V-Marc India Limited IPO

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V-Marc India Limited is engaged in the manufacturing and marketing of wires and cables under the brand name “V-Marc”. Promoter Vikas Garg commenced business in a partnership firm in 2006 as a manufacturer and distributor of PVC insulated wires and cables and have over the years, evolved, expanded, and diversified to become an established manufacturer of wires and cables with a total income of ₹ 17,164.44 lakhs in Fiscal 2020.

The company manufacture and sell a diverse range of wires and cables and the key products are single & multistrand cables, CCTV cables, LAN cables, coaxial cables, telephone switchboard cables, power cables (LT and HT cables up to 33kv grade), flexible & control cables, core flat cables, solar cables, wires, and aerial bunched cables.

The company sells its products with different channels
i. Securing government tenders for supply to government projects.
ii. Supply to EPC contractors for turnkey projects.
iii. Dealer & distribution network and direct sales to few private companies.

The company supplies products for various industries including power, real estate, telecom, and railways. As of December 31, 2020, it has a dealer network of more than 650 dealers, who are spread over 12 states.

Business Strengths
i. Wide product portfolio with a focus on quality.
ii. Experienced management and dedicated employee base.
iii. Diversified customer base across varied geographies.
iv. Wide distribution network

 

Objects of the V-Marc India Limited IPO:

The company is raising 23.4 Crores from the IPO for the following purpose. (i) Fund required for new manufacturing facility = 15 crores (ii) Working Capital = 5 crores (iii) General Corporate Expense = 3.4 crores
RHP of V-Marc India Limited IPO

V-Marc India Limited IPO Details:

Open Date: Mar 25 2021
Close Date: Mar 31 2021
Total Shares: 6,000,000
Face Value: ₹ 10 Per Equity Share
Issue Size: 23.4 Cr.
Lot Size: 3000 Shares
Issue Price: ₹ 39 Per Equity Share
Listing At: NSE Emerge
Listing Date: Apr 09 2021

Promoters And Management:

i. Mr. Vikas Garg Aged 42 years, has been on the Board of Directors of the Company since incorporation and has been re-appointed as the Chairman and Managing Director of the Company on February 04, 2021. He possesses 20 years of experience in the manufacturing of wires & cables Industry. He looks after the technical operations, strategy, and marketing plans of the Company. ii. Mr. Sandeep Kumar Srivastava Aged 44 years, has been on the Board of Directors since February 01, 2020 and has been re-appointed as the Whole-Time Director of the Company on February 04, 2021. Prior to joining the Company, he was associated with SBI Bank. He possesses over 20 years of experience in Credit Management, Financial Services, and Banking Operations. He is responsible for the financial operations of the Company. iii. Mrs. Meenakshi Garg Aged 39 years, has been associated with the Company since incorporation and has been re-appointed as the Non-ExecutiveDirector of the Company on February 04, 2021. Prior to the acquisition of M/s Asian Wire & Cable Industries, a partnership firm by the Company, she was a partner in the said firm since 2010. iv. Mr. Raj Kumar Pandey Aged 47 years, is an Additional Independent Director of the Company. He is a qualified Company Secretary and member of the Institute of Company Secretaries of India. He has experience of more than a decade in the field of corporate secretarial and legal compliances.

Financials of V-Marc India Limited IPO:

(Fig. in Crores)
Year Revenue EBITDA OPM% PAT NPM% Shares EPS
2018 143 9.88 6.91% 2.23 2% 2.2785 0.98
2019 205 13.78 6.72% 4.88 2% 2.2785 2.14
2020 171 13.45 7.87% 4.74 3% 2.2785 2.08
9MFY21 130 10.57 8.13% 4.01 3% 2.2785 1.76

Comparison With Peers:

Peer Revenue EBITDA OPM% PAT NPM% Shares EPS P/E
V-marc 171 13.45 7.87% 4.74 3% 2.2785 2.08 18.75
Cords Cable 421 42 9.98% 11 3% 1.5 7.33 5.59
Ultracab (India) Limited 65 6.51 10.02% 1.04 2% 1.272 0.818 94

Recommendation on V-Marc India Limited IPO:

Review and Recommendation of InvestorZone are 5/10 1. The valuation are reasonable. 2. Reasonable debt. 3. Good business model. 4. Profitability parameters are reasonable.

Lead Manager of V-Marc India Limited IPO:

  1. Pantomath Capital Advisors Private Limited

Registrar of V-Marc India Limited IPO:

  1. Bigshare Services Private Limited

Company Address:

Plot No. 3, 4, 18, 20A, Sector IIDC, SIDCUL Haridwar, Uttarakhand-249403, India

Discussion on V-Marc India Limited IPO:

8 Comments

    Objects of the Issue:

    To finance capital expenditure to establish proposed manufacturing facility.
    To meet company’s working capital requirements.
    General corporate purposes.

    Reply

    Competitive strengths

    Diversified product portfolio with a wide range of wires and cables.
    Geographically diversified customer base.
    Strong dealer network distribution.
    Experienced and dedicated management.

    Reply

    Profitability Factors:

    1. RONW

    FY18 = 10.1%, FY19= 16.8% and FY20 = 13.9%

    2. ROCE

    FY18 = 47%, FY19= 46% and FY20 = 38%

    Company has excellent RONW and ROCE.

    Reply

    Cash-flow position:

    (i) In the last 3 years (FY18 to FY20), the company has generated Cash flow from operations= 21 Crores.

    (ii) Free-cash generated in the last 3 years is 7 Crores.

    (iii) CFO/EBITDA = 68% ( pretty decent). This figure shows company is able to convert 68% of EBITDA into cash.

    Decent cash-flow position of the company.

    Reply

    Balance Sheet Position ( as on 31.12.2020)

    1. Debt = 47 Crores

    2. Net-worth = 38 Crores

    3. D/E = 1,.23x (reasonable)

    4. Current Ratio = 1.29x ( manageable)

    5. Trade Receivables Days = 117 Days ( on higher side)

    Overall Balance Sheet has no red-flags.

    Reply

    Valuation of the IPO:

    (i) Total shares outstanding = 2.2785 Crores

    (ii) IPO Price = 39

    (iii) Mcap = 88 Crores

    (iv) Mcap/Sales = 1.94x ( anything less than 2 is under-valued)

    (v) P/E = 19x ( reasonable valuation)

    Reply

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