Exxaro Tiles is a company that specializes in the marketing and production of vitrified tiles. It was founded in 2008. Exxaro Tiles has a product range that includes over 1000 distinct tile designs in six sizes.
The firm's well-known products include the Galaxy Series, Topaz Series, and High Gloss Series. The firm produces glazed vitrified tiles composed of ceramic elements such as quartz, clay, and feldspar, as well as double charge vitrified tiles (double layer pigment).
Large infrastructure projects, such as educational, hotels, educational institutions, government, and hospitals, are also served by the firm.
About the IPO
A pre-IPO placement of up to 22 lakh shares may potentially be considered by the firm.
According to the DRHP, the SME IPO would be for up to 1.34 crore shares, with a fresh issuance of 1.12 crore shares and a Dixit kumar Patel offer for the sale of up to 22.38 lakh shares.
The fresh issue's net proceeds would be used to repay debt, finance working capital requirements, and for general company reasons.
Objectives
- To repay or prepay secured borrowings that the firm has taken out.
- To satisfy the needs for working capital.
- Meeting the needs of the company as a whole.
Strength:
- The company has one of India's largest glazed vitrified tile production facilities.
- The company offers a wide range of vitrified tile designs in various sizes.
- Across India, one company has a substantial presence in 27 states.
- With over 2,000 registered dealers, it boasts a huge dealer network.
- It exports to more than 13 nations across the world.
Allocation:
Up to 50% of the shares will be allocated for qualified institutional purchasers, while 15% will be designated for non-institutional investors; the remaining 35% will be reserved for retail investors.
Employees will be entitled to a part of the offer.
Risks to be aware of:
- Supply and pricing fluctuation in raw materials, stores, and spares may have a negative impact on the company's business, financial condition, and results of operations.
- The company's failure to satisfy its working capital requirements might have a negative impact on its financial results.
- The company's failure to develop or manage its distribution network for commercial purposes, or the loss of any key dealer, might have a negative impact on its business and financial performance.
- Failure to satisfy its debt financing commitments might have a negative impact on the company's business, results of operations, and cash flow.
Strategies
- Enhance the brand's value.
- Increase sales through upgrading manufacturing capacity.
- Purchasing materials on an outsourced basis.
- Expanding dealer networks in existing markets and increasing export presence.
- Continue to increase operating efficiencies by implementing new technologies and opening your own gas station.
IPO Details
Subscription Dates4 – 6 August 2021 Price Band INR 118 – 120 per share Fresh issue 11,186,000 shares Offer For Sale 2,238,000 shares Total IPO size 13,424,000 shares Minimum bid (lot size) 125 shares Face Value INR10 per share Retail Allocation 35% Listing On NSE, BSE
Recommendation
In the fiscal year ending March 2021, the company's top five customers contributed 36.34 per cent of revenue, while the top ten customers accounted for 40.76 per cent of the top line. The Group continues to work to improve its position in the business world by establishing successful verticals.
Through its more than 2,000 registered dealers, it generates over 86 per cent of its income from the domestic retail and institutional market.
The remaining 13.88 per cent of total income comes from exports, the firm has no long-term commitments with any of its institutional clients, resulting in a hazy picture of its order book in the future.
The firm requires a significant quantity of operating capital to continue expanding.
The company's failure to manage its working capital requirements might have a detrimental impact.
We advocate investing in the Stock IPO for the reasons stated above.
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