EPACK Durable, a dominant player in the Indian room air conditioner (RAC) Original Design Manufacturer (ODM) market, is gearing up for its initial public offering (IPO) on January 19th, 2024. This article delves into the details of the IPO, analyzing its financials, market prospects, and potential risks to help you decide whether subscribing is the right move for you.
Company Overview
EPACK Durable boasts a strong presence in the Indian market, with a 77% market share in the ODM segment. They cater to both domestic and international brands, exporting to over 25 countries.
Subscription Details as on 20th Jan
| Investor Category | Subscription (times) | Shares Offered | Shares Bid for | Total Amount (Rs Cr.)* |
| Qualified Institutions | 0.01 | 5,565,670 | 31,980 | 0.74 |
| Non-Institutional Buyers | 0.86 | 4,174,253 | 35,95,865 | 82.70 |
| ย bNII (bids above โน10L) | 0.66 | 2,882,835 | 18,88,380 | 43.43 |
| ย sNII (bids below โน10L) | 1.23 | 1,391,418 | 17,07,485 | 39.27 |
| Retail Investors | 1.27 | 9,739,923 | 1,23,71,580 | 284.55 |
| Employees | [.] | 0 | 0 | 0 |
| Others | [.] | 0 | 0 | 0 |
| Total | 0.82 | 19,479,846 | 1,59,99,425 | 367.99 |
EPACK Durable IPO Details
- IPO date: January 19, 2024 to January 23, 2024
- Issue Type: Book Build
- Issue Size: Rs. 640.05 crore
- Price Band: Rs. 218 โ Rs. 230 per share
- Lot Size: 65 shares
- Issue Period: January 19th โ 23rd, 2024
- Listing Date: January 29th, 2024 (tentative)
- Face value: โน10 per share
- Amount per Lot: โน14950 per lot
Financial Analysis
- Revenue:ย EPACK Durable has witnessed consistent revenue growth over the past three years, with a CAGR of 15%.
- Profitability:ย The company maintains a healthy profit margin of around 10%.
- Debt:ย EPACK Durable has a moderate debt-to-equity ratio of 0.8, indicating manageable financial leverage.
Competitor comparison
EPACK Products
Market Prospect
- Growing Indian RAC market:ย The Indian RAC market is projected to grow at a CAGR of 8% over the next five years, driven by rising disposable incomes and increasing urbanization.
- Export potential:ย EPACK Durableโs established international presence positions them well to capitalize on the global RAC demand.
- ODM advantage:ย The ODM model offers cost-efficiency and flexibility to brands, making EPACK Durable a competitive player in the market.
Investment Highlights
- Consistent Revenue Growth: EPACK Durable has witnessed a CAGR of 15% in revenue growth over the past three years, indicating strong market penetration and expanding clientele.
- Healthy Profitability: The company maintains a 10% profit margin, showcasing operational efficiency and consistent return generation.
- Dominant Market Share: EPACK Durable enjoys a 77% market share in the Indian RAC ODM segment, positioning them as a leader in the industry.
- Growing Market: The Indian RAC market is projected to grow at a CAGR of 8% over the next five years, driven by rising disposable incomes, increasing urbanization, and government initiatives promoting energy-efficient appliances.
- Export Potential: EPACK Durableโs established international presence positions them well to capitalize on the global RAC demand.
Potential Risks
- Seasonality: RAC sales are highly seasonal, with peak demand during summer months. This can lead to quarterly performance fluctuations and impact cash flow management.
- Competition: The RAC market is crowded with established players and new entrants, posing a competitive threat.
- Raw Material Costs: Fluctuations in raw material prices, particularly copper, could impact profitability margins.
- Macroeconomic Factors: A slowdown in the economy or adverse government policies could dampen demand for RACs, impacting EPACK Durableโs revenue generation.
EPACK Durable Grey Market Premium (GMP):
As of January 20th, 2024, the GMP for EPACK Durableโs IPO stands at Rs. 35 per share. This suggests a potential listing price of around Rs. 265 per share, exceeding the upper end of the IPO price band. However, remember that GMP is unofficial and can be volatile.
ย GMP can change rapidly based on investor sentiment and market conditions. Stay updated on the latest GMP trends before making investment decisions
Positive Sentiment:ย The current GMP of Rs. 35 suggests a positive market outlook for EPACK Durableโs IPO.
Investment Decision:
The EPACK Durable IPO offers an opportunity to invest in a dominant player in a growing market with promising growth potential. However, a comprehensive assessment of the potential risks and alignment with your individual investment goals is crucial before making a decision. Consider your risk tolerance, investment horizon, and valuation comfort level before subscribing.
Conclusion:
The EPACK Durable IPO presents a compelling entry point into a promising market with a well-established leader at the helm. However, carefully weigh the potential risks against your personal risk tolerance and investment horizon before making a decision. Conduct thorough due diligence and consult with a financial advisor for personalized guidance if needed.
Disclaimer:
Remember, this article is for informational purposes only and should not be construed as financial advice. Always conduct your own due diligence and consult with a professional before making any investment decisions.
Additional Resources
- EPACK Durable IPO Prospectus:ย https://www.bseindia.com/corporates/download/375702/EPACK%20Durable%20Limited%20-%20DRHP_20230814115446.pdf
- Chittorgarh IPO Analysis:ย https://www.chittorgarh.com/ipo_subscription/epack-durable-ipo/1619/
Please note that the information in this article is current as of January 20th, 2024, and may change over time. Always do your own research and consult with a financial advisor before making any investment decisions.
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