EPACK Durable IPO: Check out 10 key things to know from RHP before investing

EPACK Durable IPO opened for subscription on Friday, January 19, and will now close on Wednesday, January 24. The EPACK Durable IPO dates has been extended by a day as the equity market remained closed on Monday on account of a public holiday in the country celebrating the inauguration of the Ram Temple in the northern city of Ayodhya.

Within a few minutes of the issue opening on day two, EPACK Durable IPO was fully booked. All portions were oversubscribed, with the exception of qualified institutional buyers (QIB). The EPACK Durable IPO subscription status was 77% at the end of day 1.

Also Read: EPACK Durable IPO fully booked on day 2 on strong retail, NII interest; GMP steady

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The EPACK Durable IPO lot size is 65 equity shares and in multiples of 65 equity shares thereafter. EPACK Durable IPO has reserved not more than 50% of the shares in the public issue for qualified institutional buyers (QIB), not less than 15% for non-institutional Institutional Investors (NII), and not less than 35% of the offer is reserved for retail investors.

Also Read: EPACK Durable IPO subscription date extended. GMP, review, apply or not?

EPACK Durable IPO basis of allotment of shares will be finalised on Thursday, January 25, and the company will initiate refunds on Monday, January 29, while the shares will be credited to the demat account of allottees on the same day following refund. EPACK Durable share price is likely to be listed on BSE and NSE on Tuesday, January 30.

EPACK Durable IPO, which is worth ₹640.05 crore, comprises a fresh issue of ₹400 crore, and an offer-for-sale (OFS) of 1.04 crore equity shares by the promoters and other investors.

The company plans to use the net proceeds from the new issue to finance the following goals: financing capital expenditures for the establishment or expansion of manufacturing facilities; repaying and/or prepaying some outstanding company loans, either in full or in part; and general corporate purposes.

The book running lead managers of EPACK Durable IPO are Axis Capital Limited, DAM Capital Advisors Limited, and ICICI Securities Limited, while the registrar is KFin Technologies Limited.

Here are 10 key things from the Red Herring Prospectus (RHP) that investors might want to know before subscribing to the issue.

Also Read: EPACK Durable IPO: Issue subscribed 77% on day 1, retail portion fully booked; GMP rises

EPACK Durable IPO Promoters

The company's promoters are Sanjay Singhania, Ajay DD Singhania, Laxmi Pat Bothra, and Bajrang Bothra.

In all, Bajrang Bothra, Laxmi Pat Bothra, Sanjay Singhania, and Ajay DD Singhania held 33,637,595 Equity Shares as of the RHP date of January 12, which accounts for 42.90% of the company's issued, subscribed, and paid-up equity share capital.

In the OFS, 51.75 lakh shares valued at ₹119 crore, belonging to the promoter group, will be sold by promoters Bajrang Bothra, Laxmi Pat Bothra, Sanjay Singhania, and Ajay DD Singhania, as well as Pinky Ajay Singhania, Preity Singhania, Nikhil Bothra, Nitin Bothra, and Rajjat Kumar Bothra.

EPACK IPO Peers 

The company's listed peers are Amber Enterprises India Ltd (with a P/E of 66.28), PG Electroplast Limited (with a P/E of 67.27), Dixon Technologies (India) Ltd (with a P/E of 139.96), and Elin Electronics Ltd (with a P/E of 24.28), as per RHP. 

Also Read: EPACK Durable IPO opens today: From price band to key dates - here are top 10 things to know

EPACK Durable business

According to the F&S Report, the firm is the second biggest original design manufacturer (ODM) of room air conditioners in India based on the quantity of units (indoor + outdoor) produced through the ODM method in Fiscal 2023.

The business is a customer-focused organisation that places a high value on continuous innovation and efficiency in operations. The firm began its path of growth in 2003, when it was founded as an OEM for RAC brands. With an emphasis on innovation and product development, the business developed into an ODM partner for RACs for its clients.

EPACK Durable industry 

At a CAGR of 10.1%, the size of the Indian consumer durables market increased from Fiscal 2018 to Fiscal 2023. Within the consumer durables market, the firm operates in the room air conditioner (RAC) and small domestic appliance (SDA) industries. According to the F&S Report, the consumer durables market is predicted to reach an estimated total value of ₹1,303 billion by Fiscal 2023 and increase at a compound annual growth rate of 13.7% until Fiscal 2028.

Key market trends of consumer durable industry in India

• Increasing Adoption of Smart Home Appliances
• Surge in Online Sales
• Focus on After-sales Service and Customer Support
• Growing Interest in Health and Wellness Appliances
• Increasing financing options and no-cost EMI schemes

EPACK Durable key customers

In the room air conditioners segment, they key customers list include, Blue Star Limited, Daikin Airconditioning India Private Limited, Carrier Midea India Private Limited, Voltas Limited, Havells India Limited, Haier Appliances (India) Private Limited, Infiniti Retail Limited, and Godrej and Boyce Manufacturing Company Limited, among others. 

Under the small domestic appliances segment, Bajaj Electricals Limited, BSH Household Appliances Manufacturing Private Limited, and Usha International Limited, among others are the key customers. 

EPACK Durable IPO key risks

Some of the key risks are as follows; 

• The clients don't sign long-term contracts with the company and are free to modify or terminate their sourcing needs at any time. The company's cash flows, operating results, and financial situation might all be negatively impacted by such cancellations or modifications.
• The three production facilities of the firm are essential to the business, and they face specific risks associated with the manufacturing process. The business, financial situation, and operational outcomes of the corporation may suffer from any halt or slowdown in its production activities.
• The firm is in a competitive industry, and its inability to successfully compete might have a negative impact on its operations, financial situation, cash flows, and overall business performance.

Also Read: EPACK Durable IPO opens today: 10 key risks from RHP to consider before subscribing to the IPO

EPACK Durable financials

Over the course of the FY21–23 period, the business's revenue, EBITDA, and PAT increased at a CAGR of 44.6%, 56.2%, and 102.5%, respectively.

The company recorded ₹615 crore in revenue and ₹2.6 crore in net profit for the six months that ended in September 2023. The company's revenue from operations in FY23 increased 66% year over year to ₹1,539 crore, while its profit shot up 88% to ₹32 crore.

Lock-in of equity shares allotted to anchor investors

50% of the equity shares allotted to anchor investors under the anchor investor portion shall be locked-in for a period 90 days from the date of allotment and the remaining 50% shall be locked-in for a period of 30 days from the date of allotment, the company said. 

R&D centres and manufacturing facility

The company has four production facilities in Dehradun, two more facilities that are the Bhiwadi production Facility and the Sri City Manufacturing Facility, and specialised R&D centres in Greater Noida, Bhiwadi, and Dehradun.

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