EPAC Durables Ltd, a leading original design manufacturer (ODM) of air conditioners and other home appliances, is launching its much-anticipated IPO this week on Friday, January 20th.
The public issue will give investors an opportunity to own shares in one of the fastest growing appliance makers in India. Here are all the key details about the IPO that investors need to know:
IPO Date, Price Band and Lot Size
- The initial public offering (IPO) of EPAC Durables will open on January 20, 2023, which is this Friday.
- The price band of the IPO is fixed at Rs 218 to Rs 230 per equity share.
- The shares are being offered in lots of 65. This means investors need to bid for a minimum of 65 shares and in multiples thereafter.
IPO Size and Share Reservation
- The EPAC Durables IPO is an offer for sale (OFS) of Rs 640.05 crore.
- The public issue comprises a fresh issue of shares worth Rs 400 crore and an OFS of Rs 1.3 crore by promoters and investors.
- A total of 65 shares are being offered through the IPO.
IPO Share Allotment and Listing Dates
- The IPO subscription will be open from January 20 to January 23, 2023.
- Anchor investors can bid for shares on January 18.
- IPO share allotment is likely to be finalized on January 24, 2023.
- Ineligible investors will receive refunds by January 25.
- Equity shares will be credited to DEMAT accounts of eligible investors on January 25.
- EPAC Durables will list on BSE and NSE on January 29, 2023.
IPO Reservations for Investors
- 50% of the IPO is reserved for qualified institutional buyers (QIBs)
- 15% of the shares are allocated to non-institutional investors (NIIs)
- 35% of the issue is reserved for retail individual investors
IPO Objective and Use of Proceeds
- The objective of the EPAC Durables IPO is to raise Rs 400 crore through fresh issue of shares.
- The company plans to utilize the IPO proceeds for funding its capacity expansion plans, repayment of debts, and general corporate expenses.
About EPAC Durables Ltd
EPAC Durables Ltd is one of the leading original design manufacturers (ODMs) of air conditioners in India. The company has manufacturing facilities in Dehradun and Bhiwadi. Some key highlights:
- Founded in 2002, EPAC is one of the oldest ODMs in India with over 20 years of operating history.
- The company manufactures room air conditioners for top brands including Voltas, LG, Carrier Midea, Haier, etc.
- EPAC Durables has an annual production capacity of over 1.2 million room ACs.
- It is the 2nd largest ODM player in India’s room AC market with 16.5% market share in FY22.
- The company has posted strong growth in recent years – revenue grew at 24% CAGR from FY20 to FY22.
- EPAC also manufactures small home appliances like mixer-grinders, air coolers, etc.
- Marquee investors like India Advantage Fund and Dynamic India Fund have invested in the company.
Financial Performance
- EPAC Durables has an asset-light business model and operates at high capacity utilization levels.
- The company has reported strong revenue growth in recent years:
- FY22 Revenue – Rs 1,798 crore
- FY21 Revenue – Rs 1,271 crore
- FY20 Revenue – Rs 1,014 crore
- EBIDTA margins have remained healthy in the range of 10-12% over last 3 years.
- The company has a consistent track record of profits and dividends.
Peer Comparison
EPAC Durables is ahead of listed peers like Amber Enterprises and Dixon Technologies in terms of profitability margins:
- EPAC Durables EBIDTA Margin – 11%
- Amber Enterprises EBIDTA Margin – 8.7%
- Dixon Technologies EBIDTA Margin – 6.3%
EPAC also has higher return on capital employed compared to Amber and Dixon.
Grey Market Premium
- The grey market premium for EPAC Durables IPO currently stands at zero.
- This indicates the IPO may list around its issue price.
- However, the company’s financials and growth prospects remain strong.