Parin Furniture Limited IPO

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A) Overview of the Parin Furniture

i) Parin Furniture Limited is a provider of wide and exclusive range of furniture and lifestyle products for several consumers. The Company is managed by experienced and dedicated promoters to address the changing needs of customers in the furniture industry. They are consistent in supplying of quality products around the year as customized products are made available to them as per the market demand.

ii) The Subsidiary Company namely Pearl Furniture Private Limited has well-established manufacturing unit located at  Rajkot, having high tech equipment and design facility to manufacture various combination and size of products as per specification and needs of the customers. It is equipped with all facilities to execute all types of manufacturing activities such as Panel cutting, Edge bidding, Post-forming, Painting line, Fabrication, Moulding, Cutting and Polishing & Packaging, etc. The company is using the latest machinery & technology and keeps on upgrading its manufacturing set-up, design capabilities and workmanship to deliver superior quality products with on-time deliveries and with an emphasis on quality.

iii) The Company’s core purpose is ―” To serve the world with a better lifestyle “.  The business network is spread in 18 States. They have COCO Flagship Retail Stores and around 900 dealers associated with them. They have huge stock keeping facilities having storage area with strong supply chain management. In addition to this, they have created Spacious, Specially designed showrooms for display of their various products like home furniture, office furniture, hospital furniture, institutional furniture etc”.

iv) They also have a team of experienced, highly professional and skilled manpower. The Subsidiary has hired an international designer from Turkey who develops a new product design. To maintain space and remain competitive in today‘s changing marketplace, they have various business verticals like B2B, Projects – Government & Private, Retail and E-Commerce.

B)  Company’s Products

(i) Home Furniture & Decor: The Company provides wide range of Home Furniture such as design bedroom sets, dining sets in metal and wooden, sofa sets, side tables, decor & arti-crafts like vases, wall art & wide range of soft furnishings.

(ii) Office Furniture: Under this category, they provide office seating solutions, desks, workstations and storage units which are designed keeping in mind the requirements of the modern workplace. The Company offers complete solutions for office furniture designed to meet the growing demands of modern-day business.

(iii) Hospital FurnitureUnder this category, they provide hospital beds, side tables, cabinet, ward furniture etc. which are designed keeping safety, multitude of applications and functions in mind.

(iv) Institutional FurnitureUnder this category, they provide chairs, tables, storage, lockers etc. Our storage and lockers provide singular flexibility, making it a useful storage addition to any working environment.

(v) Education FurnitureUnder this category, they are offering a quality assured assortment of Educational furniture like chair with armrest, glass door cupboards, stool for science lab, study table with drawers, dual desks, writing table etc. to schools and colleges which are designed keeping in view of durability and comfort.

C) Corporate Video Of Parin Furniture

D) A look and Feel of Parin Furniture Manufacturing Unit

Parin Furniture Limited IPO Stock Quote & Charts

67.90

+3.74%

  • Open: 74.15
  • High - Low: 74.15 - 66.45
  • Previous Close: 65.45
  • Total Traded Volume: 24000
  • Updated On: 07-Dec-2018

Objects of the Parin Furniture Limited IPO:

Objective of Parin Furniture Limited IPO are: 1. Repayment of certain Secured Borrowing availed by our Company 2. Funding the Working Capital Requirements of the Company 3. General Corporate Expenses 4. Issue Expenses

Parin Furniture Limited IPO Details:

Open Date: Sep 26 2018
Close Date: Sep 28 2018
Total Shares: 3,000,000
Face Value: ₹ 10 Per Equity Share
Issue Type: Book Built Issue IPO
Issue Size: 18.90 Cr.
Lot Size: 2000 Shares
Issue Price: ₹ 60-63 Per Equity Share
Listing At: NSE Emerge
Listing Date: Oct 09 2018

Promoters And Management:

Promoters of Parin Furniture Limited Company are: (i) Mr. Umesh Dhirajlal Nandani is the Chairman and Managing Director of the Company. He has been on the Board of our Company since its incorporation. He is a visionary entrepreneur who has approx. 35 years of experience in the furniture industry. He has played a pivotal role in setting up of a business of our Company. He currently oversees and controls overall business functions of our Company. Our Company has witnessed continuous growth under his guidance. (ii) Mr. Deven Dipesh Nandani is the Non-Executive Director of the Company. He is a third generation entrepreneur from the family. He has 1 year of experience in the Furniture industry. He is pursuing business management studies and also manages the admin department of our company. (iii) Mr. Parin Umeshbhai Nandani is the Non-Executive Director of the Company. He is a third generation entrepreneur from the family and has a wide exposure of global trends in the furniture industry. He is heading the sales & Marketing, institutionalized sales & B2B projects of our organization. Under his leadership, our company has fulfilled many government contracts, tenders as well as corporate projects

Capital Structure:

