E Factor Experiences Limited IPO

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i. Incorporated in 2003, E Factor Experiences is an award-winning Indian event management company engaged in providing the consumers and community with event experiences, event services, technology based permanent & semi-permanent multimedia light & sound installations and specialized turnkey event assignments, wedding management, private and social event solutions. Their portfolio of services includes turnkey assignments in the form of Government commissioned Tourism Events and Festivals, techno-cultural light & sound shows, Sporting Events & Contests, Conferences, Mega Ground Concerts, Televised Events, private and social events like wedding and anniversary celebrations etc.

ii. The company takes pride in organizing and curating various turnkey events and experiences like “The Pushkar Fair” in the year 2015-19, converting the traditional Snake-Boat Races into league format in the year 2019, creating a beach destination with our Eco retreat project at Konark or the other Eco retreat destinations at Bhitarkanika, Odisha in 2021.

iii. They believe that their strength lies in the quality of the events and the experience of the events felt by the audience during the events which includes institutional turnkey assignments, private & social events including wedding, anniversary celebrations and other sort of celebratory functions for undertaken by us across the globe. They offer their customers with a wedding management process which is designed based on the customer requirements, that ensures a hassle-free wedding management experience.

iv. Apart from all the events that they curate and create in their events business, the company entered into a permanent and sustained business with the experiential tourism brand, “Sky Waltz” owned by theri Subsidiary company namely E-Factor Adventure Tourism Private Limited. Skywaltz is engaged in the business of managing and operating hot air ballooning and yachting activities in multiple locations in India and is a government approved commercial hot air balloon operator for the last 12 years.

v. The company has acquired 46.33% stake in Untamed Leisure and Hospitality Private Limited (formerly known as E Factor Leisure and Hospitality Private Limited) making this company their Associate company, which is engaged in the business of event management and hospitality services and other related activities of leisure and entertainment.

Competitive Strength
i. One stop solution to all event needs
ii. Established track record
iii. Established relationship with hospitality & event partners

Objects of the E Factor Experiences Limited IPO:

The company intend to utilize the proceeds of the Issue to meet the following objects: 1. Investment in Subsidiary 2. To meet Working Capital requirements 3. Repayment and/or pre-payment, in full or part, of certain borrowings availed by the Company 4. General Corporate Purpose
DRHP of E Factor Experiences Limited IPO
RHP of E Factor Experiences Limited IPO

E Factor Experiences Limited IPO Details:

Open Date: Sep 27 2023
Close Date: Oct 03 2023
Total Shares: 3,456,000
Face Value: ₹ 10 Per Equity Share
Issue Type: Book Built Issue IPO
Issue Size: 25.92 Cr.
Lot Size: 1600 Shares
Issue Price: ₹ 71 - 75 Per Equity Share
Listing At: NSE Emerge
Listing Date: Oct 11 2023

Promoters And Management:

i. Jai Thakore, aged 54 years is the Promoter and Chairman and Whole-time Director of the Company. He has been on the Board of Directors of the Company since incorporation i.e., 2003. He has completed his Bachelors in Commerce from Devi Ahilya Vishwavidyalaya, Madhya Pradesh in 1989. He is having an overall experience of around 22 years in the event & wedding management and political activation industry. He looks after the overall business affairs of the company including designing, creation & programming of contents. Under his guidance the Company has witnessed continuous growth and has been instrumental in the growth of the business. ii. Samit Garg, aged 51 years is the Promoter, Managing Director of the Company. He has been on the Board of Directors of the Company since incorporation i.e. 2003. He possesses more than 20 years of experience in the field of event & wedding management and political activation industry. He has completed Bachelors in Commerce from Lucknow Christian College, in year 1992. He has played a pivotal role in setting up business of the Company. He primarily looks after the overall business operations of the Company including Business Development, Marketing, and execution of various events of the company. He is also involved in charting new growth opportunities for the Company. iii. Aruna Garg, aged 75 years is Promoter and Whole-time Director of the Company. She possesses of around 15 years of experience in the finance field. She has been on the Board of Directors of the Company since 2022. She has completed her M.A. (Part II) from University of Lucknow in year 1968. She is responsible for the managing financial and related activities of the Company.

