Rocking Deals Circular Economy Limited IPO

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Nature of Business: Rockingdeals Circular Economy Ltd. (Rockingdeals CE) operates primarily as a B2B re-commerce player. The company focuses on bulk trading of excess inventory, open-boxed items, re-commerce, and refurbished products. These products span various categories such as small home appliances, apparel, kitchenware, household items, speaker and mobile accessories, large appliances, footwear, etc. The inventory includes products from well-known brands like Samsung, Thomson, MI, ZARA, Nike, JBL, and others.

Supplier and Client Relationships: Rockingdeals CE sources products in bulk from various dealers, including those of Inalsa, Khaitan, and others. The company then supplies these products to clients, which include major entities like Jindal Mega Mart, Brand Wala, VLE Bazaar Private Limited, HIC International, PSUAVI, KRAT India, Zazz Technology, and sister companies (Rockingdeals Private Limited, Rockingdeals (HYD) Private Limited, Harkrishanji Products Private Limited).

Product Categories and Procurement Channels: The company deals with over 18 categories of Stock Keeping Units (SKUs), including electrical appliances, apparels & footwear, speakers, mobiles, and accessories. Products are procured from various sources such as ecommerce vendors (Snapdeal, Flipkart, Amazon), companies like GO Auto, Salora International, Zazz Technology Connect Private Limited, and dealers/distributors like Matrix Housewares, Raj Agency, Sudhi Enterprises.

Warehousing and Logistics: Rockingdeals CE operates a spacious warehouse located in Faridabad, Haryana, well-connected to the National Highway No. 02. This facility allows the company to store products in bulk quantities, facilitating efficient supply chain management.

Distribution Channels: The company employs both offline and online distribution models. Offline distribution involves distributors across various states selling products through retailers. For online sales, the company utilizes the ecommerce platform of Shopclues. Marketing efforts have been strengthened with the deployment of personnel, and a dedicated call center underpins customer relationship management.

Unique Selling Proposition (USP): The primary USP of Rockingdeals CE lies in its ability to offer unmatched final discounts on products. This is attributed to the vast experience of the team. The business model focuses on providing customers with the opportunity to save money by purchasing high-quality products at reduced prices, which may be particularly appealing to budget-conscious consumers.

Revenue Breakdown: The B2B segment constitutes a significant portion of Rockingdeals CE’s revenue, contributing 97.43% in FY 2022-23, 96.84% in FY 2021-22, and 99.94% in FY 2020-21. The company also engages in the B2C market, catering to unorganized retailers who procure products in large quantities, although this constitutes a relatively small portion of the total revenue.

Strategic Focus: The company’s prime focus is on efficiently managing surplus inventory from various brands within the B2B sector, indicating a strategic alignment with sustainability and circular economy principles

Objects of the Rocking Deals Circular Economy Limited IPO:

The company intend to utilize the net proceeds for the following objects 1. To meet the working capital requirements of the company 2.. Brand Positioning, Marketing and Advertisement 3. General Corporate Purposes.

Rocking Deals Circular Economy Limited IPO Details:

Open Date: Nov 22 2023
Close Date: Nov 24 2023
Total Shares: 1,500,000
Face Value: ₹ 10 Per Equity Share
Issue Type: Book Built Issue IPO
Issue Size: 21 Cr.
Lot Size: 1000 Shares
Issue Price: ₹ 136 - 140 Per Equity Share
Listing At: NSE Emerge
Listing Date: Nov 30 2023

Promoters And Management:

