Electronics Mart IPO Review – Should you invest or avoid?
Hyderabad based Electronics Mart India Limited is coming up with an IPO, which would open for subscription on 4th October, 2022. Electronics Mart India Limited is the fourth largest consumer durable and electronics retailer in India. Company generated strong revenue growth in the last 3 years. Should you invest in Electronics Mart IPO? What is Electronics Mart IPO GMP today? In this article we would provide Electronics Mart India IPO Review with detailed analysis.
Also Read: Which Mutual Fund generated highest SIP returns in 5 years?
About Electronics Mart India Limited
Company is the 4th largest consumer durable and electronics retailer in India. It is one of the largest players in the southern region in the states of Telangana and Andhra Pradesh.
Company offers a diversified range of products with a focus on large appliances (such as air conditioners, televisions, washing machines and refrigerators), mobiles and small appliances, IT and others. Its offering includes more than 6,000 SKUs across product companies from more than 70 consumable durable and electronic brands.
Its business model is a mix of ownership and lease rental model.
Under the ownership model, they own the underlying property, including the land and buildings and in lease model, they enter into a long term lease arrangement with the property owner.
As of Aug 2022 end, there are total 99 stores they operate, 8 stores they own and 85 stores are under lease rent model and 6 stores under partly owned and partly leased.
Company operates its business in 3 channels i.e. Retail, Wholesale and e-commerce.
Electronics Mart India IPO Details – Dates, Issue details, Size and Price Band
Here are the issue details.
|IPO Opening Date||04-Oct-22|
|IPO Closing Date||07-Oct-22|
|Issue Type||Book Built Issue IPO|
|Face Value||Rs 10 per equity share|
|IPO Price band||Rs 56 to Rs 59 per equity share|
|Lot Size||254 Shares|
|Min Order Quantity||254 Shares|
|Listing at||BSE and NSE|
|Total Issue Size (Fresh issue)||Rs. 500 Crores|
Electronics Mart India Limited RHP
Competitive strengths of Electronics Mart India
1) Company is 4th largest consumer durable and electronics retailer in India with leadership position in South India.
2) Company has a long standing relationship with leading consumer brands which enables them to procure products at competitive rates
3) It is one of the fastest growing consumers durable and electronics retail with a consistent track record
4) Company is increasing market presence and geographic reach with cluster-based expansion.
5) Its business model provides operational flexibility to create a long term sustainable footprint.
6) It has diversified product offering & an optimal product assortment leveraging its deep knowledge and understanding of regional markets
7) Company has strategically located logistics and warehousing facilities backed by stringent inventory management using IT systems
8) Company has robust customer service support, timely delivery & installation support
9) It has experienced management team with a proven track record
What are the Objects of the IPO Offer?
Electronics Mart IPO Size is Rs 500 Crores which is only for fresh issue.
The fresh proceeds of the offer would be used for the following:
(a) Funding of capital expenditure for expansion and opening of stores and warehouses.
(b) Funding incremental working capital requirements.
(c) Repayment / prepayment, in full or part, of all or certain borrowings availed by the company.
(d) General corporate purposes.
Who are the promoters of Electronics Mart India?
Pavan Kumar Bajaj and Karan Baja are the promoters of the company.
How is the company financial track record?
Here are the total assets, revenues and profits of the company in the last 3 years.
|Financial Year ending / Period ending (Amt in Crores)|
|Profit After Tax||77.1||81.6||58.6||103.9|
Key Performance Indicators of Electronics Mart India Limited
A) Operational Performance Indicators
B) Financial Performance Indicators
Positive Factors in Electronics Mart IPO
Here are the key reasons to invest in this IPO.
1) Electronics Mart India Limited is the 4th largest consumer durable and electronics retailer in India with leadership position in South India.
2) Company is one of the fastest growing consumers durable and electronics retail with a consistent track record. We could see that its footfall has been increasing year on year.
3) Company has generated strong revenue growth in the last 3 years. Its revenues grew from Rs 2,826 Crores in FY19 to Rs 4,353 Crores in FY22.
4) Good margin growth in the last 3 years. Its margins grew from Rs 77.1 Crores in FY19 to Rs 103.9 Crores in FY22
Risk or Negative Factors in Electronics Mart IPO
1) Majority of the company stores concentration is in Andhra Pradesh and Telangana. It currently plans to expand in other regions too, however such investments may or may not be successful.
2) Company operates in a competitive industry and its market share can adversely impact in case their focus on the latest consumer trends and technology.
3) There is stiff competition from online retailers like Amazon or Flipkart or any other offline brands who are offering at lower prices and it can impact company business.
