i. Mr. Vishesh Handa, is one of the Promoters and currently the Chairman and Managing Director of the Company. He holds a bachelor’s degree in Technology in Metallurgical Engineering & Material Science from Indian Institute of Technology, Bombay and post graduate diploma in management for executives from the Indian Institute of Management, Calcutta. He has work experience of 23 years in Information Technology sector. He specialises in Technology, Operations and Strategy Management matters. He has been associated with Infosys Technology as Software Engineer, HSBC software development India Private Ltd as Associate Project Manager, and Google India Pvt. Ltd as Online sales and operation manager. He has been actively involved in the day-to-day operations and currently overseeing & controlling the overall administration and finance. He has been associated with the Company since June 16, 2020. ii. Mr. Mukunda Raghavendra, is one of the Promoters and currently the Whole-Time Director of the Company. He holds a diploma in Electronic & Communications from Karnataka Technical Board, Bengaluru. He has work experience of 29 years in post-sales activity, warranty service delivery, OEM services, repair & refurbish services, customer walk-ins services, people management, business development from existing customer. He has been associated with Symmentric Technologies as Team Leader of Customise service division, PSI data system as Systems engineer, and HCL as Senior. Consultant-Channel Support. He has been associated with our Company since June 16, 2020. iii. Mrs. Ankita Handa, is Non-Executive Director of the Company. She holds a bachelor’s degree in Electronics and Telecommunications Engineering from Vivekanand Education Society's Institute of Technology, University of Mumbai and MBA from Department of Management Sciences, University of Pune. She has work experience of 17 years in operations & quality management. She has extensive experience in managing large teams and conducting cross functional trainings. She has been associated with Amazon Development Centre (India) Private Limited as Transaction Risk lnvestigator and HSBC Software Development India Private Limited as Software Engineer. She has been associated with our Company since January 13, 2023.

Name of the Company	Revenue (In Crore)	PAT (In Crore)	EPS ( in Rs)	P/E	CMP	Mcap (In Crore)
NewJaisa Technologie s Limited	45	7	2.09	22.4	47	151
Cerebra Integrated Technologies Ltd	86	3	0.21	N/A	6	72

* All the data is as per FY23.

Review And Recommendation of Newjaisa SME IPO by IZ team is 5/10

A) Market Context

The Indian refurbished computers and laptops market is expected to reach $1.1 Billion by 2023 and is projected to soar to $3 Billion by the end of 2033. The market growth is estimated at a CAGR of 9.8%. The refurbished laptop segment is projected to dominate the market with a 71.8% revenue share in 2023, and online sales channels are expected to grow at a CAGR of 10.6%.

B) Why Consumers Opt for Refurbished Products

Understanding why consumers opt for refurbished laptops and PCs can offer insights into the business dynamics. Here are some key reasons: 1. Cost-Effectiveness: Significantly cheaper than new products, appealing to budget-conscious consumers, students, and startups. 2. Quality Assurance: Comes with certifications and warranties similar to new products. 3. Eco-Friendly: Reduces e-waste, appealing to environmentally conscious consumers. 4. Quick Upgrades: Allows for frequent hardware upgrades at reduced costs. 5. Broad Range of Choices: Offers more options than what might be available in the new-product market.

C) Business Model and Offerings of Newjaisa SME IPO

Newjaisa Technologies operates a technology-driven, direct-to-consumer business model specializing in refurbished IT electronics. The company aims to reduce e-waste by extending the life of IT assets like laptops, desktops, and peripherals. They provide these electronics in nearly new condition with warranty support at affordable prices. Their end-to-end reverse supply chain makes them unique.

D) Risk in Refurbished Business of Newjaisa SME IPO 1. Product Quality and Reliability

a) Risk: Refurbished products might not meet the quality standards of new products, leading to higher return rates. b) Impact: This could increase costs and harm the brand reputation.

2. Warranty and Support

a) Risk: Providing warranties similar to those for new products could prove costly if the products have higher failure rates. b) Impact: This could affect profit margins and customer trust.

3.  Supply Chain Complexity

a) Risk: The reverse logistics involved in acquiring, refurbishing, and selling the products can be more complex than traditional supply chains. b) Impact: Operational inefficiencies can erode profit margins.

4. Consumer Perception

a) Risk: Consumers may perceive refurbished products as inferior, affecting demand. b) Impact: Lower demand could lead to inventory pile-up and reduced profitability.

5. Competition

a) Risk: The market for refurbished electronics is becoming increasingly competitive, with both organized and unorganized sectors. b) Impact: Increased competition could lead to price wars and reduced market share

E) Customer Segments

Newjaisa Technologies focuses on four key customer segments: students, home users, SMEs, and working professionals. The company operates and caters to the Pan-India customer base through e-commerce and online platforms like Amazon.

F) Objectives of the IPO

The IPO aims to raise capital for: 1. Expansion of refurbishment facilities 2. Purchase of plant, machinery, and equipment 3. Investment in technology development 4. Branding and marketing 5. Funding working capital 6. Repayment of bank facilities and other corporate purposes

G) Financials of Newjaisa SME IPO

The company has shown promising growth in the past three years: 1. Revenue increased from ₹9.61 in 2021 to ₹44 Cr in 2023. 2. The EBITDA has grown substantially from ₹1.10 Cr in 2021 to ₹8.77 Cr in 2023. 3. EPS increased from 0.23 in 2021 to 2.09 in 2023. 4. A noticeable jump in Net Profit Margin (NPM) from 7.64% to 15.17%. 5. However, due to high level of inventory not able to generate cash from operations.

H) Valuation of Newjaisa SME IPO

With an issue price of ₹44-47 per equity share and a P/E ratio of 22.4, the company seems to be reasonably valued when compared to its peer Cerebra Integrated Technologies Ltd. The company's market capitalization post-IPO would be ₹151 crores, making it a substantial player in the refurbished electronics segment.

I) Promoters and Management

The management team has substantial experience in the technology sector. Mr. Vishesh Handa, the Chairman and Managing Director, has 23 years of experience in the IT sector, which includes prestigious stints at Infosys and Google.

J) Conclusion: Investment Recommendation

Given the robust growth prospects in the refurbished electronics market, coupled with Newjaisa Technologies' solid financials, experienced management, and reasonable valuation, this IPO presents an attractive investment opportunity. The various reasons consumers opt for refurbished products further validate the business model and its potential for long-term success. However, investors should also be mindful of the risks involved, including market competition and the sustainability of growth rates. Overall, investing in Newjaisa Technologies' IPO could offer both short-term listing gains and long-term growth potential.

Newjaisa Technologies Limited 207/B2, 2nd Cross Road, J.C, Industrial Estate Bikasipura Main Road, Off Kanakpura Road, Near Delhi Public School, Bangalore - 560078 Phone: +91 93901 77182 Email: cs@newjaisa.com Website: https://newjaisa.com/