Introduction:
After a stellar 2023, the Indian IPO market continues to be a hotbed in 2024 as well. Epack Durable Limited, an original design manufacturer of room air conditioners, plans to debut on the secondary markets through an Initial Public Offering (IPO), which will open for public subscription on 19 January and closes on 23 January. The IPO will comprise a fresh issue of up to Rs. 400 crores and an offer for sale of 10,437,047 equity shares.
Continue reading to learn more about the Epack Durable IPO, including lot size, price band, face value, listing date, and more.
About Epack Durable Limited
Epack Durable Limited is a Uttar Pradesh-based Original Design Manufacturer (ODM) of Room Air Conditioners (RACs). The company also manufactures various components used in RACs, including sheet metals, injection-moulded parts, cross-flow fans, and Printed Circuit Board Assembly (PCBA). Recently, the company has ventured into the Small Domestic Appliances (SDA) market by designing and developing products such as induction cooktops, blenders, mixer grinders, and water dispensers.
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As of September 2023, Epack Durable Limited had four manufacturing facilities in Dehradun, Uttarakhand, and one in Bhiwandi, Rajasthan. Some marquee clients of the company include Blue Star Limited, Daikin Airconditioning India Pvt. Ltd., Voltas, Havells, Carrier, Godrej, Infinity, Bajaj Electrical, Usha International, and Haier Appliances, among others.
Key Strengths of Epack Durable Limited
Analysing the key strengths of the issuing company can give you insights into its potential growth prospects. Below are the primary strengths of Epack Durable Ltd. as highlighted in the company’s Red Herring Prospectus (RHP):
- The company is among the leading players in the rapidly expanding RAC and SDA markets
- It enjoys well-established relationships with its marquee clients
- Known for its strong product development and design optimisation capabilities
- A well-diversified product portfolio that can capture a broad spectrum of RAC and SDA markets
- The company had a market share of 29% in terms of volume for the financial year 2023
Key Risks and Weaknesses Highlighted
A company’s key risks and weaknesses can give you insights into the factors that can deter its sustained growth. Below are the primary risks or weaknesses associated with Epack Durable Limited:
- A significant portion of the revenue (83%) comes from the top five clients
- The company operates in a highly competitive and technical industry
- Obtaining clearances from technical and quality-adherence teams can be a challenge
- The Government licensing is subject to the fulfilment of labour, environmental, health, and safety regulations
- High working capital requirements
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Core Financials of the Company
You must analyse the issuing company’s financials before investing in its IPO. The financials of Epack Durable Limited paint a promising picture, with the company’s net worth growing consistently from Rs. 69 crores in FY21 to Rs. 314 crores in FY23. The revenue from operations also doubled from Rs. 736 crores to Rs. 1539 crores within the same period. The profit after tax (PAT) grew four times from Rs. 8 crores to Rs. 32 crores.
Refer to the table below for detailed financials of the company for the last three years:
*Amount in Crores
Source – RHP dates 12 January 2024 on the SEBI website
Details of the IPO
As mentioned, Epack Durable IPO will comprise a fresh issue of up to Rs. 400 crores and an offer for sale of 10,437,047 equity shares. It opens for public subscription on Friday, 19 January 2024 and closes on Tuesday, 23 January 2024. From the capital raised, the issuing company plans to:
- Meet working capital requirements for expansion/setting up of manufacturing facilities
- Repay outstanding debts
- Fulfil general corporate purposes
The table below illustrates crucial details of the Epack Durable IPO:
To conclude
Epack Durable IPO will be the third public issue this year after Jyoti CNC Automation and Medi Assist Healthcare Services. You must evaluate the company’s financials, growth prospects, and IPO valuation before making a final investment decision. Should you need a Demat account to invest in IPOs, you can get it for free with Motilal Oswal.
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