The bidding for the initial public offering (IPO) of decorative aesthetics supplier SJS Enterprises will open in the coming week. Along with this, two other IPOs - Policybazaar and Sigachi Industries - will also open for the subscription.
Here are 10 key things to know before subscribing to SJS Enterprises' offer:
1) IPO Dates
The offer will open on November 1 and close on November 3.
2) Price Band
The price band for the offer has been fixed at Rs 531- Rs 542 per equity share.
3) Offer Details
It is entirely an offer for sale (OFS) issue by promoters. Evergraph Holdings Pte Ltd will offload Rs 710 crore worth of shares and K A Joseph will sell Rs 90 crore worth of shares via OFS.
Of the total issue size of Rs 800 crore, the company already mopped up Rs 240 crore from anchor investors on October 29.
4) Objectives
As it is entirely an offer for sale, the company will not receive any money from IPO. All the money will go to the promoters.
The objects of the offer is to achieve the benefits of listing the equity shares on the stock exchanges.
5) Lot Size and Investors' Reserved Portion
Minimum bid lot size is 27 equity shares and in multiples of 27 equity shares thereafter. Retail investors can subscribe for Rs 14,634 worth of shares (one lot) and the maximum investment by them can be Rs 1,90,242 (13 lots) as they are allowed to invest up to Rs 2 lakh in IPO.
Also read - Policybazaar IPO opens tomorrow: 10 key things to know about the issue, company
Half of the offer is reserved for qualified institutional buyers, 15 percent for non-institutional investors, and the remaining 35 percent for retail investors.
6) Company Profile
SJS Enterprises is one of the leading players in the Indian decorative aesthetics industry in terms of revenue in FY20 and FY21, offering the widest range of aesthetics products in India for a wide range of customers primarily in the automotive and consumer appliance industries.
The company supplied over 115 million parts with more than 6,000 SKUs (stock-keeping units) in FY21 to around 170 customers in approximately 90 cities across 20 countries.
It supplies aesthetics products for several industries including two-wheeler, passenger vehicle, consumer appliance, commercial vehicles, medical devices, farm equipment and sanitary ware. Its customers are Suzuki, Mahindra & Mahindra, John Deere, Volkswagen, Ashok Leyland, Honda Motorcycle, Bajaj Auto, Royal Enfield, TVS Motor, Marelli, Visteon, Brembo, Mindarika, Whirlpool, Panasonic, Samsung, Eureka Forbes, Godrej, Liebherr, Sensa Core, and Geberit.
Its manufacturing facilities are located at Bengaluru and Pune in India. The Pune facility was acquired as part of the recent acquisition of the subsidiary. As at June 2021, the annual production capacity of Bengaluru and Pune facilities was 209.70 million and 29.50 million products, respectively. Exotech was acquired by the company in April 2021.
Also read - Sigachi Industries IPO opens on November 1: 10 things to know about the issue, company
According to the CRISIL, the demand for aesthetics in India is expected to grow at a CAGR of approximately 20 percent over the FY21 to FY26 period to reach approximately Rs 4,920 crore by FY26 and is expected to surpass volume growth in demand for two-wheelers, passenger vehicles and consumer durables over that period.
7) Financials
SJS Enterprises recorded profit of Rs 47.76 crore in the year ended FY21, increasing from Rs 412.85 crore in FY20, and revenue in the same period, increased to Rs 251.61 crore from Rs 216.17 crore. In the quarter ended June 2021, the company had a profit of Rs 9.5 crore on revenue of Rs 74.3 crore.
In the three-month period ended June 2021 and FY21, the company's sales to original equipment manufacturers contributed 66.23 percent and 69.94 percent, respectively and sales to Tier-1 suppliers contributed 33.49 percent and 29.70 percent, respectively, to revenue from operations during the period.
8) Promoters and Management
Its promoters are KA Joseph and Evergraph, and their shareholding with promoter group in the company stands at 98.86 percent, while the remaining 1.14 percent is held by SCPL.
Ramesh Chandra Jain is the Chairman and Independent Director on the board, KA Joseph is the Managing Director, and Sanjay Thapar is the Executive Director and Chief Executive Officer of the company.
Kevin K Joseph, the son of KA Joseph, is an Executive Director of the company. Kazi Arif Uz Zaman, and Vishal Sharma are Nominee Directors, while Veni Thapar, and Matthias Frenzel are Non-Executive Independent Directors.
9) Risks and Concerns
Marwadi Financial Services pointed out some risks and concerns, saying the company operates in a highly competitive industry and increased competition may lead to a reduction in its revenues, reduced profit margins or a loss of market share. "The company may be unable to successfully integrate and manage Exotech or other strategic alliances or acquisitions that they may undertake in the future, which may expose them to business and financial risk."
Choice Broking also highlighted some risks including continued slowdown in the global auto sector, revenue concentration risk, raw material cost pressure, and business seasonality which may after the company's business.
10) Allotment & Listing date, and GMP
The company will finalise IPO share allotment on November 10 and the funds will be refunded to unsuccessful investors by November 11. Equity shares to eligible investors will be credited to their demat accounts by November 12.
The company will make a debut on the BSE and NSE on November 15.
SJS Enterprises shares were available at a price of Rs 567 in the grey market, a premium of Rs 25 or 4.6 percent over upper price band of Rs 542 per share, the IPO Watch data showed.
Axis Capital, Edelweiss Financial Services, and IIFL Securities are the book running lead managers to the issue.
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