Financials of E Factor Experiences Limited IPO:

Particulars ( In Lakhs )
2021
2022
2023
Revenue from Operations 622 5,662 11,926
Other Income 369 39 19
Total Revenue 991 5,700 11,945
Employee benefits expenses 267 386 639
Other Expenses 470 4,855 10,076
EBITDA 254 460 1,230
Depreciation & Amortisation 41 67 94
Finance Cost 87 46 99
EBIT 213 393 1,136
OPM (%) 25.67% 8.06% 10.30%
PBT 127 347 1037
Tax 3.2 94 276
PAT 123 253 761
NPM (%) 12.46% 4.44% 6.37%
No.of Shares 130.88 130.88 130.88
EPS 0.94 1.93 5.81

Comparison With Peers:

Name of the Company Revenue (In Crore) PAT (In Crore) EPS ( in Rs) P/E CMP Mcap (In Crore)
E Factor Experiences Limited 119 7.6 5.81 12.9 75 98
Touchwood Entertainment Limited 37 2.4 2.43 94.8 154 165
* All the data is as per FY23.

Recommendation on E Factor Experiences Limited IPO:

Review And Recommendation of E Factor Experiences SME IPO by IZ team is 4/10

A) Company Overview

Sector: The company operates in the Event Management and Experiential Tourism sector. It has a diverse portfolio ranging from Government events to private functions like weddings. The company also ventures into experiential tourism through its subsidiary. In the Financial Year 2023, they have earned ~113 Cr from event and ~5 Cr from Fee on Tour Operator Service. The event management business has gross margin of ~16%.

B) Strengths

1. One-Stop Solution: The company provides an array of services, making it a one-stop-shop for all event-related needs. 2. Established Track Record: The company has been in the business since 2003, displaying longevity and expertise. 3. Hospitality & Event Partners: Strong partnerships are crucial for scale and quality.

C) Diversification

1. Sky Waltz: Engages in hot air ballooning and yachting activities, adding another revenue stream. 2. Untamed Leisure and Hospitality: Provides leisure and hospitality services, further diversifying their business model..

D) Financials

The company has shown impressive growth in revenue from 2021 to 2023. The revenue has increased from INR 6.22 Cr to INR 119 Cr but margins have dropped drastically from NPM of 12% in FY21 to 6.37% in FY23. This is due to high cost of managing the events, thereby putting the pressure on margins. In the last 3 years, the company has generated the cash flow from operations of  ~2 Cr.

E) IPO Details

1. Issue Size: ₹25.92 Cr. 2. Issue Price: ₹71 - 75 per equity share. 3. Listing: NSE Emerge 4. Use of Proceeds: Investment in a subsidiary, working capital, debt repayment, and general corporate purposes.

F) Sectoral Challenges

1. Event Cancellations: Unpredictable factors like weather or a pandemic can lead to cancellations. 2. High Operational Costs: Events often require significant investments upfront. 3. Regulatory Hurdles: Permissions and licenses are often required, which can be time-consuming.

G) IPO Analysis

1. Valuation: With an EPS of 5.81 and a P/E ratio of 12.9, the company appears to be reasonably valued compared to its competitor. 2. Use of Funds: The funds are earmarked for essential aspects like investment in subsidiaries and working capital, which is positive. 3. Promoters: The promoters have been associated with the company since its inception and have significant experience.

Conclusion

E Factor Experiences Limited shows promise with its diversified offerings and established track record. The IPO appears to be strategically positioned to help the company grow further. The valuation looks comfortable. However, potential investors should also consider the inherent risks in the event management sector before making an investment decision.

Lead Manager of E Factor Experiences Limited IPO:

  1. Hem Securities Limited

Registrar of E Factor Experiences Limited IPO:

  1. Maashitla Securities Pvt. Limited.

Company Address:

E Factor Experiences Limited 101-A, Kundan Kutir Hari Nagar Ashram New Delhi110014, India Phone: +91-120-3100184 Email: cs@efactorexp.com Website: http://www.efactor4u.com/

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