Mr. Aman Preet, aged 40 years, is Promoter cum Managing Director of the Company. He has founded Rockingdeals Circular Economy Limited in 2002. He has invested over two decades in the industry and established an integrated ecosystem spanning the B2B sourcing to the B2C retailing business. He initially worked in England for a year, which helped him streamline operations for his commerce venture. During this tenure, he gained in-depth experience in the E-commerce industry and related processes and challenges. Mrs. Kulbir Chopra aged 70 years is Promoter and Non- Executive Director of the company. She is High School Graduate. She is an accomplished and results-driven Operation Head with extensive experience in managing operations. She possesses exceptional skills in team management, process improvement, and strategic planning, which have enabled her to consistently deliver outstanding results for the company. Kulbir is a highly respected leader who is known for her ability to build and motivate high-performing teams. She provides clear guidance and mentorship to her team members, empowering them to achieve their full potential and excel in their roles. Mrs. Avneet Kaur aged 40 years, is a Promoter and Non- Executive Director of the company. She has been serving as director in Rockingdeals Private Limited since 2009. She has completed Masters of Arts in International Business Management with Merit from the University of Newcastle upon Tyne. She possesses exceptional skills in sourcing, negotiating, and managing relationships with vendors and suppliers, which have enabled her to deliver superior results for the company in the past few months. Ms. Avneet is the Spouse of the Promoter Mr. Aman Preet, Ms. Avneet was looking after the family business, she was involved in the strategy making of the group company “Rockingdeals Private Limited” since the year 2017, however was not appointed as the director in RDPL the year 2017, later she joined the RDPL as director w.e.f 28.04.2019.

Financials of Rocking Deals Circular Economy Limited IPO:

Particulars ( In Lakhs ) FY21 FY22 FY23 3MFY24
Revenue from Operations 1055.63 1482.82 1501.01 958.15
Other Income 13.99 50.27 16.52 0.00
Total Expenses 1067.44 1514.76 1312.69 788.87
Profit before Tax 2.18 18.33 204.84 169.28
Current Tax 4.57 2.44 49.46 43.92
Deferred Tax -0.90 1.52 1.04 0.21
Profit for the Period -1.48 14.37 154.34 125.15
Outstanding Shares (Post IPO) 56.59 56.59 56.59 56.59
EPS -0.002 0.25 2.72 2.20

Comparison With Peers:

No listed peer is available in the market .

Recommendation on Rocking Deals Circular Economy Limited IPO:

Review and Recommendation of Rocking Deal SME IPO By IZ team is 3/10

1. What is Rocking Deals Circular Economy Limited?

Answer: Rocking Deals Circular Economy Limited is a pioneering company at the forefront of redefining excess inventory management. They operate by serving both businesses and consumers, focusing on sustainability and smart living. Their approach is centered on providing efficiency for businesses and smart choices for consumers, thus promoting conscious consumption and championing the planet.

2. How is Rocking Deals impacting the market?

Answer: The company is making a significant impact by bridging the gap between customers needing products and those who have products to sell. They have sold millions of units, indicating a strong market presence. Their business model is not just about sales but also about promoting a mindful and meaningful consumption future where the circular economy thrives.

3. What are the business focuses of Rocking Deals?

Answer: Rocking Deals deals in a range of products including small home appliances and fashion. They have established successful agreements with major companies in e-commerce and trading. Their focus is on value-added products rather than competing with larger players or traditional retail channels.

4. What makes Rocking Deals unique in the circular economy space?

Answer: Rocking Deals is distinguished as the oldest and only brand in the country deeply involved in the circular economy, with a B2B model encompassing over 2,000 vendors across India. They differentiate through a diverse range of product categories and continual expansion. However, more than 63% revenue comes from New Jaisa and Group companies like Rockingdeals Private Limited and Rockingdeals Private Limited (Hyderabad). So, looks like very high concentration risk in the business.

5. What is the potential market size for this business model?

Answer: The concept of taking unwanted items from one individual and selling them to someone in need is viewed as a trillion-dollar business. This model is highly replicable and can be successfully implemented worldwide. However, to scale business lot of Working capital is required as this in inventory led model.

6. How does Rocking Deals view its competition?

Answer: The company doesn't see small-scale retail shops in villages and towns as competition. Instead, they focus on building a brand through trust and word-of-mouth. They are aware of unethical practices in the market, like selling refurbished products as new, but they maintain a distinct ethical stance.

