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The fresh issue of Electronics Mart India (EMI) to raise Rs 500 crore, will be open to the public from October 4 to October 7.
Electronics Mart India is the 4th largest consumer durable and electronics retailer in India with a retail space of 10,56,835 square feet making their dominance in the states of Telangana and Andhra Pradesh.
The company classifies its products as large appliances contributing towards 50% of sales, mobiles contributing 30%, and small appliances, IT equipment, and others contributing towards the rest of sales.
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EMI has maintained long-term relationships with a few renowned brands like LG, Panasonic, Philips, Vivo, Oppo, Havells, etc
The flexible business model of the EMI is one of the key indicators which keeps its funds rotating. EMI has its own properties and also has taken the properties under a long-term lease. As of August 2022, the company operated through 112 stores, 100 of which were multi-brand outlets (MBO) and 12 were exclusive brand outlets. The management intends to add 60 new stores in a couple of years.
EMI has outperformed its competitors with revenue growing at a CAGR of 26% since 2015 and delivered a return on equity (RoE) of 17.4% in the last financial year 2022.
EMI is offering its shares at an attractive price-to-earnings (PE) multiple of 21.8 times FY22 earnings. Its EV/EBITDA is 9.7 times FY22 values. The issue is available at a lower valuation when compared to its listed peer Aditya Vision.
The promoters of the company are to dilute 22.03% of the paid-up share capital. EMI’s IPO is opened for the public at a price band of Rs 56-59 with a minimum lot of 254 shares. Of the total shares available, 50% are reserved for institutional buyers, while 15% and 35% are reserved for non-institutional and retail investors respectively.
With the high growth prospects, increasing market share, a sound business model, and an experienced management team, the issue does seem to be eye-catching.
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