Master Components Limited IPO

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i. Master Components Limited is engaged in manufacturing plastic engineering components and subassemblies. Their product is a industrial capital goods and it undergoes stringent quality tests to meet industry standards before they are delivered to their clients. They believe that the proximity of the Nashik facility to Mumbai- Pune Highway, and ability to produce a comprehensive range of plastic components provides us significant competitive advantages.

ii. Due to their ability to produce multiple kinds of moulded products at a single location, they are able to cater to various sector MNC’s and their smaller business associates who generally require components of different size and shapes. They endeavor to promptly address any concerns of our business associates through significant senior management engagement.

Their specialization and primary activity is moulding the materials to produce our components. Following are list of their services:

i. Thermoplastic Injection Moulding
ii. Thermoset Injection Moulding
iii. Thermoset transfer moulding
iv. Compression Moulding

All the moulding takes place at their facility on machines which has a capacity ranging from 60-450 tonnes and they mould products ranging from 1gm to 1500gms. They have on-payroll employee strength of 27 persons as on September 30, 2022 and thye also employ contract employees for project specific works on professional basis from time to time.

Competitive Strengths

i. Experienced Promoters and Teams
ii. Strong Financial Performance
iii. Long Standing Relation with Customers

Objects of the Master Components Limited IPO:

The company proposes to utilize the Net Proceeds from Issue towards funding the following objects: i. Funding Working capital requirements. ii. General Corporate Purpose. The total number of shares issues is: - a. Fresh issue of 700,800 shares. b. Offer for Sale of 403,200 shares.
DRHP of Master Components Limited IPO
RHP of Master Components Limited IPO

Master Components Limited IPO Details:

Open Date: Sep 18 2023
Close Date: Sep 21 2023
Total Shares: 1,104,000
Face Value: ₹ 10 Per Equity Share
Issue Type: Fixed Price Issue IPO
Issue Size: 15.46 Cr.
Lot Size: 1000 Shares
Issue Price: ₹ 140 Per Equity Share
Listing At: NSE Emerge
Listing Date: Sep 29 2023

Promoters And Management:

Mudduraj Kulkarni, aged 56 years is the one of the founding promoter of the Company. He has being part of the Board since inception and is currently designated as Chairman and Managing Director of the company. He has completed his Diploma in Tool and Die Making from Nettur Technical Training Foundation in the year 1988. He has an rich experience of over 3 decades in Tool design, Manufacturing, Vendor development, assembly lines commissioning. He was previously associated with Crompton Greaves Limited and was actively involved in many trouble shooting activities and also in ISO 9001 accreditation of Crompton Greaves Limited before starting the company. He is currently responsible for the overall working of the Company and is instrumental in making strategic decisions for the Company and has been guiding force behind the growth of the company. Shrikant Joshi, aged 55 years is the one of the founding promoter of the Company. He has being part of the Board since inception and is currently designated as Whole time Director and Chief Financial Officer of the company. He has completed his Diploma in Tool and Die Making from Nettur Technical Training Foundation in the year 1988. He was previously associated with Crompton Greaves Limited before commencing operation of the company. He has an experience of over 3 decades experience in the area of selection, commissioning, productionisation of CAD/ CAM Centre which involves Charmilles wire cut & spark erosion machine, Deckel maho machining centre, Pro- engineer software. He looks after the overall sourcing of raw materials. He is also responsible for efficient mobilization of funds. Rajeshwari Kulkarni, aged 48 years is the Non-Executive Director of the company. She is part of the Board since April 05, 2003. She is an undergraduate. She has an experience over a Decade and is responsible for Production related activities of the Company and also is an integral part of the company.

Financials of Master Components Limited IPO:

Particulars ( In Lakhs )
2021
2022
2023
Revenue from Operations 1,325 1,824 2,070
Other Income 3 19 20
Total Revenue 1,329 1,843 2,090
Cost of material consumed 969 1,426 1,569
Changes in inventories -29 -38 -25
Employee Benefits Expense 131 163 171
Other Expenses 34 49 41
Prior Period Expenses 0 10 0
EBITDA 223 232 334
Depreciation & Amortisation 92 85 83
Finance Cost 26 16 9
EBIT 131 146 251
OPM (%) 16.78% 12.56% 15.98%
PBT 105 130 242
Tax 28 37 71
PAT 77 94 171
NPM (%) 5.81% 5.09% 8.16%
No.of Shares 40 40 40
EPS 1.93 2.34 4.26

Comparison With Peers:

Name of the Company Revenue (In Crore) PAT (In Crore) EPS ( in Rs) P/E CMP Mcap (In Crore)
Master Components Limited 21 2 4.26 32.84 140 56
Bright Brothers Ltd 207 -4 -6.65 N/A 168 95
Shaily Engineering Plastic Ltd 607 35 38.32 43 1,794 1,646
Mitsu Chem Plast Ltd 309 12 9.77 27 179 216
* All the data is as per FY23.

Recommendation on Master Components Limited IPO:

Review and Recommendation of Master Components Limited SME IPO by IZ team is 4/10

Business Overview

Master Components Limited is a specialized manufacturer of plastic engineering components and subassemblies, offering a comprehensive range of moulding services. The company enjoys a strategic location near the Mumbai-Pune Highway, giving it a logistical advantage.

Competitive Strengths

1. Experienced leadership with over three decades of industry experience. 2. Consistent financial performance demonstrating revenue growth and profitability. 3. Long-standing relationships with customers, indicating business sustainability.

IPO Details

a) Total Shares: 1,104,000 b) Issue Price: ₹140 Per Equity Share c) Listing At: NSE Emerge d) Listing Date: Sep 29, 2023

Use of Funds

The IPO proceeds are planned to be utilized for working capital requirements and general corporate purposes.

Financial Highlights

a) Revenue growth from ₹1,325 lakhs in 2021 to ₹2,070 lakhs in 2023. b) Operating Profit Margin of 15.98% and Net Profit Margin of 8.16% in 2023. c) Earnings Per Share (EPS) of ₹4.26 in 2023.

Peer Comparison

The company's valuation metrics appear competitive when compared to industry peers like Shaily Engineering Plastic Ltd and Mitsu Chem Plast Ltd.

Recommendation

Given the company's strong business fundamentals, experienced management, and promising financials, Master Components Limited presents a compelling investment opportunity in its upcoming IPO. However, investors are advised to conduct their own due diligence

Lead Manager of Master Components Limited IPO:

  1. Aryaman Financial Services Limited

Registrar of Master Components Limited IPO:

  1. Bigshare Services Private Limited

Company Address:

Master Components Limited Plot No. D-10/A and D-10/B, M.I.D.C, Ambad, Nashik - 422010 Phone: +91 9823016315 Email: compliance@master-components.com Website: https://master-group.in/components

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