Identixweb

• Identixweb is coming out with an initial public offering (IPO) of 30,80,000 equity shares in a price band Rs 51-54 per equity share.
• The issue will open on March 26, 2025 and will close on March 28, 2025.
• The shares will be listed on SME Platform of BSE.
• The face value of the share is Rs 10 and is priced 5.1 times of its face value on the lower side and 5.4 times on the higher side.
• Book running lead manager to the issue is Beeline Capital Advisors.
• Compliance Officer for the issue is Pooja Shah. 

Profile of the company

The company, as an IT firm, is involved in providing Software as a service (SAAS) - based digital product solutions. The company offers E-Commerce Store Development, Web App Development, UI/UX Design, Website development, Customize Software Development, support and maintenance with a primary focus on Shopify application development. The primary goal of the company is to deliver applications online, eliminating the need for installation and maintenance. This approach simplifies software management. Its products include many Shopify applications that are conversion-optimized and tailored made to meet customer needs. It provides its products and services worldwide across a wide range of sectors.

The company specializes in Shopify application development, which focuses on creating applications that enhance the functionality and performance of Shopify stores. These applications can range from tools that improve store management and customer engagement to features that optimize sales and streamline operations. Shopify is a leading e-commerce platform that powers over a million businesses worldwide. Its flexibility and scalability make it an ideal choice for businesses of all sizes. However, to truly maximize the potential of a Shopify store, merchants often need custom applications that cater to their specific needs. Its extensive experience and deep understanding of the Shopify platform enable the company to deliver top-tier Shopify solutions. It is committed to ensure that all its services are executed with the highest level of precision and customer satisfaction. Its dedication to excellence has earned the company a reputation for delivering innovative, reliable, and efficient Shopify solutions that help merchants achieve their business goals.

Proceed is being used for:

• Investment in marketing to support organization’s growth plans in India or Outside India
• Investment into market research and product development through Talent Hiring for the issuer company
• Investment in its subsidiary i.e., Munim ERP Private Limited for product development through talent hiring
• General corporate purposes 

Industry overview 

The IT & BPM sector has become one of the most significant growth catalysts for the Indian economy, contributing significantly to the country’s GDP and public welfare. The IT industry accounted for 7.5% of India’s GDP in FY23, and it is expected to contribute 10% to India’s GDP by 2025. As innovative digital applications permeate sector after sector, India is now prepared for the next phase of growth in its IT revolution. India is viewed by the rest of the world as having one of the largest Internet user bases and the cheapest Internet rates, with 76 crore citizens now having access to the Internet.

The IT spending in India is estimated to record a double-digit growth of 11.1% in 2024, totalling $138.6 billion up from $124.7 billion last year. The Indian software product industry is expected to reach $100 billion by 2025. Indian companies are focusing on investing internationally to expand their global footprint and enhance their global delivery centres. The data annotation market in India stood at $250 million in FY20, of which the US market contributed 60% to the overall value. The market is expected to reach $7 billion by 2030 due to accelerated domestic demand for AI.

India is the topmost offshoring destination for IT companies across the world. Having proven its capabilities in delivering both on-shore and off-shore services to global clients, emerging technologies now offer an entire new gamut of opportunities for top IT firms in India. The IT spending in India is estimated to record a double-digit growth of 11.1% in 2024, totalling $138.6 billion up from $124.7 billion last year. India’s public cloud services market grew to $3.8 billion in 1H2023, expected to reach $17.8 billion by 2027. By 2026, widespread cloud utilisation can provide employment opportunities to 14 million people and add $380 billion to India's GDP.

Pros and strengths

Tailored solutions: The company possesses extensive experience and expertise in Shopify app development. Its team specializes in crafting custom web applications that enhance the functionality, performance, and user experience of online stores, helping merchants maximize their potential and streamline their operations.

Client-centric approach: The company prioritizes its clients’ needs and success above all else. Its client-centric approach involves thoroughly understanding their business goals and challenges, enable the company to deliver customized solutions that drive growth and efficiency. It is committed to building long-term relationships founded on trust, transparency, and mutual success.

Comprehensive development services: The company provides a wide range of development services beyond Shopify, through Node.js, PHP, and React.js development. This extensive array of services allows the company to meet diverse client needs and deliver integrated solutions that drive business growth.

Risks and concerns

Dependent on few numbers of customers: Its top ten customers contribute 99.18%, 99.66%, 100.00%, and 100.00% of its total revenue from operations on standalone basis for the period / year ended on September 30, 2024, March 31, 2024, 2023 and 2022, respectively. Its business operations are highly dependent on its customers and the loss of any of its customers may adversely affect its sales and consequently on its business and results of operations.  s. The loss of one or more of these significant or key customers or a reduction in the amount of business it obtains from them could have an adverse effect on its business, results of operations, financial condition and cash flows.

