Epack Durable Limited, a Uttar Pradesh-based Original Design Manufacturer (ODM) of room air conditioners (RAC), is set to make its mark with its Initial Public Offering (IPO) hitting Dalal Street on January 19, 2024. This in-depth analysis aims to provide investors with a thorough understanding of Epack Durable, its market presence, financial performance, and the potential implications of its upcoming IPO.
Table of Contents
1. Overview of Epack Durable Limited
Incorporated in 2019, Epack Durable ipo has rapidly ascended to become the second-largest ODM of room air conditioners in India. The company’s diverse portfolio includes sheet metal parts, injection-moulded components, cross-flow fans, and PCBA. Recently, Epack Durable ipo strategically expanded its operations into the small domestic appliance (SDA) market, manufacturing induction cooktops, mixer-grinders, and water dispensers.
1.1 Clientele and Market Presence
Epack Durable ipo has positioned itself as a key player in the industry, serving major entities in both the room air conditioners and small domestic appliances segments. The following table outlines some of its noteworthy clients:
| Room Air Conditioners Segment | Small Domestic Appliances Segment |
| Blue Star | Bajaj Electricals |
| Daikin Airconditioning India | BSH Household Appliances Manufacturing |
| Voltas | Usha International |
| Havells India | |
| Haier Appliances (India) |
This impressive clientele underscores the company’s credibility and market relevance.
2. Financial Performance and Growth Trajectory
A fundamental aspect of evaluating any investment opportunity is the financial health and growth trajectory of the company. Epack Durable ipo has demonstrated robust growth in recent years, as illustrated in the following financial figures:
2.1 Fiscal Year Ended March 2023
| Financial Metric | Amount (in Rs Crore) |
| Net Profit (YoY Growth) | Rs 32 crore (83.4%) |
| Revenue from Operations | Rs 1,539 crore (66.5%) |
| EBITDA | Rs 102.5 crore (49%) |
| EBITDA Margin | 6.66% (vs. 7.44% in FY22) |
The positive growth trajectory is evident, with substantial increases in net profit and revenue.
2.2 Six Months Ended September FY24
| Financial Metric | Amount (in Rs Crore) |
| Net Profit | Rs 2.65 crore |
| Revenue | Rs 614.8 crore |
Despite being a shorter period, the financial figures for the first half of FY24 continue to showcase positive trends.
3. IPO Details and Utilisation of Funds
Understanding the specifics of the IPO is crucial for potential investors. The Epack Durable IPO, scheduled from January 19 to January 23, 2024, consists of a fresh issue of shares worth Rs 400 crore and an offer-for-sale (OFS) of 1.04 crore equity shares by existing shareholders. The following table summarises the IPO details:
| IPO Component | Details |
| Fresh Issue | Rs 400 crore |
| OFS | 1.04 crore equity shares |
| IPO Price Band | Yet to be announced |
| Issue Closing Date | January 23, 2024 |
| Basis of Allotment Date | January 24, 2024 |
| Refund Initiation Date | January 25, 2024 |
| Shares Credited to Demat Date | January 25, 2024 |
| Listing Date | January 29, 2024 (BSE and NSE) |
| Cut-off Time for UPI Confirmation | 5 PM on January 23, 2024 |
The net proceeds from the fresh issue are earmarked for expanding manufacturing facilities (Rs 230 crore), repaying debts (Rs 80 crore), and general corporate purposes.
4. Key Financial Indicators and Ratios
To delve deeper into Epack Durable ipo financial health, we examine key financial indicators and ratios:
4.1 Financial Indicators
| Financial Indicator | Values |
| Return on Equity (ROE) | 14.68% |
| Return on Capital Employed (ROCE) | 9.20% |
| Debt/Equity Ratio | 1.58 |
| Return on Net Worth (RoNW) | 14.68% |
| Earnings Per Share (EPS) | Rs 4.71 (Post IPO) |
4.2 Balance Sheet (as of March 31, 2023)
| Balance Sheet Metric | Amount (in Rs Crore) |
| Assets | Rs 1,464.16 crore |
| Net Worth | Rs 478.31 crore |
| Total Borrowing | Rs 492.45 crore |
| Reserves and Surplus | – |
These indicators collectively present a positive financial picture, with healthy returns and a manageable debt-equity ratio.
5. IPO Reservation and Shareholding Pattern
Understanding the allocation of shares and the existing shareholding pattern is crucial for potential investors. The IPO reservation details and pre/post-issue shareholding pattern for Epack Durable ipo are as follows:
5.1 IPO Reservation
| Investor Category | Shares Offered |
| QIB | Not to exceed fifty percent of the net offer |
| Retail | Not less than 35.00% of the Offer |
| NII (HNI) | Not less than 15.00% of the Offer |
5.2 Shareholding Pattern (Pre/Post Issue)
| Shareholder Category | Pre-Issue (%) | Post-Issue (%) |
| Promoters | 85.49 | 65.36 |
| Public | 14.51 | 34.64 |
Promoters, including Bajrang Bothra, Laxmi Pat Bothra, Sanjay Singhania, and Ajay DD Singhania, currently hold 85.49% of the shares. Post-issue, their shareholding will reduce to 65.36%, with the public holding 34.64%.