(i) Authorized Share Capital 1,25,00,000 Equity shares at FV@10) 12.5 Cr
(ii) Issued, Subscribed,& Paid-up Share Capital Before Issue (81,18,000Equity Shares at FV@10) 8.118 Cr
(iii) Present Issue ( 30,00,000  Equity Shares at FV@10) 3 Cr
(iv) Reservation for Market Maker (160000 Shares at FV@10) 16 Lakhs
(v) Reservation for QIB(28,40,00 Equity Shares at FV@10) 10%
(vi) Reservation for HNI(15,62,000 Equity Shares at FV@10) 55%
(vii) Reservation for Retail( 9,94,000 Equity Shares at FV@10) 35%
(viii) Paid Up Share Capital after the issue 11.118 Cr

Financials of Parin Furniture Limited IPO:

Particulars For the year/period ended (in Rs Lacs)
31-Mar-2018 31-Mar-17 31-Mar-16 31-Mar-15 31-Mar-14
Total Assets 4,663.61 4,344.86 3,963.39 1,948.67 1,673.60
Total Revenue 6,459.34 5,994.04 6,178.46 2,875.78 3,002.76
Profit After Tax 261.78 135.54 101.57 27.53 60.82

Comparison With Peers:

The Established brand Nilkamal is trading at Adjusted P/E of 22 and EV/EBITDA of 11.3 while on standalone basis Parin Furniture is asking Adjusted P/E of 26 and EV/EBITDA of 12.5. The issue looks overpriced. Even on the Consolidated basis, the Parin Furniture is asking an Adjusted P/E of 22.75 and EV/EBITDA of 9.13 which still looks fully priced as compared to Nilkamal. The Nilkamal is a regular dividend paying company while Parin Furniture has not declared any dividend on the Equity Shares in the past five financial years.

Recommendation on Parin Furniture Limited IPO:

Review and Recommendation of Parin Furniture Limited IPO from our team is:4/10 [The issue is fully priced based on Adjusted P/E of 22 on a consolidated basis as compared to Nilkamal. The exceptional rise in Profit for FY18 looks quite fishy. However, if good subscription comes than listing gains may be expected]

Lead Manager of Parin Furniture Limited IPO:

  1. Hem Securities Limited

Registrar of Parin Furniture Limited IPO:

  1. Karvy Computershare Private Limited

Company Address:

Parin Furniture Limited Plot No. 6, Revenue Survey No. 149, National Highway, at Vavdi, Gondal Road, Rajkot, Gujarat – 360 004, India. Phone No. +91-281-3300777 Fax No. +91-281-3063000 E-mail: cs@parinfurniture.com Website: www.parinfurniture.com

Bid Details of Parin Furniture Limited IPO as on
28-Sep-2018 18:00:00 IST

Category No.of shares offered No. of shares bid
284,000 284,000
1,562,000 2,950,000
994,000 3,714,000
160,000 160,000
3,000,000 7,108,000
QIBs Subscription 1.00X
HNI Subscription 1.89X
Retail Subscription 3.74X
Total Subscription 2.45X

Discussion on Parin Furniture Limited IPO:

      Depend upon subscription figure. The Valuation is fully priced as compared to market leader Nilkamal.

        SME runs more on a subscription basis as compared to fundamentals.

    Peer to Peer Comparison

    A) Parin Furniture LImited( On Standalone basis)

    (i) EV=90.88 Cr
    (ii) Adjusted Price=81
    (iii) Adjusted P/E=26.92
    (iv) Revenue Growth in the last 3 years =7.1%
    (v) PAT growth in the last 3 years= 93%( looks quite fishy)
    (vi) EV/EBITDA= 12.5
    (vii) Employee expense going down- not happened in growing company.
    (viii) Other Expense going down just before the IPO is fishy.

    B) Nilkamal

    (i) EV=2672 Cr
    (ii) Adjusted Price=1790
    (iii) Adjusted P/E= 22.90
    (iv) Revenue Growth in the last 3 years =5.19%
    (v) PAT growth in the last 3 years =6.58%( looks in line with Revenue growth)
    (vi) EV/EBITDA=11.3
    (vii) Employee expense going up- generally happens in a growing company
    (viii) Other Expense going up inline with the expectation of a growing company.

    Conclusion: An SME company asking valuation more than an established brand like Nilkamal is beyond my understanding.

    The Revenue of the company has increased by only 7.1% in FY18 as compared to last year. In the meanwhile, the PAT has increased by whopping 60.75% which raises doubt. The company has reduced the Employee Benefits in FY18 which is generally not happened in the growing company. The Other expense has also reduced considerably.

    The Share Capital has increased from 30 Lakh to 8.118 Cr in last one year is the cause of worry. The D/E was 5.18 in 2017, but last year due to equity dilution, it has reduced to 1.48 in FY18. Just before the IPO to make D/E look reasonable the dilution has been done.

    On 29 March 2018, the company has done private placement of 15,18,000 Equity Shares at Rs. 22 to Promoters and Promoters Group as per detail mentioned below:

    (i) Umeshbhai Nandani( Promoters) = 1,18,000
    (ii) P P Furniture Pvt Ltd( Promoter Group) = 14,00,000

    Now Company is issuing shares to the public for Rs. 60-63.