Electronics Mart India IPO Date -Price GMP, Details 2022-23

Stock markets have been very volatile this year. However, this has not deterred many companies from coming up with the IPOs, the latest among them being consumer durables retail chain Electronics Mart India Ltd. The company will be making its shares public through a Rs. 500 crores initial public offering (IPO). The issue will be open for subscription on October 4, 2022, and close on October 7, 2022, with a price band of Rs. 56-59 per share. 

The company currently enjoys the 4th position in market leadership within the consumer durables and electronics space in India.

Let’s have a detailed look at this IPO and review some of the pros and cons of investing in it.

IPO details – Electronics Mart India Ltd

Here are the top details of the IPO that investors should know about:

• IPO dates: Oct 4 – Oct 7, 2022,
• IPO price band: Rs. 56 – Rs. 59
• Bid lot: 254 shares and multiples of similar quantity
• Issue size: Rs. 500 crores 
• Offer for sale – NIL
• Reservation:
  • QIB – 50%, 
  • Retail – 35%, 
  • NII – 15%
• Minimum investment amount: Rs. 14,224 – Rs. 14,986 per lot

Read more: How is the IPO allotment done?

Grey Market Premium for Electronics Mart India

As per grey market data, the shares of Electronics Mart India have already started commanding a premium of Rs. 25 per share.

Read more : What is grey market? How does trading happen in grey market?

About Electronics Mart India Ltd

As Covid-19 impact is seen to be fading away, people are gearing up for the festive season with surging demand in products such as clothing and electronics. This year, the consumer durable industry is expecting festive season sales to cover for the lost 2 years. Electronics Mart India is therefore timing its entry into the bourses very well.

Apart from being the 4th largest consumer electronics and durable retailer in India, the company is also the largest player in revenue terms as it commands a dominant market position in Andhra Pradesh and Telangana.

The company offers a vast range of products such as air conditioners, televisions, smartphones, washing machines, etc. These products are sold through 112 stores spread across 36 cities in India. The company operates these stores under brand names such as Bajaj Electronics, Kitchen Stories, Electronics Mart, and Audio & Beyond. 

The company has built a strong market presence over three decades and with the funds gathered through the IPO, it is aiming to expand its store and warehouse network. Apart from this, the IPO proceeds will also be used to clear debt and fund working capital needs.

Here are some of the other facts that investors should know about this company:

• The company was founded by Pavan Kumar Bajaj and Karan Bajaj as a proprietary company in 1980.
• The company has divided its business activities across 3 main channels including, retail, wholesale and e-commerce.

Company financials 

Investors can refer the table below for a quick glance at the company’s financial performance:

	Mar-22	Mar-21	Mar-20
Total Assets (Cr.)	₹ 1,825	₹ 1,523	₹ 1,348
Operating Revenue (Cr.)	₹ 4,349	₹ 3,202	₹ 3,172
PAT (Cr.)	₹ 105	₹ 59	₹ 81
Basic EPS	₹ 3.46	₹ 1.95	₹ 2.72
Diluted EPS	₹ 3.46	₹ 1.95	₹ 2.72
RONW	17.42%	11.92%	18.84%

Company strengths 

Some of the company’s strengths are:

• The company has tie-ups with over 70 electronic brands and sells them through over 6,000 stock keeping units (SKUs).
• From a store network of only 59 stores in 2019, it has managed to expand to 112 stores in 2022.
• The company targets densely populated neighbourhoods for its store locations.
• The company has maintained a strong cash flow, which it has further invested into business expansion.
• It operates 7 large-sized warehouses covering, on average, an area of 28,114 sq ft.
• It has been consistently paying its suppliers within agreed timelines which has allowed it to enjoy supplier discounts.
• The company’s business model is designed to allow operational flexibility for a long-term sustainable footprint.
• The company’s strong management and powerful brand name of Bajaj also work in its favour.

Company weaknesses

Investors must take note of the below-mentioned drawbacks about the company:

1. The company tends to adopt a cluster-based approach while opening new stores. This leads to concentration in certain geographies.
2. The company has a high inventory obsolescence risk.
3. The business approach requires significant working capital to carry out operations smoothly.
4. The company has not attained a significant presence online and faces stiff competition in its e-commerce space.

Risks involved in Electronics Mart India Ltd IPO

Here are some of the top risks surrounding this company:

1. Company has a dependency on supplies for its products. Therefore, delays and disruptions in its supply can adversely impact business operations.
2. The company derives the majority of its revenues from a few brands. Thus, with any drop in the volume of these brands, the company’s profitability can be directly impacted.
3. The industry can easily have new entrants and give rise to competition.
4. With expansion in new areas, the company may have to face losses in certain areas of investment.

Should you apply for Electronics Mart India IPO?

Electronics Mart India Ltd has shown positive performance even during the Covid-19 period and managed to open new stores during this phase. This reflects the financial strength of the company. Investors can therefore look forward to this IPO and take an investment decision basis the factors mentioned above. 

How do you apply for the IPO?

Head over to the Fisdom App to apply for the IPO.

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