6. EPACK Durable Limited Ipo: Company and Operations Overview
6.1 Production Facilities
Epack Durable operates four production facilities in Dehradun, namely Dehradun Unit I, Dehradun Unit II, Dehradun Unit III, and Dehradun Unit IV. Additionally, the company has one manufacturing facility at Bhiwadi, Rajasthan.
6.2 Annual Production Capacity (as of March 31, 2023)
| Product Category | Annual Production Capacity |
| Room Air Conditioners (IDUs, ODUs, ODU kits, WACs) | 0.42 million WACs, 0.90 million IDUs, 0.66 million ODUs, and 0.36 million ODU kits |
| Small Domestic Appliances (Water Dispensers, Induction Hobs, Mixers) | 0.11 million water dispensers, 1.2 million induction hobs, 0.30 million mixers and components |
6.3 Workforce and Human Capital
As of March 31, 2023, Epack Durable boasted a workforce of 734 full-time employees, including engineers, university graduates, and diploma students.
7. Conclusion: A Promising Venture
In conclusion, Epack Durable ipo emerges as a formidable player in the ODM segment, showcasing a diverse product portfolio, a stellar clientele, and a robust growth trajectory. The IPO offers investors an opportunity to be part of the company’s journey, with funds earmarked for strategic expansions and debt reduction. As the IPO dates approach, market observers and potential investors will closely monitor Epack Durable performance on Dalal Street, anticipating a positive reception based on its solid fundamentals.
This comprehensive analysis aims to empower investors with the insights needed to make informed decisions regarding the Epack Durable IPO, navigating the intricate landscape of financial markets.
8. Risks and Challenges
While the prospects of the Epack Durable IPO seem promising, it’s crucial to acknowledge the potential risks and challenges that the company may face. Prospective IPO participants ought to carefully consider the risks associated with doing so.
8.1 Market Competition
The industry in which Epack Durable operates is highly competitive, with several established players vying for market share. Any intensification of competition or a shift in consumer preferences could impact the company’s market standing and profitability.
8.2 Economic Factors
Economic uncertainties and fluctuations can significantly impact the demand for consumer goods, including room air conditioners and small domestic appliances. A downturn in the economy or unforeseen economic challenges could affect Epack Durables sales and revenue.
8.3 Supply Chain Disruptions
Given the globalised nature of supply chains, any disruptions in the procurement of raw materials or components, especially in light of geopolitical events or pandemics, could adversely affect Epack Durable’s production capabilities.
8.4 Regulatory Environment
Changes in regulatory frameworks, environmental norms, or trade policies can impact manufacturing processes and costs. Staying abreast of and adapting to evolving regulations is essential for sustained success.
8.5 Technological Changes
Rapid technological advancements in the industry could render existing products obsolete or necessitate substantial investments in research and development. Failure to adapt to technological changes may affect Epack Durable competitiveness.
9. Investor Considerations
9.1 Strengths and Opportunities
While acknowledging the risks, potential investors should also consider Epack Durable ipo strengths and the opportunities it presents:
- Diversified Product Portfolio: Epack Durable foray into small domestic appliances diversifies its product offering, potentially tapping into new markets and consumer segments.
- Positive Financial Indicators: The company’s robust financial indicators, including healthy ROE and ROCE, indicate sound financial management.
- Strategic Expansion: Utilisation of IPO proceeds for expanding manufacturing facilities aligns with the company’s growth strategy.
9.2 Conducting Due Diligence
Before making an investment, investors are advised to perform extensive due diligence:
- Financial Statements: Scrutinise audited financial statements, examining revenue streams, profitability, and debt obligations.
- Management Team: Assess the experience and track record of the management team, understanding their ability to navigate challenges and capitalise on opportunities.
- Industry Research: Gain insights into the industry, market trends, and competitive landscape to make informed investment decisions.
10. Final Thoughts on Epack Durable Ipo
As the Epack Durable IPO approaches, the investment community eagerly anticipates its debut on Dalal Street. The company’s expansion into the IPO market signifies a new chapter in its growth story. With thorough information at their disposal, investors can make well-informed choices that fit their risk tolerance and financial objectives.
Epack Durable Limited’s journey from an ODM of room air conditioners to a diversified player in the small domestic appliances market reflects its adaptability and strategic vision. How well the IPO goes will depend on the company’s capacity to overcome future challenges and seize fresh opportunities in a market that is changing rapidly.
In the coming weeks, market analysts and investors will closely observe the IPO subscription trends, seeking indications of market sentiment and confidence in Epack Durable ipo potential. As the listing date approaches, the company’s stock performance will be under the spotlight, offering insights into its reception within the investment community.
In conclusion, the Epack Durable IPO presents a compelling opportunity for investors seeking exposure to the dynamic consumer goods sector. By carefully weighing the risks and conducting thorough due diligence, investors can make decisions aligned with their investment objectives. The journey of Epack Durable Limited in the public markets is poised to be a captivating saga, and the investment community is poised to witness the unfolding chapters in the weeks to come.
Disclaimer: The information in this “Stock Profile” blog post is for informational purposes only. It is not financial advice. Always consult a qualified expert before making investment decisions.