Failure to offer customer support in timely: From time to time, its customers require its customer support team to assist them in using its services, help them in resolving post-deployment issues quickly and in providing ongoing support. If it does not devote sufficient resources or are otherwise unsuccessful in assisting its customers effectively, it could adversely affect its ability to retain existing customers and could prevent prospective customers from adopting its services. It may be unable to respond quickly enough to accommodate short-term increases in demand for customer support. It also may be unable to modify the nature, scope and delivery of its customer support to compete with changes in the support services provided by its competitors. Increased demand for customer support, without corresponding revenue, could increase costs and adversely affect its business, results of operations and financial condition.

Intense competition: It operates in an intensely competitive industry that experiences rapid technological developments, changes in industry standards, and changes in customer requirements. Its competitors include large IT consulting firms, captive divisions of large multinational technology firms, large Indian IT services firms, in-house IT departments of large corporations, in addition to numerous smaller local competitors in the various geographic markets in which it operates. The technology services industry is experiencing rapid changes that are affecting the competitive landscape. It may faces competition from companies that increase in size or scope as the result of strategic mergers or acquisitions, which may result in larger competitors with significant resources that benefit from economies of scale and scope.

Outlook

Incorporated in 2017, the company, as an IT firm, is involved in providing Software as a service (SAAS) - based digital product solutions. The company offers E-Commerce Store Development, Web App Development, UI/UX Design, Website development, Customize Software Development, support and maintenance with a primary focus on Shopify application development. On the concern side, majority of its revenues are generated from single customer Shopify Inc. Any adverse development affecting its operations in this region could have an adverse impact on its business, financial condition and results of operations. Meanwhile, if it does not successfully anticipate market needs or develop and introduce new solutions that meet users’ needs on a timely basis, it may not be able to compete effectively and its revenue, reputation, financial conditions, results of operations and cash flows may be adversely affected.

The company is coming out with a maiden IPO of 30,80,000 equity shares of Rs 10 each. The issue has been offered in a price band of Rs 51-54 per equity share. The aggregate size of the offer is around Rs 15.71 crore to Rs 16.63 crore based on lower and upper price band respectively. On performance front, the company’s revenue from operation increased from Rs 622.11 lakh in FY 2022-23 to Rs 632.90 lakh in FY 2023-24, showing increase of 1.73%. Moreover, the profit after tax increased by 106.22% from Rs 137.67 lakh in FY 2022-23 to Rs 283.90 lakh in FY 2023-24.

Going forward, over the years, it has built long-lasting relationships with its customers. It invests considerable effort in understanding their behaviour, preferences, and trends through research and consultation. This process gives it a unique perspective in its engagements. Additionally, it conducts regular market scans to identify emerging technologies and solutions. With this approach, it aims to become an integral part of its customers' operating and growth strategies, enabling it to support them across multiple touchpoints and projects. It focuses on expanding its relationships with existing customers by helping them solve new challenges and become more engaging, responsive, and efficient. Its track record demonstrates its ability to extend its work with customers beyond initial engagements.

ATC Energies System

• ATC Energies System is coming out with an initial public offering (IPO) of 54,03,600 equity shares in a price band Rs 112-118 per equity share.
• The issue will open on March 25, 2025 and will close on March 27, 2025.
• The shares will be listed on SME Platform of NSE.
• The face value of the share is Rs 10 and is priced 11.2 times of its face value on the lower side and 11.8 times on the higher side.
• Book running lead manager to the issue is Indorient Financial Services.
• Compliance Officer for the issue is Kiran Honnaya Shettigar. 

Profile of the company

The company produces and supplies lithium-ion batteries. It provides efficient and low-cost lithium and li-ion batteries by developing a full scale vertically integrated energy storage solutions for various industries and end user such as banking, automobiles etc. Its factories are located at Vasai, Thane and Noida, NCR with latest machines and technology comprising an in-house integrated development and assembling system as well as quality testing infrastructure, wherein a range of customised as well as standardized lithium batteries are made.

The company commenced its business producing mini size batteries (upto 100Wh) primarily catering to the Banking Industry for POS and ATM Machines. Over the years, it has expanded its product portfolio to manufacture batteries of all sizes i.e. large [above 2,000 Wh], medium (751-2,000 Wh), small (101-750 Wh) and mini for a wide range of industries and other end use applications. It has an in-house team for designing, engineering and customising the products to suit the end use of its customers. The scope of its services typically includes designing and engineering the products to suit the end use of its products.