4) Company operates its business with brands “Bajaj Electronics”, “Electronics Mart”, “EMIL” etc., however they do not own the trademark or logo. Currently Bajaj Electricals has filed a legal proceeding about the company on alleging infringement of its trademark “Bajaj Electricals”. If any 3rd parties or competitors are able to circumvent its protection measure, it can affect the business.
5) Covid pandemic and further lockdown have impacted the company significantly. Any future pandemics are uncertain and can impact in future too.
6) Companies large part of revenue comes from limited number of brands. Any loss of such brands or decrease in the volume from such brands can impact company business.
7) It proposes to use the net proceeds towards opening new stores / warehouse. They are yet to purchase real estate or enter into long-term leasehold arrangements for the new stores and expansion. In case they are unable to open such stores / warehouse in a timely manner, it can impact the revenue targets of the company.
8) Investors should read complete risk factors indicated in the RHP before investing in this IPO.
Electronics Mart IPO Price Valuation
Electronics Mart India IPO price band is Rs 56 to Rs 59 per share.
1) If we consider last 3 years weighted average EPS of Rs 2.84 and the upper price band of Rs 59, P/E works out to 21x.
2) Similarly, if we consider FY2022 EPS of Rs 3.46 and the upper price band of Rs 59, P/E works out to be 17x.
3) Means company is asking the upper band of IPO price of Rs 59 in the P/E ratio of 17x to 21x.
4) As per the RHP, there is only listed peer Aditya Vision trading at P/E of 45.7x.
While one cannot compare with only single listed peer, company P/E Ratio between 17x to 21x is considered to be reasonably priced.
Electronics Mart IPO Dates – Subscription, Allotment and Listing Dates
|Finalization of Allotment||12-Oct-22|
|Initiation of Refunds||13-Oct-22|
|Credit to Demat Account||14-Oct-22|
|IPO Shares Listing Date||17-Oct-22|
How to buy IPO online through Zerodha or Upstox?
You can login to your demat account, visit the IPO section and apply for this IPO during the subscription dates.
You can also apply this IPO on Zerodha. If you do not have Zerodha account, sign-up here and proceed to the next step. You can also apply here to open free demat account with Upstox.
Zerodha customers can apply in this IPO by login into Zerodha Console submitting an IPO application form.
Follow below steps to apply this IPO in Zerodha platform:
1) Visit the Zerodha portal and login to the console.
2) Go to Portfolio and click the IPOs link.
3) Visit ‘Electronics Mart India IPO’ row and click the ‘Bid’ button.
4) Enter your UPI ID, Qty and the Price which you want to bid.
5) Click on ‘Submit’ IPO application form.
6) Visit the UPI App (net banking or BHIM) to approve the mandate.
What is Electronics Mart IPO GMP today?
Electronics Mart India IPO gmp today as per leading experts is in the range of Rs 5-7 per share.
Electronics Mart IPO GMP Chanakya – Rs 7
Electronics Mart GMP IPOBazar – Rs 5 to 7
Electronics Mart India IPO GMP IPOwatch – Nil
Electronics Mart India IPO GMP Investoracademy – Nil
Electronics Mart GMP IPOCentral – Nil
Also Read: Best High Return Mutual Funds to invest in 2022-23
FAQs in Electronics Mart India Limited IPO
What are Electronics Mart IPO dates?
The IPO would open for subscription on 4th October, 2022 and closes on 7th October, 2022.
What is Electronics Mart IPO Price?
The IPO Price band is Rs 56 to Rs 59 per share.
What is Electronics Mart IPO Lot Size?
The IPO Lot size is 254 shares and in multiple of 254 shares each.
What is Electronics Mart IPO premium (GMP) today?
While the shares are not actively trading, as per leading observers, these are trading at a premium (GMP) of Rs 5-7 per share.
Is Bajaj Electronics owned by Electronics Mart India?
Yes, Bajaj Electronics is owned by Electronics Mart India. However, they are yet to register the trademark or logo.
Is Electronics Mart IPO good or bad for investment?
Company has generated strong growth in the last 3 years. The margins are improving year on year. Its issue price is reasonably priced. One can consider these aspects and invest in the IPO.
Electronics Mart IPO Review – Should you buy or not?
Once you have read the Electronics Mart India IPO details, you might be wondering whether should you invest or not.
Electronics Mart India Limited is fourth largest consumer durable and electronics retailer in India.
Company generated strong revenue growth in the last 3 years.
It had good profit growth in the last 3 years.
Electronics Mart IPO Price is also reasonably priced.
Considering all these positive factors and negative factors indicated above, investors can invest in this IPO for medium to long term perspective. Since stock markets are correcting now, investors may or may not get listing gains.
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