7. What are Rocking Deals' financial achievements?

Answer: Rocking Deals SME IPO has experienced significant fluctuations in its financial performance over the last nine years. In FY17, the company's revenue peaked at INR 80 crores but saw a decline to INR 17 crores by FY20, with a continued decrease to INR 15 crores in FY23. The profit after tax (PAT) mirrored this downward trend, dropping from INR 49 lakhs in FY17 to INR 13 lakhs in FY22. Notably, there was an unexpected surge in PAT in FY23, where it escalated to INR 1.45 crores on a revenue of INR 15 crores, which raises questions about the sudden increase. Overall, the company's journey through the past several years shows a trajectory with multiple financial challenges and irregularities. Moreover, in Fy23, more than 38% sales has come from group companies i.e. Rockingdeals Private Limited and Rockingdeals Private Limited (Hyderabad) which deals in B2C segment and use same brand name. That we consider a risk, If the B2C company faces any negative publicity or customer dissatisfaction, it could inadvertently impact the reputation of the B2B business due to the shared branding.

8. What is the core business strategy of Rocking Deals?

Answer: Grading and refurbishing products form the core business strategy. They offer discounts based on the condition of the product, ensuring both value and sustainability.

9. Is Working Capital Intensive Business?

Answer:Yes, The business model of the company is capital-intensive, requiring substantial upfront investment to acquire inventory before it can be sold to business-to-business (B2B) clients. That is why they are raising INR 25 Cr from the IPO.

10. Valuation of the Business?

The company is pursuing a capital raise that values it at a post-money market capitalization of INR 80 crores. With a profit after tax (PAT) of INR 1.5 crores for FY23, this positions the initial public offering (IPO) at a price-to-earnings (P/E) ratio of 53 times. If projections for FY24 hold, with an expected PAT of INR 5 crores, the P/E ratio would adjust to 16 times. Typically, we do valuations based on the most recent fiscal year's numbers, which in this case would be FY23, to determine the company's value.

Lead Manager of Rocking Deals Circular Economy Limited IPO:

  1. Corporate Strategic Allianz ltd.

Registrar of Rocking Deals Circular Economy Limited IPO:

  1. Bigshare Services Private Limited

Company Address:

Rocking Deals Circular Economy Limited Shop Kh No 424 Basement Ghitorni, Gadaipur South West Delhi-110030 Phone: +91 – 83760 36354 Email: Website

Discussion on Rocking Deals Circular Economy Limited IPO:


    1. Business Model Complexity: Rocking Deals operates both B2B and B2C companies. The B2B model typically involves selling products or services to other businesses, while the B2C model focuses on direct sales to consumers.

    2. Internal Sales Dynamics: It appears that more than 50% of the inventory is sold to their own B2C companies. This strategy can be leveraged to maximize profit margins due to the control over pricing. However, it may also raise concerns about the transparency and fairness of such transactions, especially if the company is planning to be listed.

    3. Transfer Pricing Risks: The risk highlighted is that the B2B entity might sell goods to the B2C company at inflated prices. This practice, known as transfer pricing, can lead to higher reported margins for the B2B entity. While this might be advantageous for the B2B’s financial performance on paper, it could negatively impact the B2C entity, especially if it results in an unsustainable business model for the B2C operations.

    4. Margin Squeeze on B2C: The B2C companies are noted to have a low EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) margin of around 3-4%, which could be indicative of competitive pricing strategies, high operational costs, or the effects of the transfer pricing issue mentioned above. In a market where B2C companies typically rely on volume sales with tight margins, such low profitability could raise concerns about long-term viability.

    Another Risk, the Group companies also have same Brand Name “Rockingdeals”

    The company preparing for its IPO is a B2B player…

    with sales of INR 15 crores in FY23…

    out of which it is selling goods worth INR 5 crores to a group company that operates in the B2C segment…i.e. Rockingdeals Private Limited and Rockingdeals Private Limited (Hyderabad).

    and products worth INR 3.75 crores to ‘New Jaisa’…

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