 "EPACK Durable lists at 4% discount to issue price on NSE")
EPACK Durable made a weak stock market debut, with shares of the company listed at Rs 221, a 4 per cent discount when compared with its issue price of Rs 230 per share on the National Stock Exchange (NSE) on Tuesday. On the BSE, the stock of household appliances started trade at Rs 225.
Post listing, the stock price of EPACK Durable fell to Rs 211.20, almost 8 per cent lower as against the issue price on the NSE. At 10:03 AM; it was trading at around Rs 222.55 on the NSE and BSE. A combined 5.3 million equity shares changed hands on both the exchanges.
The Rs 640 crore IPO was subscribed 16.79 times. High net-worth individuals (HNIs) remained at the forefront, buying 29.07 times the allotted quota. The part reserved for qualified institutional buyers was subscribed 25.6 times, while retail investor’s portion was subscribed 6.5 times.
EPACK Durable is India's second-largest Original Design Manufacturer (ODM) of room air conditioners (RAC). The company also manufactures components such as sheet metal parts, injection moulded parts, cross-flow fans, and PCBA components that are actively used in the production of RACs. The company has expanded its business into the small domestic appliance (SDA) market, particularly given the seasonal demand for RACs, and is currently developing and producing induction hobs, blenders, and water dispensers.
EPACK Durable boasts long-standing relationships with top customers; leverages advanced vertically integrated manufacturing and possesses robust product development capabilities. EPACK Durable prioritizes continuous product portfolio expansion. And its consistent financial performance demonstrates operational efficiency and growth potential, Swastika Investmart had said in its IPO note.
However, some key risks warrant consideration. The company's dependence on a limited number of major customers. Additionally, the RAC industry is highly competitive, and the business experiences seasonal fluctuations, the brokerage firm said.
According to analysts at InCred Equities the Indian RAC industry is likely to post ~12 per cent CAGR in volume terms & ~15 per cent CAGR in value terms over FY23-FY28F. Moreover, the Indian government has banned the import of completely built units of ACs with refrigerants since FY21.
The revenue contribution from the company’s top five clients increased from 71 per cent to FY21 to 77 per cent in FY22 and to 83 per cent in FY23. EPACK Durable’s customers include four of the top six RAC brands in the Indian market. Despite assuming strong growth in 2HFY24F and a profit after tax (PAT) of Rs 32 crore (Rs 2.7 crore in 1H) the brokerage firm feel the stock’s valuation is expensive compared to PG Electroplast or PGEL’s 45xFY24F EPS.
Post listing, the stock price of EPACK Durable fell to Rs 211.20, almost 8 per cent lower as against the issue price on the NSE. At 10:03 AM; it was trading at around Rs 222.55 on the NSE and BSE. A combined 5.3 million equity shares changed hands on both the exchanges.
The Rs 640 crore IPO was subscribed 16.79 times. High net-worth individuals (HNIs) remained at the forefront, buying 29.07 times the allotted quota. The part reserved for qualified institutional buyers was subscribed 25.6 times, while retail investor’s portion was subscribed 6.5 times.
EPACK Durable is India's second-largest Original Design Manufacturer (ODM) of room air conditioners (RAC). The company also manufactures components such as sheet metal parts, injection moulded parts, cross-flow fans, and PCBA components that are actively used in the production of RACs. The company has expanded its business into the small domestic appliance (SDA) market, particularly given the seasonal demand for RACs, and is currently developing and producing induction hobs, blenders, and water dispensers.
EPACK Durable boasts long-standing relationships with top customers; leverages advanced vertically integrated manufacturing and possesses robust product development capabilities. EPACK Durable prioritizes continuous product portfolio expansion. And its consistent financial performance demonstrates operational efficiency and growth potential, Swastika Investmart had said in its IPO note.
However, some key risks warrant consideration. The company's dependence on a limited number of major customers. Additionally, the RAC industry is highly competitive, and the business experiences seasonal fluctuations, the brokerage firm said.
According to analysts at InCred Equities the Indian RAC industry is likely to post ~12 per cent CAGR in volume terms & ~15 per cent CAGR in value terms over FY23-FY28F. Moreover, the Indian government has banned the import of completely built units of ACs with refrigerants since FY21.
The revenue contribution from the company’s top five clients increased from 71 per cent to FY21 to 77 per cent in FY22 and to 83 per cent in FY23. EPACK Durable’s customers include four of the top six RAC brands in the Indian market. Despite assuming strong growth in 2HFY24F and a profit after tax (PAT) of Rs 32 crore (Rs 2.7 crore in 1H) the brokerage firm feel the stock’s valuation is expensive compared to PG Electroplast or PGEL’s 45xFY24F EPS.