The company is accredited with the following certifications - ISO 9001:2015, ISO 14001:2015, ISO 45001:2018, RoHS [Restriction on Hazardous Substances]. It adheres to strict quality control measures during its processes to extract full life of the products. Alongside its customer-focused approach, its Research and Development team looks for opportunities for next generation and innovative products. The continuous research, development and introduction of latest production technologies of renewable energy storage solutions on a global level by various countries are complementing the company’s future growth story.

Proceed is being used for:

• Repayment and/or pre-payment, in full, of the borrowing availed by the company with respect to purchase of its Noida factory including land and building.
• Funding the capital expenditure requirements towards refurbishment, civil and upgradation works at its Noida factory.
• Funding the capital expenditure requirement towards IT upgradation at its Noida factory, Vasai factory and its registered office.
• Funding working capital requirements of the company.
• General corporate purposes.

Industry overview 

The lithium-ion industry is witnessing healthy demand growth in India backed by rising usage in diversified end user industry. The country’s cumulative lithium-ion battery market in India have grown from 2.9 GWh in 2018 to 22.4 GWh in 2021 and is estimated to have grown further to 49.8 GWh in 2023. Between 2020-23, the market demand is estimated to have grown by 47% CAGR. This expansion is driven by advancements in battery technology, heightened investment in renewable energy infrastructure, and supportive government policies promoting green energy and sustainable transportation. Leading companies in the market are concentrating on increasing production capacity, improving battery efficiency, and ensuring sustainable supply chains to meet the growing demand while addressing environmental and resource-related challenges.

India annual Lithium-ion battery demand is estimated to have grown from 3GWh in 2020 to around 11 GWh in 2022 while 2023 it is estimated to have accelerate further to nearly 17 GWh in 2023. Annually, stationary application and transport application were estimated to have accounted for 43% and 38% share with annual demand of 4.7 GWh and 4.1 GWh, respectively while Consumer Electronics segment was estimated to account for a 19% share, with 2.1 GWh lithium-ion battery consumption.

The Indian government has been actively promoting domestic manufacturing of Lithium-ion batteries as part of its efforts to boost the adoption of electric mobility and reduce the country's dependence on imports. Several policies and initiatives have been introduced to incentivize and support the growth of the EV battery manufacturing ecosystem in India. Some of the key government policies are: National Electric Mobility Mission Plan (NEMMP); Faster Adoption and Manufacturing of Hybrid and Electric Vehicles (FAME) India Scheme; Production-Linked Incentive (PLI) Scheme; The National Mission on Transformative Mobility and Battery Storage (NMTMBS); Phased Manufacturing Program (PMP); and Scheme for Promotion of Manufacturing of Electronic Components and Semiconductors (SPECS).

Pros and strengths

Focus on quality and performance: A strong focus on quality and performance of its product offerings is a crucial strength for the company. Emphasizing high standards in product quality ensures reliability, safety, and superior performance, which are essential in critical applications such as electric vehicles, medical devices, and renewable energy storage. Its stringent quality control measures and protocols at each critical step in its processes has not only minimized the risk of product failures and costly recalls but also built consumer trust and loyalty.

Diversified product portfolio: Its diversified and comprehensive product portfolio is a critical strength of its business. While, it commenced its business producing mini size batteries for the Banking Industry, it has established itself as a player providing all sizes of battery cells for a wide range of industry and business end user applications. It has the ability to curate and customise products which can be tailored according to the specific needs and standards of its customers. This adaptability not only enhances market resilience against economic fluctuations in any single industry but also positions the company as a versatile and reliable supplier, capable of innovating and meeting the evolving technological needs of diverse customers.

Stable financial performance: It has demonstrated stable financial performance over the years with growth in terms of revenues and profitability. Over the last three years, it has focused its attention towards expanding its product portfolio which has resulted in an increase in its revenue from operations and profits. The stable growth in revenue, profits, ROCE enables the company to fund its strategic initiatives and pursue opportunities for growth.

Risks and concerns

Do not have long term contracts with suppliers: It does not currently have long term contracts or exclusive supply arrangements with any of its suppliers from whom it purchases the raw materials. The key raw materials needed in making its lithium-ion batteries mainly include lithiumion cells and Battery Management System which are imported. The price and availability of such input materials are subject to, supply side disruptions and are dependent on several factors beyond its control, including overall economic conditions, taxes and duties, the prevailing Indian regulatory environment, foreign exchange rate, production levels and competition. 

