Retina Paints Limited IPO

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i. Retina Paints is into manufacturing of Decorative Paints like Distempers, Primers, Wall Care Products, Emulsions, etc and further sell them to different Distributors. They source their raw materials at present indigenously for manufacturing of Paints. Their waterbased paints are used for residential and for commercial buildings. The company has recently introduced tinting machines in the Company. The tinting machine comprises a plurality of colorant reservoirs containing colorant, one or more cleaning fluid supply conduits and one or more dispenser heads for dispensing colorant into a paint container.

ii. The Company works on B2B Business Model, it sell its products to the dealers and distributors and then they sell to the end customers. It has a huge network of Distributors in the markets of Telangana and Andhra Pradesh and also have presence in Odisha for selling its Product. Retina Paints is having exposure to the markets of Telangana, Andhra Pradesh and Odissa, soon it will be expanding to other states as well.

iii. The Company already has water-based products in the basket, it is also aiming for oil-based products. Oil-based products are applied to wood, iron, etc. With oil products, it will be able to increase its turnover substantially. After the issue, the company is planning to sell the products directly to the end customers too along with selling it to the Distributors.

iv. Spectrum of products:

i. EXPO ULTIMAX – Premium Exterior Emulsion
ii. EXPO EXTERIOR EMULSION
iii. GLOW PREMIUM – Premium Interior Emulsion
iv. GLOW INTERIOR EMULSION
v. X-GEN CEMENT PRIMER
vi. ECO – EXTERIOR CEMENT PRIMER
vii. JET CEMENT PRIMER
viii. EYE – PREMIUM WASHABLE DISTEMPER
ix. SPRAY PLASTERS
x. WALL CARE’

v. Competitive Strengths

i. They have an excellent marketing team
ii. They sell their products in Business to Business (B2B) category
iii. Double Quality Checks.

Objects of the Retina Paints Limited IPO:

The Company intends to utilize the Net Fresh Issue Proceeds for the following Objects: i. Working Capital Requirements ii. General Corporate Purposes.
DRHP of Retina Paints Limited IPO
RHP of Retina Paints Limited IPO

Retina Paints Limited IPO Details:

Open Date: Apr 19 2023
Close Date: Apr 24 2023
Total Shares: 3,700,000
Face Value: ₹ 10 Per Equity Share
Issue Size: 11.10 Cr.
Lot Size: 4000 Shares
Issue Price: ₹ 30 Per Equity Share
Listing At: BSE SME
Listing Date: May 03 2023

Promoters And Management:

Mr. Rakesh Dommati, aged 38 years. He has a degree in Master of Business Administration completed in the year 2008 from Kakatiya University. He is the Founder and one of the First Director of the Company, later he was designated as the Managing Director of the Company with effect from December 01, 2022 till November 30, 2027 for a period 5 years. He has around 12 years of experience across sectors in Business Development, execution of orders, etc. He has proven ability to quickly analyse key business drivers and develop strategies. He is a high integrity and energetic leader known for his ability and create successful outcome in complex situations. Ms. Rajitha Koyyada, aged 41 years, holding a Degree of Master of Science from Osmania University, in the year 2008. She was appointed as Non-Executive Director of the Company with effect from September 14, 2018, later she was Designated as Whole Time Director of the Company with effect from December 01, 2022 till November 30, 2027 for a period 5 years. She is associated with the Company since its Incorporation. She looks after the Production in the Company and overall management of the Company. Ms. Chithra Ramu, aged 56 is the Non-Executive Director of the Company. She has a Degree in Bachelor of Engineering from Bharathiar University, Coimbatore passed in the year 1987. She was appointed as Additional Non-Executive Director with effect from November 25, 2022 and was further regularised as a Non-Executive Director with effect from November 30, 2022.

Financials of Retina Paints Limited IPO:

Particulars ( In Lakhs ) 8MFY23 2022 2021 2020
Revenue from Operations 528 638 686 680
Other Income 6.21 8.97 0.22 1.00
Total Revenue 534 647 686 681
Cost of Material Consumed 236 415 385 435
Changes in Inventories -33 -94 -7 -95
Employee Benefits Expense 72 86 101 123
Other Expenses 171 177 157 184
EBITDA 87 63 50 35
Depreciation & Amortisation 8 10 6 7
Finance Cost 20 33 35 17
EBIT 79 53 44 28
OPM (%) 16.28% 9.73% 7.31% 5.13%
PBT 59 20 9 8
Taxes 19 9 4 3
PAT 40 11 5 5
NPM (%) 7.49% 1.75% 0.66% 0.69%
No.of Shares 139 139 139 139
EPS 0.28 0.08 0.03 0.03
P/E 104.57 369.11 919.12 895.50

Comparison With Peers:

Name of the Company Revenue (Cr) Profit (Cr) P/E EPS CMP Mcap (Cr)
Retina Paints Limited 8 0.6 69.72 0.43 30 41
Asian Paints Limited 33,594 3,811 69.2 38.81 2,754 2,64,129
Indigo Paints Limited 1,036 118 43.2 24.78 1,068 5,085
All the Financial Data is of FY23.

Recommendation on Retina Paints Limited IPO:

Review and Recommendation of Retina Paints Limited SME IPO is 2/10

1. Retina Paints is into manufacturing of Decorative Paints like Distempers, Primers, Wall Care Products, Emulsions, etc and further sell them to different Distributors.

2. They source their raw materials at present indigenously for manufacturing of Paints. Their waterbased paints are used for residential and for commercial buildings. 3. The Company works on B2B Business Model, it sell its products to the dealers and distributors and then they sell to the end customers. It has a huge network of Distributors in the markets of Telangana and Andhra Pradesh and also have presence in Odisha for selling its Product. 4. The Indian decorative paint industry has historically been dominated by four major entities that had an aggregate market share of the market, as the industry presents significant entry barriers. These market entry barriers include the development of an extensive distribution network through long-term relationships with dealers, the ability to set up tinting machines with dealers, as well as significant marketing costs and the establishment of a distinct brand to gain product acceptance 5. In the last 3 years, there is no growth in the company. The revenue was close to 6.8 Crores in Fy20 and in Fy22 it is just 6.38 Crores. So, it is in degrowth path. 6. PAT is 11 Lakh in Fy22 and Annualised Fy23 PAT is ~60 lakh. On that Asking P/E of whopping 69. 

Lead Manager of Retina Paints Limited IPO:

  1. Gretex Corporate Services Private Limited

Registrar of Retina Paints Limited IPO:

  1. Bigshare Services Private Limited

Company Address:

Retina Paints Limited Block No 2, Floors 2 & 3, Survey No. 184 & 185, Opp Ganesh Kaman, Phase V, IDA, Cherlapally, Hyderabad - 500051, Rangareddi Phone: 7330641515 Email: info@retinapaints.com Website: http://www.retinapaints.com/

Discussion on Retina Paints Limited IPO:

1 Comment

    Retina Paints….. A company with meagre 8 Cr Revenue in Fy23 after annualising 8MY23 results and PAT of just 60 lakh is asking P/E equivalent of Asian Paints

    Reply

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