The Indian appliance manufacturer Epack Durable has been making waves with its recent initial public offering (IPO). The IPO was oversubscribed by more than 16 times, indicating red-hot investor demand. As Epack Durable prepares to list on the bourses soon, here’s what investors need to know about this cooling stock.
Epack Durable IPO:
| Information | Details |
| Company Name | Epack Durable Limited |
| Company Business | Original design manufacturer of room air conditioners |
| Company Headquarters | Uttar Pradesh, India |
| IPO Launch Date | January 19, 2024 |
| IPO Close Date | January 24, 2024 |
| IPO Price Band | Rs 218-230 per share |
| Total IPO Size | Rs 640.05 crore |
| Fresh Issue Size | Rs 400 crore |
| Offer for Sale Size | 1.04 crore shares |
| IPO Subscription | 7.27 times |
The grey market premium (GMP)for its shares currently stands at Rs 28. This pegs the expected listing price at around Rs 248 per share, marking a potential 7.8% listing gain. The actual market value post-listing remains to be seen.
About Epack Durable:
Epack Durable is India’s largest and fastest-growing original design manufacturer of room air conditioners. Headquartered in Noida, Uttar Pradesh, the company manufactures over 0.6 million room ACs annually. With a focus on energy-efficient and premium products, Epack Durable works closely with leading AC brands to provide customized solutions.
Epack Durable Allotment and Listing:
| Information | Details |
| Allotment Date | January 25, 2024 |
| Finalization of Basis of Allotment | January 25, 2024 |
| Crediting of Allotted Shares | January 25, 2024 |
| IPO Registrar | KFin Technologies pvt ltd |
| Expected Listing Date | January 30, 2024 |
Investors can check the allotment status on the BSE website. The IPO is expected to be listed on BSE and NSE on January 30.
Epack Durable IPO Strengths:
- Long-standing customer relationships
- Leading market position as fastest growing ODM of ACs in India
- Strong reputation for quality and energy-efficient products
- Customer-centric approach and innovative services
- Robust historical financial performance (44.6% revenue CAGR from FY21-23)
- Operating revenues exceeding INR 500 crore in FY23
However, potential investors should remain cognizant of risks like customer concentration and market cyclicality associated with EPACK Durable’s business.
Also Read: Nova AgriTech IPO: GMP, Allotment and Listing Date, and Growth Potential
Epack Durable’s Revenue Growth:
Riding tailwinds like improved financing options and high seasonal demand, Epack Durable’s revenues have surged at an impressive 44.6% CAGR over FY21-FY23 to Rs 1,538.8 crore. Despite expectations of a premium listing, Epack Durable’s IPO valuation at 65.7 P/E seems reasonable compared to peers. However, investors should remain cognizant of inherent industry risks.
Subscription Status of Epack Durable IPO:
The maiden public offer of Epack Durable witnessed strong interest from investors. On the final day of bidding, the IPO was overall subscribed 16.37 times, led by huge demand from institutional buyers.
How to Apply for Epack Durable IPO:
- Open a demat account with a broker
- Login to the broker’s platform
- Select Epack IPO
- Enter lot size (65 shares) and bid price
- Provide UPI ID on the platform
- Approve mandate requests in the UPI app
- Bank to block funds via UPI ID
- Approve UPI mandate to submit bid
Refer article on InvestorGain for a detailed process of using UPI to bid for an IPO.
Positive Aspects & Risks In Epack Durable IPO:
Positive Aspects:
- Strong Product Portfolio: Epack Durable has a diverse and comprehensive range of offerings, including room air conditioners, small domestic appliances, and components like heat exchangers, cross-flow fans, and axial fans.
- Customer-Centric Approach: The company prioritizes continuous product portfolio expansion and works jointly with customer teams to customize products according to different client requirements, reflecting a customer-centric approach.
- Operational Efficiency and Growth Potential: Epack Durable has demonstrated consistent financial performance, operational efficiency, and growth potential, as evidenced by its financial results and market position.
Risks:
- Labour Dependency: Epack Durable relies on contract labour for manufacturing, and any unavailability or unfavourable regulatory orders related to this labour could affect its operations.
- Competition and Customer Dependency: The industry is competitive, and the company relies heavily on a few key customers for its income. Additionally, the insourcing capacity of key AC brands is a potential challenge for outsourcing companies like Epack Durable.
- Seasonal Demand Fluctuations: The air conditioner business goes through financial ups and downs because of seasonal changes and market cyclicality, which could impact the company’s financial performance
In Conclusion:
With its differentiated business model, focus on energy efficiency and robust historical growth, Epack Durable makes for an interesting IPO play for investors with a higher risk appetite. However, industry challenges remain key watchables. As Epack Durable prepares for its market debut, investors will watch keenly how this cooling stock fares on the bourses.