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EPACK Durable IPO Details: Launch Date, Share Price, Size, GMP & Review

EPACK-Durable-IPO-Details-Launch-Date-Share-Price-Size-GMP-&-Review

EPACK Durable – About the Company

Established in Noida in 2019, EPACK Durable Limited is the second-largest original design manufacturer of room air conditioners in India. Based on the growth in production volume between the financial years 2020 and 2023, it is the fastest-growing manufacturer of room air conditioners ("ODM")in India.

In terms of production volume in FY23, with a market share of 23% EPACK Durable is the second-largest ODM manufacturer in the Indian air conditioner market. However, the company has also diversified its business into manufacturing various components such as sheet metal cross-flow fans, injection moulded parts and PCBA components that are actively used in the manufacturing of air conditioners.

Moreover, the company is also utilizing its existing production infrastructure to strategically expand its operation activities in the small household appliance market and is currently developing and producing induction cooktops, grinders and water dispensers and seasonal demand for lighting fixtures.

EPACK Durable has specialised research and development facilities in Greater Noida, Bhiwadi, and Dehradun. These facilities are well-equipped with a range of apparatus, including endurance test laboratories for RACs and SDAs, induction coils that function as automatic voltage testers and breakdown testers, needle flame testers, and customised glow wire testers.

The company has single-site manufacturing capabilities, to produce and manufacture the product assembly take place in one location with the highest degree of backward integration for RACs under a single company/single site that grew organically within the same company in India.

Epack Durable is catering the well-known companies like Blue Star, Voltas, Havells India,Haier Appliances (India), Daikin Air conditioning India, Bajaj Electricals, Usha International and BSH Household Appliances Manufacturing.

EPACK Durable IPO Objectives

EPACK Durable IPO consists of Rs 400 crore fresh issue, hence company is going to utilize the net Proceeds from the Fresh Issue for various purposes. Part of the fund will be utilized to meet the capital expenditure requirement for the expansion/setting up of manufacturing facilities.

A portion of the fund will be also utilized partially or fully for the repayment or prepayment of outstanding loans or borrowings of the company. Some parts of the fund will be also utilized for general corporate purposes.

EPACK Durable IPO Details:

IPO Open Date 19-Jan-24
IPO Close Date 23-Jan-24
Basis of Allotment 24-Jan-24
Listing Date 29-Jan-24
Face Value Rs 10 per share
Price Rs 218 to Rs 230 per share
Lot Size 65 Shares
Total Issue Size Rs 640.05 crore
Fresh Issue Rs 400.00 crore
Offer For Sale 10,437,047 shares
(aggregating up to  Rs 240.05 crore)
Issue Type Book Built Issue IPO
Listing At BSE & NSE
QIB Shares Offered Not more than 50% of the Net Issue
Retail Shares Offered Not less thann 35% of the Net Issue
NII (HNI) Shares Offered Not less than 15% of the Net Issue

 

EPACK Durable IPO Issue Price & Size

The issue price of EPACK Durable IPO is Rs 218 to Rs 230 per share, which means investors can bid between these price bands. The total issue size of EPACK Durable IPO is Rs 640.05 crore, out of which 240.05 crore will be offered for sale and Rs 400 crore will be a fresh issue.

EPACK Durable IPO Launch Date

The launch date of EPACK Durable IPO is 19th Jan 2024, and the last date of EPACK Durable IPO is 23rd Jan 2024. EPACK Durable IPO will be open for bid on 19 Jan, 22 Jan and 23 Jan 2024. The tentative date of the basis of allotment is 24th Jan 2024 and listing is expected on 29th Jan 2024.

EPACK Durable Financial Statements:

Particulars (Rs in Million) FY24 (6M) FY23 FY22 FY21 CAGR
Revenue from Operations 6,148.04 15,388.32 9,241.62 7,362.45 44.57%
Other Income 15.18 14.21 31.79 34.13
Total Income 6,163.22 15,402.53 9,273.41 7,396.58 44.30%
Operational Expenses 5485.39 13574.58 8175.99 6660.84
Other expenses 292.88 788.49 377.60 281.28
EBITDA 369.77 1025.25 688.03 420.33 56.18%
EBITDA Margin% 6.01% 6.66% 7.44% 5.71%
Depreciation 160.67 260.77 162.97 89.90
Interest 178.90 314.60 293.83 255.79
Profit Before Tax 45.38 464.09 263.02 108.77  
Share of profit/(loss) of associate (5.68) (8.12) - -  
Exceptional items - (15.50) - -  
Total tax 13.16 120.75 88.68 30.74
Profit After Tax 26.54 319.72 174.34 78.03 102.42%
PAT Margin% 0.43% 2.08% 1.89% 1.06%  
EPS Diluted (Rs) 0.34 4.64 3.47 1.62  