Heavy dependence on raw material imports from China: Its business faces a significant risk due to its heavy reliance on imports from China. China holds a dominant position in the global battery market, serving as a primary source for producing raw materials mainly cells and Battery Management System needed for making lithium-ion battery packs. This dependency on Chinese imports exposes the company to various risks that can impact their operations and profitability. Political tensions, trade disputes, or changes in trade policies between China and India can disrupt the flow of its raw materials, leading to supply chain disruptions and operational challenges. Tariffs, export restrictions, or retaliatory measures can increase costs and limit access to critical components, affecting the competitiveness and profitability of battery businesses.

Industry is labour intensive: Its industry being labour intensive is dependent on labour force for carrying out its operations. Shortage of skilled/unskilled personnel or work stoppages caused by disagreements with employees could have an adverse effect on its business and results of operations. Though it has not experienced any major disruptions in its business operations due to disputes or other problems with its work force in the past; however, there can be no assurance that it will not experience such disruptions in the future. Such disruptions may adversely affect its business and results of operations and may also divert the management’s attention and result in increased costs.

Outlook

ATC Energies System, incorporated in September 2020, is dedicated to providing efficient and affordable lithium and li-ion batteries. With factories in Vasai, Thane, and Noida, NCR, the company utilizes advanced technology and quality testing infrastructure. On the concern side, it faces competition globally in its business, which is based on many factors, including product quality and reliability, product design and development, technology, manufacturing capabilities, price and brand recognition. It competes with competitors to retain its existing business as well as to acquire new business. It faces competition from both domestic as well as international players and its inability to compete effectively may have a material adverse impact on its business and results of operations.

The company is coming out with a maiden IPO of 54,03,600 equity shares of Rs 10 each. The issue has been offered in a price band of Rs 112-118 per equity share. The aggregate size of the offer is around Rs 60.52 crore to Rs 63.76 crore based on lower and upper price band respectively. On performance front, the company’s revenue increased from Rs 3,313.54 lakh in Fiscal 2023 to Rs 5120.37 lakh in Fiscal 2024, a hike of 55%. Moreover, the profit after tax grew from Rs 775.57 lakh in Fiscal 2023 to Rs 1,089.16 lakh in Fiscal 2024, a hike of around 40%.

Meanwhile, its primary focus is to improve its operational efficiency at its manufacturing facilities which will lead to cost minimization and better resource utilization. Higher operational efficiency results in greater production volumes and higher sales, and therefore allows the company to spread fixed costs over the increased sales quantity, thereby increasing profit margins of the company. This includes investing in automation, new technology, and better equipment to upgrade its products and improve quality based on what customers want. It strives to achieve economies of scale to gain increased negotiating power on procurement and to realize cost savings through centralized deployment and management of production and other support functions.

Shri Ahimsa Naturals

• Shri Ahimsa Naturals is coming out with an initial public offering (IPO) of 62,02,800 equity shares in a price band Rs 113-119 per equity share.
• The issue will open on March 25, 2025 and will close on March 27, 2025.
• The shares will be listed on SME Platform of NSE.
• The face value of the share is Rs 10 and is priced 11.3 times of its face value on the lower side and 11.9 times on the higher side.
• Book running lead manager to the issue is Srujan Alpha Capital Advisors LLP.
• Compliance Officer for the issue is Aayushi Jain. 

Profile of the company

The company commenced its operations in 1990 and is presently engaged in the extraction, manufacturing, of Caffeine Anhydrous Natural, Green Coffee Bean Extracts (GCE) and Crude Caffeine along with trading of other herbal extracts. Its products find their application in the food & beverage, nutraceuticals, cosmetics and pharmaceutical industries due to their health benefits. The company primarily processes crude caffeine procured from multiple decaffeination plants situated at Vietnam, Mexico, etc. The primary raw material of the company, crude caffeine, is a bi-product of such decaffeination plants. It further processes crude caffeine to manufacture GCE and Caffeine Anhydrous Natural. Initially, the company's business focused solely on the extraction, manufacturing, and sale of Caffeine Anhydrous Natural. Through further research and development on crude caffeine sourced from certain suppliers, the company discovered that it contained GCE. To capitalize on this opportunity, the company developed a process to extract GCE from the crude caffeine and subsequently added GCE to its product portfolio in 2018. 

Additionally, in response to the growing demand for other herbal extracts from its customers, the company expanded its product portfolio to include various herbal extracts in year 2021. Since the year 2022, the company has started manufacturing Crude Caffeine from Tea waste and Coffee waste, which is sold in open market and used for captive consumption. The quality of its product is well accepted in international market and the same is evidenced by getting repeat orders from its various customers. During the period ended on September 30, 2024, it had an on-going business relationship of three or more than three years with almost 32% of its total customers who contributed almost 57% of the revenue from the operations for the period ended on September 30, 2024.

