Business Profile of Studds Accessories Limited
Studds Accessories is world’s largest two-wheeler helmet producer which incorporated in 1975 and established in 1983. For using the best technology, company owns the only laboratory in India who is certified from European Safety Agency. The design, manufactures, sell and market helmets under the “Studds” brand and in 2016, company launched their premium helmet brand “SMK”. The company has state-of-the-art manufacturing facilities for producing products such as Helmets, Two-wheeler luggage, Rain suits, Helmet security, Eyewear and Riding jackets. The company has four manufacturing facilities in Faridabad. Studds Accessories Limited sells their products in India and exports to over 70 countries, including America, Asia, Europe and other regions.
Objective of Studds Accessories IPO
As per the draft red hearing prospects, the IPO issue consists only offer for sale. The offer for sale issue consists of 7,786,120 shares at the face value of ₨ 5.00 each aggregating up to ₹ XXXX millions. There are only fresh shares issues and main objective of company is enhance our visibility and brand image and provide liquidity and a public market for the Equity Shares in India.
Details of Studds Accessories IPO
| IPO Open Date | N.A. |
| IPO Close Date | N.A. |
| Basis of Allotment | N.A. |
| Listing Date | N.A. |
| Face Value | ₹5.00 per share |
| Price | N.A. |
| Lot Size | N.A. |
| Total Issue Size | Up to 7,786,120 Equity Shares |
| Aggregating up to ₨ xxxx million | |
| Fresh Issue | N.A. |
| N.A. | |
| Offer For Sale | Up to 7,786,120 Equity Shares |
| Aggregating up to ₨ xxxx million | |
| 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 more than 35% of the Net Issue |
| NII (HNI) Shares Offered | Not less than 15% of the Net Issue |
Studds Accessories IPO: Issue Price & Size
The issue price of STUDDS ACCESSORIES LIMITED hasn’t been released yet. Upon releasing the dates, the investors can bid between those price ranges. The company has offer for sale issue aggregating up to ₹ XXXX million at the price of ₨XXXX.
Launch Date of Studds Accessories IPO
The IPO opening date of STUDDS ACCESSORIES LIMITED hasn’t been officially announced yet, upon the declaration of dates investor can bid for IPO.
Financial Statements of Studds Accessories Limited
| Particulars (Rs in millions) | Ended 30th Sept , 2024 | 31st Mar , 2024 |
31st Mar , 2023 |
31st Mar , 2022 |
| Revenue | ||||
| Revenue from Operations | 2,853.11 | 5,290.23 | 4,991.69 | 4,625.07 |
| Other Income | 50.82 | 68.15 | 73.11 | 54.77 |
| Total Income | 2,903.93 | 5,358.38 | 5,064.80 | 4,679.84 |
| EXPENSES | ||||
| Cost of Material Consumed | 1,362.07 | 2,429.80 | 2,589.15 | 2,602.86 |
| Inventories of Finished Goods and Work – in – Progress | (75.55) | (43.98) | 28.34 | (92.50) |
| Employee Benefit Expense | 295.48 | 708.63 | 653.48 | 582.33 |
| Finance Cost | 6.58 | 16.05 | 28.21 | 30.56 |
| Depreciation and Amortisation Expense | 102.38 | 190.28 | 181.01 | 166.32 |
| Other Expenses | 760.99 | 1,293.86 | 1,120.19 | 990.11 |
| Total Expenses | 2,451.95 | 4,594.64 | 4,600.38 | 4,279.68 |
| Restated Profit before Tax | 451.98 | 763.74 | 464.42 | 400.16 |
| Tax Expense : | ||||
| Current Tax | 110.73 | 181.24 | 106.25 | 80.53 |
| Deferred Tax | 8.83 | 10.20 | 21.51 | 26.32 |
| Tax relating to earlier periods | 0.02 | 0.04 | 5.18 | 6.95 |
| Total Tax Expense | 119.58 | 191.48 | 132.94 | 113.80 |
| Restated Profit for the period / year | 332.40 | 572.26 | 331.48 | 286.36 |
Key financial ratios of Studds Accessories Limited
| Particulars | Ended Sept 30 ,2024 | FY 2024 | FY 2023 | FY 2022 |
| Revenue from Operations (Rs in Mn) | 2,853.11 | 5,290.23 | 4,991.69 | 4,625.07 |
| Revenue Growth ( Y – o – Y ) | – | 5.98% | 7.93% | -3.57% |
| EBITDA (Rs in Mn) | 510.12 | 901.92 | 600.52 | 542.27 |
| EBITDA Margin | 17.88 | 17.05 | 12.03 | 11.72 |
| PAT (Rs in Mn) | 332.40 | 572.26 | 331.48 | 286.36 |
| PAT Margin | 11.65 | 10.82 | 6.64 | 6.19 |
| Interest Coverage Ratio | 69.70 | 48.57 | 17.46 | 14.09 |
| ROCE | 10.27 | 18.98 | 12.81 | 11.69 |
| Debt/Equity | -0.0691 | -0.0692 | 0.0199 | 0.0872 |
| Current Ratio | 1.82 | 2.05 | 1.34 | 1.35 |
Promoters & Shareholding Studds Accessories IPO
As of date, according to the DRHP filed with SEBI promoters and promoter group have 78.78% shareholding in company.
| Name of the Shareholder | Number of Shareholders | Number of Equity Shares | Equity Share capital (% ) |
| Promoter & Promoter Group | 6 | 3,10,02,320 | 78.78 |
| Public | 5,436 | 83,51,080 | 21.22 |
| Total | 5,442 | 3,93,53,400 | 100 |
Should You Subscribe To Studds Accessories IPO
While investing or subscribing to any IPO, consider the investment rationales related to the company. Hence, here you can find out the strength of the company that will be its growth factors. And also check the risk factors that can affect the growth and operational efficiency of the company.