Source: EPACK Durable DRHP & RHP

EPACK Durable Financial Performance

The revenue of EPACK Durable Limited stood at Rs 614.80 crore in the first six months of the financial year 2024. For the full year FY23, the revenue was Rs 1538.83 crore which has grown at a CAGR of 44.6% from FY21 of Rs 736.25 crore.

The EBITDA of the company for the first half of FY24 stood at Rs 36.98 crore, and for the full year 2023, the EBITDA was Rs 102.5 crore registering a CAGR of 56% from FY21 of Rs 42.03 crore. The EBITDA margins of the company were 5.71% in FY21, and marginally improved and reached at 6.01% in the first half of FY24.

The Net Profit of the company for the first half of FY24 stood at Rs 2.65 crore. The Net Profit of the company has grown at a CAGR of 102.4% from Rs 7.8 crore in FY21 to Rs 31.97 crore in FY23. However, the PAT margin of the company was at 0.43% in the first six months of FY24 which was at 2.08% in FY23 and 1.06% in FY21.

EPACK Durable IPO Promoters & Shareholding of the Company

As per the draft red herring prospectus (DRHP) & RHP Bajrang Bothra, Bajrang Bothra, Sanjay Singhania and Ajay DD Singhania are the main promoters of the company holding 12.32%, 7.0%, 11.79% and 11.79% stakes respectively in the company. In the promoters group, there are around six more members, and all of them including promoters are selling some of their stakes in the company through OFS. For details of the promoters group and other shareholders check the table below.

S.No. Name of the Shareholder No. of Equity
Shares (Pre-Offer)
% of pre-Offer
paid up Equity
Share capital
  Promoters (also the Selling Shareholders):    
1 Bajrang Bothra 96,56,558 12.32%
2 Laxmi Pat Bothra 54,89,437 7.00%
3 Sanjay Singhania 92,45,800 11.79%
4 Ajay DD Singhania 92,45,800 11.79%
  Total (A) 3,36,37,595 42.90%
       
  Promoter Group members (also Promoter Group Selling Shareholders):
5 Pinky Ajay Singhania 35,36,099 4.51%
6 Preity Singhania 35,36,099 4.51%
7 Nikhil Bothra 36,46,231 4.65%
8 Nitin Bothra 36,46,231 4.65%
9 Rajjat Kumar Bothra 31,25,341 3.99%
10 Hridaya Chordia 1,20,888 0.15%
  Total (B) 1,76,10,889 22.46%
 
  Investor Selling Shareholders:
11 India Advantage Fund S4 I 1,45,22,253 18.52%
12 Dynamic India Fund S4 US I 12,62,804 1.61%
  Total (C) 1,57,85,057 20.13%
   
  Grand Total (A+B+C) 6,70,33,541 85.49%

Source: RHP & DRHP

As per the red hearing document, 51.75 lakh shares valued at ₹119 crore will be sold by promoters Bajrang Bothra, Laxmi Pat Bothra, Sanjay Singhania, Ajay DD Singhania, Pinky Ajay Singhania, Preity Singhania, Nikhil Bothra, Nitin Bothra, and Rajjat Kumar Bothra.

Why Invest in EPACK Durable IPO?

To invest in EPACK Durable IPO you must have strong reasons and that is applied to everyone while investing not only in IPO (primary market) but any company listed on the stock market (secondary market). There are various factors you can use to analyse the fundamentals of the company and based on that you can decide whether to invest in the company or not.

Also Read: Why is Fundamental Analysis Important for Investing in Stocks

But right here we brought the competitive strength and risk factors of the EPACK Durable that you can check or analyse. The strength of the company helps to grow its business and revenue in the competitive environment, while the risks are the negative factors that a company can face while running its normal course of business and can affect its revenue growth.

