Eastern Logica Infoway Limited IPO

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i. Eastern Logica Infoway is engaged in multi-brand retail and retail selling as well as distribution of branded smart phones, IT hardware, software and allied accessories and services. The Company also provides networking and security solution to its consumers

ii. Eastern Logica commenced its business operations in year 1995 and believes that it has built a fair market presence with over 25 years of experience. Since the commencement of the business, they have been steadily increasing its market reach to cover 11 cities across the country by setting up retail stores, distribution centres, venturing into ecommerce and setting virtual offices. There has been a continuous rise in its revenue from operations and moreover they have demonstrated profitability with operating performance.

iii. Top 5 Customers
i. Sterne India Private Limited
ii. Eshaa Communication Private Limited
iii. Checkers India Technology Private Limited
iv. Vardhman Tele Marketing
v. Shree Balaji Commotrade Private Limited

iv. They primarily operate their business activities across retail, distribution and e-commerce platforms of branded smart phones and IT hardware & peripherals.

Retail: They focus on securing retail spaces to ensure high visibility and easy accessibility to customers. With the object of providing comprehensive solutions, the Company has set up 8 multi-brand retail outlets in 2 GST. They believe that owing to its longstanding market presence, they have been able to establish a convivial relationship with various smartphone and electronic brands which enables them to showcase its products in its multi brand retail outlets.

Distribution: They are also engaged in the distribution business of smartphones, IT hardware & peripherals, where they supply such products to retailers in the state of West Bengal and Union Territory of Delhi. They have been distributing IT hardware & peripherals to 1200+ retailers over the last two decades and currently have the right to distribution of all major laptop brands like HP, Dell, Lenovo and Asus within the territory of West Bengal and Delhi Region.

E-Commerce: In 2012, They diversified their operations by venturing into the e-commerce space by associating with the largest players of the e-commerce market. Their e-commerce website currently functions as a catalogue for the products we retail at itd stores. The company believe that its quality of service and efficiency in managing and operating its e-commerce business has enabled them to maintain business relationships with largest players of the e-commerce market, and resultantly.

Competitive Strengths
i. Experienced management team with a proven track record
ii. Strategically located business outlets and offices
iii. The scale of operations along with the long-standing relationship with leading brands and consumers enables us to earn better margins.

Objects of the Eastern Logica Infoway Limited IPO:

The Offer comprises Fresh Issue of Equity Share by the Company and an Offer for Sale by the Selling Shareholders. The Company proposes to utilise the Net Proceeds from the Fresh Offer towards funding the following objects: 1. Funding working capital requirements; and 2. General corporate purposes.
DRHP of Eastern Logica Infoway Limited IPO

Eastern Logica Infoway Limited IPO Details:

Open Date: Jan 05 2023
Close Date: Jan 09 2023
Total Shares: 753000
Face Value: ₹ 10 Per Equity Share
Issue Type: Fixed Issue
Issue Size: 16.9425 Cr.
Lot Size: 600 Shares
Issue Price: ₹ 225 Per Equity Share
Listing At: BSE SME
Listing Date: Jan 17 2023

Promoters And Management:

i. Gaurav Goel is the Managing Director cum Promoter of the Company. He holds a bachelor’s degree of Engineering (B.E.) in Electronics and Commerce from Manipal Institute of Technology, Karnataka, in the year 1995. He has been associated with the Company since December 2, 2002, as a Director of the Company, and was further re-designated as the Managing Director of the Company since July, 2014. He possesses over 15 years of experience. ii. Shweta Goel is the whole-time Director cum Promoter of the Company. She holds a Bachelor’s Degree of Arts in English from Loretto College, Kolkata, in the year 1995. She has been associated with The Company since December 2, 2002 and was further re-designated as the Whole-time Director of the Company in 2017. iii. Rakesh Kumar Goel is a Non-Executive Director cum Chairman of the Company. He holds a Bachelor’s Degree in Mechanical Engineering from Jabalpur University, in the year 1965. He possesses over 57 years of work experience, and was associated with institutions such as Texamaco, Titagarh Wagons Limited, Paharpur Cooling Towers Limited, and Hei Limited in various capacities. He has been associated with the Company since July 14, 2014.  

Financials of Eastern Logica Infoway Limited IPO:

Particulars (in lakhs) 2020 2021 2022
Revenue 49,882 44,702 61,558
EBITDA 623 762 858
EBIT 595 729 833
OPM (%) 1.25% 1.71% 1.39%
PAT 181 233 285
NPM (%) 0.36% 0.52% 0.46%

Comparison With Peers:

As per DRHP there are no listed players which are comparable to the Eastern Logica.

Recommendation on Eastern Logica Infoway Limited IPO:

Review and Recommendation of Eastern Logica Infoway IPO by IZ team is 3/10 1. Established in 1995, Eastern Logica Infoway Limited Company engages in multi-brand retail and retail selling as well as distribution of branded smart phones, IT hardware, software, and linked accessories and services and the Company also offers networking and security solutions. 2.Since starting their business, they've expanded to 11 locations by opening retail stores, distribution centres, doing ecommerce, and opening virtual offices. Note all the offices are on lease. 3. As of August 31, 2022, the Company has 8 retail outlets, 3 distribution hubs, and virtual offices in 11 cities. They primarily conduct their commercial operations through retail, distribution, and e-commerce channels for branded smart phones and IT hardware & peripherals. 4. They distribute smartphones, IT hardware, and peripherals across West Bengal and Delhi and generate 85% of its sales from these 2 states.. They've distributed IT gear & peripherals to 1200+ stores for 20 years and have the right to distribute all major laptop brands like HP, Dell, Lenovo and Asus in West Bengal and Delhi. 5. They are basically a multi-brand outlet selling products for manufacturers. There is no moat in the business and OPM is just 1.2% in Fy22. 6. The Revenue has Increased from Rs.498 Crore in FY20 to Rs.615 Crore in FY22. 7. The PAT has Increased from 1 Crore in FY20 to 2 Crore in FY22. 8. The EBITDA has Increased from 6 Crore in FY20 to 8 Crore in FY22. 9. As per FY22, EPS is 9.7, Market Capitalization is 66 Crore & P/E is 23.17x .

Lead Manager of Eastern Logica Infoway Limited IPO:

  1. Oneview Corporate Advisors Pvt. Ltd.

Registrar of Eastern Logica Infoway Limited IPO:

  1. Kfin Technology Private Limited

Company Address:

2 Saklat Place 1st Floor, Kolkata West Bengal 700 072 India

Discussion on Eastern Logica Infoway Limited IPO:

4 Comments

    Eastern Logica final subscription status –
    NII 1.92x
    Retail 1.56x

    Total Subscription 1.74x

    Reply

    Eastern Logica Day 1 Subscription –

    Non Institutional 0.30x
    Retail Investors 0.23x

    Total Subscription 0.26x

    Reply

    Eastern Logica Infoway IPO Subscription Details (times) day 1 till 3pm

    NII 0
    Retail 0.04x

    Total subscription 0.02x

    Reply

    1. They sell branded smart phones, IT hardware, software and allied accessories and services. So, they are multi-brand outlet.

    2. 85% sales comes from Delhi and West-Bengal.

    3. The sector is highly competitive. As it is a trading business, the gross margins are 2.56% and OPM is 1.39%.

    4. Company not able to generate cash flow from operations as money is getting stuck in inventory. Due to this, they have also taken short-term debt of 53 Crores.

    5. Nothing much to entice in the business of Eastern Logica.

    Reply

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