EPACK Durable Limited IPO

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Evolution from OEM to ODM:

The company began as an original equipment manufacturer (OEM) for RAC brands in 2003 and has since evolved into an ODM, focusing on product development and innovation.

Manufacturing Capabilities:

In addition to RACs, the company manufactures various components such as sheet metal, injection-molded parts, cross flow fans, and PCBAs. These components are used in RACs, showcasing a high level of backward integration in their operations.

Expansion into SDAs: To diversify revenue streams and capitalize on their existing infrastructure, the company ventured into the SDA market. They design and manufacture products like induction cooktops, mixer-grinders, and water dispensers.

Product Portfolio:

  • RACs: The company designs and manufactures a range of RACs, including window air conditioners (WACs), indoor units (IDUs), outdoor units (ODUs), and split inverter air conditioners, with various energy ratings and refrigerants.
  • SDAs: Their SDA portfolio includes induction cooktops, mixer-grinders, and water dispensers.
  • Components: Production includes heat exchangers, fans, metal parts, injection-molded components, copper products, PCBAs, motors, and coils, both for their use and for customers.

Research and Development (R&D):

The company has robust R&D capabilities with centers in Greater Noida, Bhiwadi, and Dehradun, focusing on product development, manufacturing methods, process improvements, and energy efficiency. Their R&D team has grown significantly, emphasizing their commitment to innovation.

Manufacturing Facilities:

The company started with a single unit in Dehradun in 2003 and has expanded to multiple facilities in Dehradun, Bhiwadi, and Sri City. These facilities have a substantial combined manufacturing capacity for both RACs and SDAs, showcasing the company’s growth and scalability.

Vertical Integration and Operational Efficiency:

Their manufacturing model is vertically integrated, enabling control over operational costs and logistics. This model also allows for efficient manufacturing of components and assembly in a single location.

Leveraging Existing Capabilities:

The company effectively utilized its existing RAC manufacturing infrastructure to expand into the SDA market, saving on potential high capital expenditure typically associated with diversification.

Overall, the business overview reflects a company that has strategically grown and diversified its operations over the years, maintaining a strong focus on innovation, operational efficiency, and customer-centricity. Their ability to adapt and leverage existing capabilities for expansion into new markets is a key factor in their success.

Objects of the EPACK Durable Limited IPO:

The company proposes to utilize the net Proceeds from the Fresh Issue towards funding the following objects: i. Funding capital expenditure for the expansion/setting up of manufacturing facilities; ii. Repayment and/or prepayment, in part or in full, of certain outstanding loans of the company; iii. General corporate purposes.
DRHP of EPACK Durable Limited IPO
RHP of EPACK Durable Limited IPO

EPACK Durable Limited IPO Details:

Open Date: Jan 19 2024
Close Date: Jan 23 2024
Total Shares: 27,828,351
Face Value: ₹ 10 Per Equity Share
Issue Size: 640.05 Cr.
Lot Size: 65 Shares
Issue Price: ₹ 218 - 230 Per Equity Share
Listing At: NSE,BSE
Listing Date: Jan 29 2024

Promoters And Management:

Bajrang Bothra is the Chairman and Whole-time Director on the Board of the Company. He oversees the business operations and management of the Company. He has a master’s degree in commerce from Shri Ram College of Commerce, University of Delhi, Delhi. He has approximately 27 years of experience in the electronics manufacturing sector. He is currently the chairman of the MSME council of the Consumer Electronics and Appliances Manufacturers Association (“CEAMA”) (and a co-opted member of CEAMA executive committee), a patron of the Jain International Trade Organisation Administrative Training Foundation and the trustee of Bhagwan Mahavir Relief Foundation Trust. Laxmi Pat Bothra is a Non-Executive Director on the Board of the Company. He holds a diploma in mechanical engineering from Board of Technical Education, Delhi, with approximately 27 years of experience in the electronics manufacturing sector. He supports the overall administration of the Company. Sanjay Singhania is a Whole-time Director on the Board of the Company. He holds a bachelor’s degree in commerce (with major in accountancy) from Gauhati University, Guwahati, Assam and was graded in the first class, and a master’s degree in business administration from Swinburne University of Technology, Victoria, Australia. He has approximately 24 years of experience in the electronics manufacturing sector. He provides support to the finance, accounts, legal, information technology and human resources departments.