Also Read: What to Check Before Buying IPO: Things to Know & Is it Safe

Competitive Strengths:

  • As per the F&S Report, despite the disruption due to the COVID-19 pandemic the Indian RAC industry has grown at a rate of 8.8% in the last five years (Fiscal 2018 to Fiscal 2023) in terms of volume and at a rate of 11.2% in value terms. Further, the Indian RAC industry is forecasted to grow at a rate of 12.1% by volume and 15.1% by value from Fiscal 2023 till Fiscal 2028. EPACK Durable is the second largest RAC ODM manufacturer in India in terms of number of units (indoor units + outdoor units) manufactured in Fiscal 2023 through the ODM route.
  • Though, EPACK Durable is operating in a competitive environment but still has a market share of 29% in terms of room air conditioner production volume in FY 2023.
  • Moreover, recognizing the opportunity to add value to its customer's company it has also started manufacturing various components such as sheet metal, injection moulded parts, cross-flow fans and PCBA components that are actively used in air conditioner’s manufacturing.
  • To diversify its revenue, the company is utilizing existing production infrastructure and strategically expanding its operations in the small household appliance market and currently developing and producing lighting fixtures, grinders, induction cooktops and water dispensers.
  • Moreover, the company is also benefiting from its manufacturing capabilities with the highest degree of backward integration for RACs under a single company/single site to manufacture the component and assemble at one location helping it to optimize its cost of production.
  • The company has integrated location-focused manufacturing operations, product development and design capabilities, and its focus on quality and cost-efficient manufacturing processes to achieve customer satisfaction, foster customer loyalty and accordingly, generate repeat business.
  • The company has long-standing relationships with established customers such as Blue Star Limited, Daikin Air-conditioning India Private Limited, Carrier Midea India Private Limited, Voltas Limited, Havells India, Limited, Haier Appliances (India) Private Limited and Godrej. The company attributes its growth and expansion of its market share to date to its relationships with the customer base and intends to continue to leverage such relationships for the future growth of the company.
  • Further to expand its existing product portfolio, into RAC and SDA segments. In the RAC Segment Company is looking to produce products beyond room air conditioner products to semi-commercial air conditioner products and domestic air coolers. While in the SDA segment, it will produce products like hair dryers, induction water heaters and nutriblenders, tower fans, kitchen chimneys and dual ICTs. This will help the company to diversify the business reduce the dependence on RAC products and increase revenue from all season SDAsproducts.
  • To improve the supply chain and inventory management and cost efficiencies, the company has also entered into arrangements with its Associates and suppliers for the joint development of BLDC motors for captive consumption towards the manufacture of RACs and other appliances. And company is also looking to reduce dependence on imports which will help it to reduce the manufacturing costs and exposure to foreign currency fluctuations.
  • To enhance the production capacity, the company has planned to construct two new manufacturing facilities at Bhiwadi, Rajasthan and Tirupati District, Andhra Pradesh. These manufacturing units will dedicatedly produce RAC and SDA products, and components thereof.
  • The company is led by a qualified and experienced senior management team with promoters has substantial industry knowledge and extensive managerial experience in this sector, with cumulative work experience of over 100 years. Promoters have a track record and a demonstrated ability to create, build and grow businesses, including EPACK Durable, EPACK Polymers Private Limited and EPACK Prefab Solutions Private Limited.
  • At the financial end, in the last three years company has performed well and registered revenue growth at a CAGR of 44.6% from FY21 to FY23. While owing to marginally improved EBITDA margins, the EBITDA of the company has grown at a CAGR of 56.2%. The PAT of the company for the same period exceptionally grew at a CAGR of 102.4%. However, the PAT margin of the company is quite thin, remaining below 1% not generating enough EPS for the shareholders.

Also Read: What are the Risk Factors Involved in Applying for an IPO

Risks Factors:

  • The business of the company is dependent on its three manufacturing facilities, and it is subject to certain risks in the manufacturing process. Any slowdown or shutdown in the manufacturing operations could have an adverse effect on its business, financial condition and results of operations.
  • The company has not entered into long-term commitments with its customers and may cancel or change its sourcing requirements. Such cancellations or changes may adversely affect the financial condition, cash flows and business operation of the company.
  • The manufacturing and production process of the company is subject to precise technical specifications and quality requirements. Any kind of failure to comply with the quality standards and technical specifications prescribed by its customers may lead to loss of business from such customers or product liability claims or claims alleging deficiency in service, and could negatively impact the reputation, which would have an adverse impact on the business operations of the company.
  • The company is dependent on third parties for the transportation and timely delivery of the raw materials and products. Any failure by the third-party providing the transport service may result the delays and increased costs that may adversely affect its business operations.
  • Owing to operating in a highly competitive environment, and to compete with its rivals, any reduction in prices for its products while maintaining stringent quality standards may lead to a decrease in its margins that may adversely affect its business operations and future prospects.
  • The business of the company is dependent on various factors and its main business is highly concentrated on RACs and vulnerable to variations in demand due to seasonal variations and changes in consumer preferences, which could have an adverse effect on its business operations.
  • As per the red herring documents, a few outstanding legal proceedings are running against the Company, its Directors, Promoters and Subsidiary. Any kind of unfavourable outcomes or legal actions may negatively affect the business operations and its financial condition.