Competitive Strengths of Studds Accessories IPO:-
Largest Domestic player
Studds Ltd. is the largest two-wheeler helmet manufacturer in India in terms of revenue in fiscal 2023 and also biggest player in terms of volume in year 2024. The company has nearly five decades of experience in manufacturing and strong market positions in helmet, continuous product development, focus on safety and understanding need of customer enables company to cater the requirements of target customers across premium, mid-range and mass economy segments.
Capital efficient and sustainable business model
Studds Accessories Ltd. has scalable business model which depend on brand recall, distribution network and integrated operation of company. The brand logos are significantly displayed on the company product and each product sold by company enhances their brand visibility & recall, which allows undertaking minimal advertisement expenses. The synergies from company integrated operations help in reducing operating expenses and also enable company to upscale their operations in an efficient and seamless way.
Strong pan-India and global presence
The company has robust global and pan-India presence supported by an extensive and well-developed sales and dealer network & major quality accreditations. Studds Ltd. sell their products mainly through its extensive distributor networks such as EBO’s, OEMs, online retailers, centre stores department , quick commerce platforms, central police canteen and institutional customers.
| Amount (million) | Total sales ( % ) |
Amount (million) | Total sales ( % ) |
Amount (million) | Total sales ( % ) |
Amount (million) | Total sales ( % ) |
|
| Domestic | Ended Sept, 2024 | Fiscal 2024 | Fiscal 2023 | Fiscal 2022 | ||||
| Distributor Network ( EBO ) |
1,721.21 | 58.91 | 3,656.45 | 66.77 | 3300.91 | 64.02 | 2889.48 | 60.75 |
| OEMS ** | 493.94 | 16.91 | 903.41 | 16.50 | 727.86 | 14.12 | 569.45 | 11.97 |
| E – commerce | 126.22 | 4.32 | 59.93 | 1.09 | 96.67 | 1.87 | 53.01 | 1.11 |
| Government channels |
98.28 | 3.36 | 235.41 | 4.30 | 225.70 | 4.38 | 221.79 | 4.66 |
| Others | 39.60 | 1.36 | 89.40 | 1.63 | 125.66 | 2.44 | 49.61 | 1.04 |
| Exports | 442.44 | 15.14 | 531.98 | 9.71 | 678.99 | 13.17 | 972.82 | 20.45 |
| Total | 2,921.69 | 100.00 | 5,476.58 | 100.00 | 5,155.79 | 100.00 | 4,756.16 | 100.00 |
Advanced manufacturing and D&D capabilities
The product design and D&D capabilities, integrated manufacturing processes and stringent quality checks reflect a significant element of the success of business. The D&D team includes 22 designers and 53 other members as on December 31, 2024 is focused on designing and developing advanced technology. Over the period company has invested significantly in design and development to improve their design & product offering and to automate manufacturing process with in-house engineering.
Risk Factors of Studds Accessories IPO:-
Raw material dependency
The company dependent on certain raw material supplier and any interruption to the manufacturing operations of suppliers due to any reason such as strikes lock outs, work stoppages or other forms of labor unrest and breakdown or failure of equipment could affect company ability to receive an adequate supply of quality products at better price. Any inability to manage for alternate sources for raw material may have adverse affect on operation and financial condition.
Under-utilization of resources
As on date, all manufacturing units of company are located in Faridabad, Haryana. The company business is dependent on the ability to effectively manage their manufacturing facilities, which are associated to various risk, some of them are beyond company control such as industrial accidents and severe weather condition and natural disasters. The capacity utilization of company is also affected by product requirement and procurement practice. Under-utilization of manufacturing facilities over long periods could negatively impact business growth.
No Binding Long-Term Ties
The company sells products through a pan-India network of distributors. Studds Ltd. has not entered into long-term agreements with their distributors, and any loss of distributors or interruptions in the timely distribution of company products could have an adverse impact on their business and if company is unable to expand or effectively manage their distribution network, it could adverse effect financial condition and operations.
Regulatory Approvals Key to Business Continuity
To carry out their business company required to obtain and maintain a number of statutory & regulatory permits and approvals from central, state and local government rules. The duration of these approvals are granted for a limited and required renewal. The company cannot assure that such approvals will be issued or granted to company in a timely manner. If company fail to obtain or retain any these approvals or licenses it may negatively affect results of company.
Studds Accessories IPO Grey Market Premium
Grey market premium is the premium quoted over the IPO issue price. GMP shows that investors are ready to pay above the upper band of the IPO issue price. GMP is determined in the grey market as per the demand and supply of the shares in the primary market. A grey market is that unofficial ecosystem of unlisted companies’ stocks that start trading even before the launch of the IPO to the date of its listing.
Also Read: What is Grey Market Premium in IPO: How is GMP Calculated & Reliable
However, GMP is not a reliable factor, as it keeps fluctuating as per the demand and supply of shares in the primary market. There are numerous factors that affect the stock market in India and individual stock prices of different companies that are already listed and trading in the secondary market. However, for an IPO-bounded company, you can consider the GMP as the speculative listing price of the share
According to various online sources, the Grey Market Premium or GMP of the STUDDS ACCESSORIES LIMITED is trading around Rs XX in the grey market. It means shares are trading at the upper band issue price of Rs XX with a premium in the grey market and may list around the same price.
