Epack Durable IPO to open on January 16; Sets issue price at Rs 218-230 apiece

16 Jan 2024 , 12:02 PM

Established in 2019, EPACK Durable Limited operates as an Original Design Manufacturer (ODM) specializing in room air conditioners (RAC). The company is involved in the production of various components essential for RAC manufacturing, including sheet metal parts, injection-molded parts, cross-flow fans, and PCBA components.

Recognizing the seasonal demand for RACs, EPACK Durable has diversified its business into the small domestic appliance (SDA) market. Presently, the company is engaged in the development and manufacturing of induction hobs, blenders, and water dispensers to cater to this expanding market segment.

1. IPO Details:
   • The price band for the IPO is set at Rs 218-230 per share.
   • The IPO consists of a fresh issue of Rs 400 crore by the company and an offer-for-sale (OFS) of 1.04 crore equity shares by existing shareholders.
   • The IPO subscription period is from January 19 to January 23, with the anchor book opening on January 18.
   • The fund-raising target at the upper price band is Rs 640 crore.
2. Utilization of Funds:
   • The net proceeds from the fresh issue will be utilized for:
     • Funding capital expenditure for expansion/setting up of manufacturing facilities.
     • Repayment and/or prepayment of certain outstanding loans.
     • General corporate purposes.
3. Promoter and Shareholding:
   • Promoters, including Bajrang Bothra, Laxmi Pat Bothra, Sanjay Singhania, and Ajay DD Singhania, will sell 51.75 lakh shares in the OFS.
   • Public shareholders will sell 52.62 lakh shares.
   • Promoters’ current shareholding is 65.36%, and the remaining 34.64% is held by the public.
4. Minimum Lot Size and Retail Investors:
   • The minimum lot size is 65 equity shares.
   • Retail investors can bid for a minimum of 65 equity shares worth Rs 14,950.
5. Allocation:
   • Half of the IPO size is reserved for qualified institutional buyers (QIBs), and 15% is allocated to non-institutional investors (high net worth individuals).
6. Use of Proceeds:
   • Rs 230 crore from the net fresh issue proceeds will be used for the expansion of manufacturing facilities.
   • Rs 80 crore will be used for repaying debts, and the remaining amount is allocated for general corporate purposes.
7. Financial Performance:
   • Epack Durable recorded healthy financial performance.
   • Net profit grew by 83.4% year-on-year to Rs 32 crore for the financial year 2022-23.
   • Revenue from operations increased by 66.5% to Rs 1,539 crore during the same period.
   • EBITDA in the last financial year was Rs 102.5 crore, showing a 49% increase compared to the previous fiscal year. However, the margin dropped to 6.66%.
8. Book Running Lead Managers and Registrar:
   • Axis Capital Limited, Dam Capital Advisors Ltd, and ICICI Securities Limited are the book running lead managers.
   • Kfin Technologies Limited is the registrar for the issue.

The company’s manufacturing infrastructure comprises four production facilities in Dehradun, namely Dehradun Unit I, Dehradun Unit II, Dehradun Unit III, and Dehradun Unit IV. Additionally, there is one manufacturing facility located in Bhiwadi, Rajasthan. As of March 31, 2023, EPACK Durable boasts an annual production capacity that includes manufacturing 0.90 million Indoor Units (IDUs), 0.66 million Outdoor Units (ODUs), 0.36 million ODU kits, and 0.42 million Window Air Conditioners (WACs). Furthermore, the company has the capacity to produce 0.11 million water dispensers, 1.2 million induction hobs, and 0.30 million mixers, along with their respective components.