EPACK Durable IPO Grey Market Premium (GMP)

The Grey Market Premium or GMP of the EPACK Durable is currently Rs 0, which means shares are trading at the upper band issue price of Rs 230 with no premium or discount in the grey market. GMP indicates that the price investors are ready to pay more than the issue price.

Also Read: What is Grey Market Premium in IPO: How is GMP Calculated &Reliable

GMP is usually defined as the demand and supply of the shares in the grey market that is determined by the speculators in the grey market. Though, GMP is not a reliable factor in determining the share price of the company, but can give can give an idea of its share price around the price it is expected to trade in the secondary market.

EPACK Durable IPO Review & Analysis

The floor price EPACK Durable IPO is Rs 218 and the cap price is Rs 230 per share. And while considering the earnings per share (EPS) of Rs 4.64 on a diluted basis for FY23 and considering the cap price of Rs 230, the share price is at valued at 49.57 times that fair price, if you compare it to its listed peers.

Its peer group companies like Amber Enterprises India Ltd, PG Electroplast Limited, Dixon Technologies (India) Ltd, and Elin Electronics Ltd are trading at PE of 66.28, 67.27, 139.96 and 24.28 respectively. Hence, you may apply or subscribe to the issue from the medium to long-term investment point of view.

How to Apply for EPACK Durable IPO?

Applying in the EPACK Durable IPO becomes easier and trouble-free if you choose the best discount brokers in India offering the best online trading platforms for investing in the stock market. You just need to open a trading account and demat account with Moneysukh and you can easily apply in the IPO or directly invest in the stock market, commodity market or forex market.

Moneysukh provides the trading and investing facility to buy or trade in equities, commodities and currency markets with the best trading facilities through its online trading platforms and algorithms like Trade Radar, Quantman, AlgoBulls, TradeTronKeev and FoxTrader integrated with the TradingView charting system with updated live feeds of market data. Right now to apply for the EPACK Durable IPO, you can follow the steps given below.

Steps to Apply for EPACK Durable IPO:

Step 1: You can apply in the EPACK Durable IPO between 19th to 23rd Jan 2024.

Step 2: Now navigate the trade.moneysukh.com and log in with your User ID & password.

Step 3:Now just find and navigate to the IPO section and choose the EPACK Durable IPO.

Step 4:Here you need to fill in the various details like price, quantity, and so on.

Note: While applying for any IPO, make sure to bid at the cutoff price and then submit your application. 

Step 5:Now you have to make the payment and then submit your IPO application successfully.

How to Check EPACK Durable IPO Allotment Status?

Checking the EPACK Durable IPO allotment status is useful only after the date of the allotment date, as only after this date you would be able to check the allotment details. As per the various sources, the tentative date of basis of allotment is 24 Jan 2024, and from this date onwards using various online platforms you can check the allotment status of the EPACK Durable IPO.

Also Read: How to check IPO allotment status on NSE, BSE through Moneysukh

The allocation of shares during the allotment is highly dependent on the subscription of the number of applications. And if due to the high demand for equity shares in the market, the IPO is oversubscribed and there is less chance of getting the allotment of shares. However, if you are applying for the IPO through retail or via the HNI category, you can improve your chances of allotment with investing tips.

Also Read: How to Increase the Chances of IPO Allotment

If you don't get any allotment of shares, your IPO application money will be refunded into your bank account or the fund will be unblocked if applied through the ASBA. However, despite being oversubscribed in an IPO, if you get the allotment of shares, then you will get the allotment of shares into the demat account before the listing date and you can book profit if getting the listing gain in the EPACK Durable IPO or can keep the share for the long-term investment point of view.

Also Read: Why You Should Invest in the Stock Market: Reasons  & Benefits

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