Epack Durable IPO: Company sets price band at Rs 218-230 per share, to raise Rs 640 crore

Epack Durable IPO opens on January 19

Epack Durable, the second largest original design manufacturer of room air conditioners in India, has fixed its price band at Rs 218-230 per share for its maiden public issue on January 16. The fund raising target at the upper price band will be Rs 640 crore.

The IPO, which is a mix of a fresh issue of Rs 400 crore by the company and an offer-for-sale (OFS) of 1.04 crore equity shares by the existing shareholders, will open for subscription on January 19 and close on January 23. The anchor book part of the issue will open for a day on January 18.

This will be the third public issue in the current year after Jyoti CNC Automation and Medi Assist Healthcare Services IPOs, and ahead of Nova Agritech IPO.

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, who are part of the promoter group, will be selling 51.75 lakh shares worth Rs 119 crore in the OFS, at the upper price band.

Also read: Medi Assist Healthcare IPO: Should you subscribe to Rs 1,171.58 crore issue?

Further, 52.62 lakh shares worth Rs 121 crore will also be sold by public shareholders, namely India Advantage Fund S4 I and Dynamic India Fund S4 US I.

Promoters' shareholding in the Uttar Pradesh-based company stands at 65.36 percent and the remaining 34.64 percent shares are held by the public including India Advantage Fund S4 I and Augusta Investments Zero Pte Ltd.

The minimum lot size has been fixed as 65 equity shares. Retail investors can bid for a minimum of 65 equity shares worth Rs 14,950.

Also read: Nova Agritech IPO to open on January 22: Check issue details here

Half of the IPO size has been reserved for qualified institutional buyers (QIBs) and 15 percent for non-institutional investors (i.e. high networth individuals).

Epack Durable, which caters to leading companies like Blue Star, Daikin Airconditioning India, Voltas, Havells India, Haier Appliances (India), Bajaj Electricals, BSH Household Appliances Manufacturing and Usha International, is going to utilise Rs 230 crore of the net fresh issue proceeds for the expansion of manufacturing facilities, and Rs 80 crore for repaying debts. The remaining amount will be used for general corporate purposes going ahead.

Also Read Moneycontrol's Exclusive Note on Medi Assist IPO

The Bothra and Singhania-promoted company recorded healthy financial performance in the past years but there was a pressure on operating margin due to higher input cost. Net profit grew by 83.4 percent year-on-year to Rs 32 crore for the March ending financial year 2022-23, and revenue from operations during the same period increased by 66.5 percent to Rs 1,539 crore.

EBITDA (earnings before interest, tax, depreciation and amortisation) in the last financial year at Rs 102.5 crore increased 49 percent compared to the previous fiscal year. However, the margin dropped 78 bps to 6.66 percent in the same period.