Fonebox Retail Limited SME IPO: Check price band, GMP, financials, risks, and listing date

Fonebox Retail Limited SME IPO: The price band for the offer has been fixed at Rs 66-Rs 70 per share.

The Rs 20.37-crore initial public offering (IPO) of Fonebox Retail Limited will open for subscription on January 25. The IPO, entirely a fresh issue, will close on January 30.

Also known as Fonebook, the company is a multi-brand retailer of smartphones and accessories from manufacturers such as Vivo, Apple, Samsung, Oppo, Realme, Nokia, Narzo, Redmi, Motorola, LG, and Micromax.

Here are the key details on the issue

The issue is entirely a fresh issue of 29.1 lakh shares.

The price band for the offer has been fixed at Rs 66-Rs 70 per share.

Investors can bid for a minimum of 2,000 shares and in multiples thereof.

For the year ended March 2023, the company's revenue from operations stood at Rs 195.8 crore, a significant jump of over 100 percent when compared to the same period previous year, when the company reported a revenue of Rs 90.9 crore.

As for the net profit, it profit stood at Rs 2.19 crore for the year ended March 2023, as compared to a profit of Rs 19.2 lakh in the same period of the previous year.

The issue proceeds will be utilised to meet working capital requirements, pay public issue expenses, and the rest will be used for general corporate purposes.

Manishbhai Girishbhai Patel, Jigar Lallubhai Desai, Parth Lallubhai Desai, Jigneshkumar Dashrathlal Parekh, and Amitkumar Gopalbhai Patel are the promoters of the company.

Beeline Capital Advisors Pvt Ltd is the book-running lead manager of the Fonebook IPO, while Kfin Technologies Limited is the registrar for the issue. The market maker for Fonebook IPO is Spread X Securities.

i.) The company’s business highly depends on the brand recognition and reputation of the products it offers to sell and their inability to maintain or enhance brand image could hurt business, financial condition, and results of operations.

ii.) The company is dependent on a few numbers of suppliers for the purchase of products. The loss of any of these large suppliers may affect the business operations of Fonebook.

iii.) Its revenues are highly dependent on operations in the geographical region of Gujarat. Any adverse development in this region could harm the business, financial condition, and profitability of the company.

iv.) Given the high competitiveness of the industry, it faces stiff competition from online retailers who can offer products at competitive prices and are also able to offer a wide range of products. This has the potential to affect the business and financial condition of the company.

The grey market premium (GMP) surged by Rs 50, or 71.4 percent, over the issue price of Rs 70 on January 24. The GMP implies a listing price of Rs 120.

The grey market is an unofficial ecosystem where shares start trading much before the allotment and until the listing day. Investors typically track the grey market premium (GMP), which can fluctuate wildly, to get an indication of the listing price.

Fonebook IPO will likely list on NSE SME with a tentative listing date fixed as Friday, February 2, 2024.