Financials of EPACK Durable Limited IPO:

A. Balance Sheet
Particular (In Million) Mar-21 Mar-22 Mar-23
Equity Share Capital 481.72 520.89 520.89
Reserves 207 698 2,427
Borrowings 2,386 3,840 4,924
Trade Payables 1,519 3,339 3,891
Other Liabilities 610 2,369 2,878
Total Liabilities 4,515 9,548 11,694
Net Block 810 2,379 3,235
Capital Work in Progress 0 85 915
Investments 0 31 48
Other Assets 379 1,003 1,736
Total NC Assets 1,189 3,498 5,935
Receivables 2,342 3,562 4,791
Inventory 1,405 2,773 2,937
Cash & Bank 115 590 755
Other Assets 153 345 224
Face value 10 10 10
B. Profit & Loss Statement
Particular (In Million) Mar-21 Mar-22 Mar-23
Sales 7,362 9,242 15,388
Raw Material Cost 6,550 7,985 12,988
Purchases of Stock In Trade 0 0 296
Change in Inventory -59 -41 -44
Employee Cost 170 233 334
Other Expenses 281 378 788
Other Income 34 32 14
Depreciation 90 163 261
EBITDA 454 720 1,039
EBITDA Margin 6.17% 7.79% 6.75%
Interest 256 294 315
Profit before tax 109 263 440
Tax 31 89 121
Net profit 78 174 320
NPM (%) 1.05% 1.88% 2.08%
C. Cash Flow Statement
Particular (In Million) Mar-21 Mar-22 Mar-23
Cash From Operating Activity
Profit From Operation 470 722 1,058
Receivable -367 -1,016 -1,255
Inventory -53 -1,197 -170
Payable 129 1,690 559
Other WC Items 313 -397 123
Working Capital Changes 22 -920 -743
Direct Taxes -18 -92 -127
Net Cash Inflow from Operating Activity 474 -289 188
Cash from Investing Activity
Fixed assets purchased -54 -1,425 -2,243
Fixed assets sold 7 1 4
Investments purchased 0 -31 -26
Other investing items -20 -587 90
Net cash inflow from investing activities -67 -2,042 -2,175
Cash from Financing Activity
Proceeds from shares 0 1600 1600
Proceeds from borrowings 507 1552 1375
Repayment of borrowings -653 -290 -294
Intrest paid fin -246 -216 -272
Financial liabilities -27 -30 -34
Other financing items -6 -81 -29
Net Cash Flow -18 204 359

Comparison With Peers:

Name of the Company Revenue (In Crore) PAT (In Crore) EPS ( in Rs) P/E CMP Mcap (In Crore)
EPACK Durable Limited 1539 32 3.33 68.9 230 2,203
Amber Enterprises India Ltd 6927 164 46.66 80.5 3776 12,724
PG Electroplast Limited 2,160 77 34.08 54.0 2,076 5,403
Dixon Technologies (India) Ltd 12,192 255 42.90 124.0 6,367 38,082
Elin Electronics Ltd 1,075 27 5.40 58.6 164 814
* All the data is as per FY23.

Recommendation on EPACK Durable Limited IPO:

Recommendation on Epack Durables IPO by IZ team

Lead Manager of EPACK Durable Limited IPO:

  1. Axis Capital Limited
  2. DAM Capital Advisors Ltd (Formerly IDFC Securities Ltd)
  3. ICICI Securities Limited

Registrar of EPACK Durable Limited IPO:

  1. Kfin Technology Private Limited

Company Address:

EPACK Durable Limited 61-B, Udyog Vihar, Surajpur, asna Road, Greater Noida, Gautam Buddha Nagar - 201 306 Phone: +91 120 2569078 Email: investors_ed@epack.in Website: https://epackdurable.com/

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