Exxaro Tiles Limited IPO

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(i) The company is engaged in manufacturing and marketing of vitrified tiles used majorly for flooring solutions. Its business operations are broadly divided into two product categories:

• Double Charge Vitrified Tiles: Double charge vitrified tiles are tiles that are fed through a press which prints the pattern with a double layer of pigment, 3 to 4 mm thicker than other types of tiles. This process does not permit complex patterns but results in a long-wearing tile surface, suitable for heavy traffic commercial projects.

• Glazed Vitrified Tiles: Glazed vitrified tiles are flat slabs manufactured from ceramic materials such as clay, feldspar and quartz and other additives and fired at high temperatures to ensure high strength and low water absorption. These tiles are coated with glaze materials prior to the firing process.

(ii) Some of its key product development highlights include:
1) 3D Effect in Double Charge Vitrified Tiles
2) Replica of Natural Stones in Double Charge Vitrified Tiles
3) High transparent glaze in weight method for glazed vitrified tiles.

(iii) Domestically, it has PAN India presence (27 states) and internationally it supply products in over 13 countries including Poland, UAE, Bosnia etc

(iv) It has two state-of-the-art manufacturing facilities which are located at Padra and Talod respectively in Gujarat. It has a combined installed production capacity of 1,32,00,000 sq. mt. p.a.

Competitive Strengths
(i)
Widespread sales and dealers network
(ii) Wide product portfolio
(iii) Experienced management

Objects of the Exxaro Tiles Limited IPO:

The Offer comprises a Fresh Issue & Offer for Sale -- Fresh issue of 11,186,000 Eq Shares aggregating up to ₹134.23 Cr, Net Proceeds from the issue will be used in: 1. Prepayment/repayment of certain secured borrowings availed by our Company 2. Funding the working capital requirements of the Company 3. General corporate purposes -- Offer for sale of Eq shares 2,238,00o aggregating up to ₹26.86 Cr

Exxaro Tiles Limited IPO Details:

Open Date: Aug 04 2021
Close Date: Aug 06 2021
Total Shares: 13,424,000
Face Value: ₹ 10 Per Equity Share
Issue Type: Book building
Issue Size: 160 Cr.
Lot Size: 125 Shares
Issue Price: ₹ 118 - 120 Per Equity Share
Listing At: NSE,BSE
Listing Date: Aug 16 2021

Promoters And Management:

(i) Mr. Kirankumar Patel, aged 36 years, is Whole-time Director and one of the Promoters of the Company. He has been on the Board of Directors since January 24, 2012. He has been appointed as the Whole-Time Director of the Company on on January 6, 2021. He does not have a formal education degree. Prior to joining the Company, he was a proprietor of a proprietary concern, M/s. Sunshine Vitrified Tiles from 2006 till 2011. (ii) Mr. Dineshbhai Patel, aged 51 years, is Whole-time Director and one of the Promoters of the Company. He has been associated with the Company since 2014. He has been appointed as the Whole-Time Director of the Company on January 6, 2021. He does not have a formal education degree. Prior to joining the Company, he was associated with Regent Granito (India) Limited from 2002 till 2007 as Manger Production and Operations and with Classic Microtech Private Limited from 2007 to 2012 as Manager – Production Operations and was involved in managing production activities of the aforesaid companies, during his association. (iii) Mr. Kamal Dave, aged 42 years, is the Independent Director of the Company. He has been associated with the Company since 2021. He is a practicing Chartered Accountant and is the sole proprietor of M/s. Kamal Dave and Co. since 2009 till date and a member of the Institute of Chartered Accountants of India. He has an overall work experience of 12 years in the field of accounts and finance.

Financials of Exxaro Tiles Limited IPO:

 
Particulars (Million) Mar 21 Mar 20 Mar 19
Revenue 2551 2407 2422
Cost of material consumed 779 949 836
Purchases of Stock 76 70 44
Change in WIP -12 -306 70
Employee Benefit Expenses 192 265 291
Other Expenses 1041 999 802
Operating Profit 475 430 379
OPM % 18.6% 17.80% 15.6%
Other Income 47 32 17
Depreciation & Amortisations 136 142 140
Financial Cost 212 197 178
Profit Before Tax 171 121 76
Net Profit 152 112 89
NPM% 5.96% 4.65% 3.67%
EPS 4.54 3.36 2.66
 

Comparison With Peers:

Name of the company 3-year Revenue Growth 3-year PAT Growth EBITDA Margin (FY21) ROE  (FY21) Debt to Equity P/E 3 Years Return
Exxaro Tiles Ltd 2% 20% 19% 11.88% 1.05 NA NA
Kajaria Ceramics Ltd -2% 11% 18% 17.20% 0.07 51.40 29.36%
Asian Granito India Ltd 3% 39% 11% 10.16% 0.42 10.55 -15.51%
Somany Ceramics Ltd -1% 8% 12% 11.02% 0.61 43.15 9.57%
Orient Bell Ltd -4% -8% 7% 2.62% 0.16 39.29 11.86%
Murudeshwar Ceramics Ltd -14% -34% 11% -3.56% 0.25 NA -6.52%

Recommendation on Exxaro Tiles Limited IPO:

Review and Recommendation of Exxaro Tiles IPO from InvestorZone is 3/10 1. There is no growth in the company in the last 3 years. In fact, if you see the peers, it is clearly seen the whole sector is struggling. 2. On flat revenue growth, the company has increased the bottomline by reducing the employees benefit expenses from ~30 Crores in FY19 to ~20 Crores in FY21. This is clear sign of stress in the business. 3. As compared to peers, the D/E pre-IPO is more than 1. 4. Among peers, Asian Granito has shown growth of 3% and all other peers are struggling. 5. EPS post issue = 3.5 and P/E of 34x which looks reasonable as compared to peers.

Lead Manager of Exxaro Tiles Limited IPO:

  1. Pantomath Capital Advisors Private Limited

Registrar of Exxaro Tiles Limited IPO:

  1. Link Intime India Private Limited

Company Address:

Exxaro Tiles Limited Survey No. 169 & 170, Vavdi Harsol Road, At & Po. Mahelav, Taluka: Talod, Sabarkantha - 383 305 Phone: +02772-350555 Email: cs@exxarotiles.com Website: http://www.exxarotiles.com/

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