% |
| Employee Benefit & Other Expenses | ₹2,044.00 | ₹1,598.00 | ₹1,976.00 |
| S&G Sales % | 12.70% | 15.22% | 10.26% |
| EBITDA | ₹291.00 | ₹104.00 | ₹284.00 |
| EBITDA Margins | 1.81% | 0.99% | 1.48% |
| Interest Cost | ₹236.00 | ₹125.00 | ₹108.00 |
| Interest %of Sales | 1.47% | 1.19% | 0.56% |
| Depreciation | ₹142.00 | ₹114.00 | ₹93.00 |
| Dep %of Sales | 0.88% | 1.09% | 0.48% |
| EBIT Margins | 0.93% | -0.10% | 0.99% |
| Other Income | 268 | 165 | 152 |
| Earnings Before Tax | ₹181.00 | ₹30.00 | ₹235.00 |
| EBT % Sales | 1.12% | 0.29% | 1.22% |
| Tax | ₹64.00 | ₹17.00 | ₹74.00 |
| Effective Tax Rate | 35.36% | 56.67% | 31.49% |
| PAT | ₹117.00 | ₹13.00 | ₹161.00 |
| NPM | 0.73% | 0.12% | 0.84% |
| No. of Equity Shares | 22.5 | 22.5 | 22.5 |
| Earning Per Share | ₹5.20 | ₹0.58 | ₹7.16 |
| EPS Growth % | 0.00% | -88.89% | 11.38% |
| Dividend Per Share | ₹0.00 | ₹0.00 | ₹0.00 |
| Dividend Payout Ratio | 0.00% | 0.00% | 0.00% |
| Retained Earnings | 100.00% | 100.00% | 100.00% |
| Particulars (lakh) | 2020 | 2021 | 2022 |
| Cash flow from Operating | -₹1,071.00 | -₹192.00 | ₹988.00 |
| Cash flow from Investing | ₹685.00 | ₹120.00 | ₹1,164.00 |
| Cash flow from Financing | ₹167.00 | ₹136.00 | ₹684.00 |
| Net Cash Flow | ₹512.00 | ₹305.00 | ₹1,773.00 |
Comparison With Peers:
| Name of the Company | Revenue(Cr) | Profit(Cr) | EPS | P/E | CMP | MCap |
| Crayons Advertising Limited | 265 | 16.9 | 6.92 | 9.40 | 65 | 158.7 |
| Affle (India) Limited | 1,434 | 245 | 18.36 | 49.60 | 910 | 12,127 |
| Vertoz Advertising Limited | 83 | 11 | 9.22 | 27.9 | 257 | 308 |
| Pressman Advertising Limited | 12.66 | 4.12 | 1.76 | 48.3 | 85 | 199 |
Recommendation on Crayons Advertising Limited IPO:
Review and Recommendation of Crayons by IZ team is 5/10
1. Incorporated in 1986, Crayons Advertising Limited is an Integrated marketing and communications agency. They offer 360-degree solutions to a wide array of clients.
2. Crayons is one of the few agencies that can truly claim to be fully integrated and independent in providing marketing and communications solutions. It has provided a wide area of scope of work being offered and provided to its clients.
3. The services are offered under various advertisement modes such as Newspapers, Brochures, Magazines, Television Channels, FM channels, and display of Outdoor Hoardings, etc.
4. The revenue was 161 Cr in Fy20 but dipped in Fy21 to 104 Cr due to Covid. After that in Fy22 and 9MFY23 Crayons has clocked revenue of 192 Cr and 203 Cr respectively.
5. Gross Margins in the business is low around 12-20% in the last 4 years. They have highest Gross margins in 9MFY23 period.
6. PAT has increased from ~1 Cr in Fy20 to ~12 Cr in 9MFY23.
7. EPS of 9MFY23 Annualized = 6.55 and P/E is 9.92. However, last 4 years i.e. Fy20, Fy21, Fy22 and FY23, the average EPS would be ~2 per share and P/E on that would be 32x.
8.Due to the high working capital requirement, the company is not able to generate positive cash flow from operations.
Lead Manager of Crayons Advertising Limited IPO:
Registrar of Crayons Advertising Limited IPO:
Company Address:
Crayons Advertising Limited
NSIC Complex,
Maa Anandmayee Marg Okhla Industrial Estate,
Phase- III New Delhi 110020
Phone: +91 - 9654993221
Email: cs@thecrayonsnetwork.com
Website: http://www.thecrayonsnetwork.com/
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