Electronics Mart India Limited (EMIL) is set to start its IPO process between October 4 and October 7, 2022, to raise about Rs 500 crore. Here's more about the IPO, the company, what the risks are and what experts believe.
First, the important details about EMIL's IPO:
Second, the IPO's important dates:
What does Electronics Mart India do? Electronics Mart India Limited (EMIL) is the 4th largest and one of India's fastest growing consumer durable and electronics retailers in India. EMIL has more than 6,000 SKUs (stock keeping units) across product categories and hosts more than 70 consumer durable and electronic brands.
It is one of south India's largest electronic retail store chains (in the organised sector) in terms of revenues and is dominant in Telangana and Andhra Pradesh where it runs about 89 multi-brand outlets under the brand name “Bajaj Electronics”. It also runs about 8 outlets in the NCR region under the brand name ''Electronics Mart''. EMIL's products range from:
Apart from retail stores, EMIL also deals in its products via the wholesale and e-commerce markets.
Why does EMIL need an IPO? EMIL plans to use the IPO proceeds towards:
So, it looks like EMIL plans to expand its reach across select geographies, deepen its footprint in existing markets, and enhance its sales volumes. It also plans to indulge in technology-led effective inventory management and improve operating efficiencies.
The company's financial health: (Rs in crores)
Period | Revenues | Profits after Tax | Total Assets | Borrowings |
Upto June 30, 2022 | 1410.25 | 40.66 | 1755.58 | 475.91 |
March 31, 2022 | 4353.07 | 103.89 | 1824.74 | 593.64 |
March 31, 2021 | 3207.37 | 58.62 | 1523.53 | 547.95 |
March 31, 2020 | 3179.02 | 81.61 | 1347.6 | 520.54 |
So what do experts say:
Subscribe: Nirmal Bang Research, Choice Broking, Canara Bank Securities, Angel One
Neutral: Religare Broking
Not rated yet: JM Financial, Axis Capital
Why experts are saying yes to this IPO:
1. As per Nirmal Bang, EMIL enjoys favourable terms of pricing/margins from brands due to its scale.
2. Its revenues have grown by 26% between FY15-20 and the return on equity (ROE) has been 17.4% during FY22.
3. EMIL is being offered at attractive valuations at a PE of 21.8 times. and EV/EBITDA of 9.7 times.
4. The organised market share expanded from around 40% in FY 13 to 58-60% in FY 20. The share of the organised market is likely to expand to 70-75% by FY 27.
But what are the worrying points?
So will you subscribe to EMIL's IPO?