Proceed is being used for:

• Investment in its wholly-owned subsidiary, Shri Ahimsa Healthcare Private Limited (SAHPL) for setting up a manufacturing facility at Sawarda, Jaipur, Rajasthan.
• General corporate purpose.

Industry overview 

Caffeine is a chemical compound naturally available in tea and coffee and in some other plants like cocoa beans and guarana berries. This compound comes primarily from ‘Coffea Arabica’ and ‘Coffea Robusta’ a shrub or tree that grows in high-altitude subtropical and equatorial regions of the world. The Caffeine Anhydrous market has experienced significant growth, with a valuation of $622.4 million in 2023, projected to reach $881.5 million by 2030, showcasing a steady Compound Annual Growth Rate (CAGR) of 6.88% during the forecast period of 2024-2030. This expansion is propelled by the increasing adoption of Anhydrous Caffeine across various end-use verticals, notably in the beverage industry and dietary supplements sector.

Several factors contribute to the expanding Anhydrous Caffeine market, including heightened health awareness, the prevalence of obesity among adults, escalating demand from athletes, and its utilization as supplements for diet and weight loss purposes. The prevalence of obesity and overweight offers has spurred consumer interest in weight loss supplements, thereby strengthening the demand for Anhydrous Caffeine due to its nerve stimulant properties, which have been found beneficial for weight control.

Global demand for Caffeine continues to rise, prompting manufacturers to invest in producing superior quality Caffeine products. Coffee, as one of the world's most favored beverages, plays a pivotal role in this market dynamic, with coffee beans ranking as the second most heavily traded commodity globally. Notably, consumer preferences are shifting towards low and no-calorie beverages, with increasing emphasis on scrutinizing ingredients like Caffeine and preservatives, as highlighted by a recent survey conducted by the International Food Information Council (IFIC).

Pros and strengths

Quality service: It has set high standards for itself when it comes to timeliness and quality of service it provides to its customers. It ensures that all the products reach its customers on stipulated time and there are minimum errors to ensure reduced product rejection. Its quality service for the last 3 decades has earned the company a confidence from its customers, which has resulted in customer retention and order repetition. It has also helped it to add to its existing customer base. It has internal procedure of checking the client orders at each stage from customer order to delivery. The company focuses on maintaining the level of consistency in its service, thereby building customer loyalty for its product.

Long term relationship with clients: The company has long established relationships with its key customers. It has developed a wide clientele base and this was done with its valued based relationship approach. Its existing relationships help it to get repeat businesses from its customers. This has helped the company to maintain a long-term working relationship with its customers and improve its customer retention strategy. Its existing relationship with its clients represents a competitive advantage in gaining new clients and increasing its business.

Healthy relationship with crude caffeine suppliers: One of the crucial aspects of its industry is availability and sourcing of raw materials for production of the final product. Its existing supplier relationship helps and protects its business in terms of timely supply and pricing and quality of the products offered. The company, being a relatively smaller size organization, relies on personal relationships with its suppliers. Further, it also leverages the past experience of its management in maintaining effective supplier relationship ensuring uninterrupted supply chain management.

Risks and concerns

Dependent on limited number of customers: A significant majority of its revenues from operations is derived from a limited number of customers. However, the composition of revenue generated from these customers might change as it continues to add new customers in the normal course of business. Its revenues may be adversely affected if there is an adverse development with such customer, including as a result of a dispute with or its quality issue with such major customers, which may result in significant reduction in its orders from such customers, and thereby decline in its revenue, cash flows and liquidity. Further, if its customers are able to fulfil their requirements through captive or in house manufacturing or any of its existing or new competitors providing products with better quality, or cheaper cost, it may lose significant portion of its business and revenue.

Requires certain approvals and licenses: The company requires several statutory and regulatory permits, licenses and approvals to operate its business. Many of these approvals are subject to periodical renewal. Any failure to renew the approvals that may expire, or to apply for the required approvals, licences, registrations or permits, or any suspension or revocation of any of the approvals, licences, registrations and permits that have been or may be issued to the company, could result in delaying the operations of its business, which may adversely affect its business, financial condition, results of operations and prospects.

Dependent on third-party suppliers: The company is dependent on third-party suppliers for its raw materials. The raw materials used by the company include Crude Caffeine. Discontinuation of production by these suppliers or a failure of these suppliers to adhere to the delivery schedule or the required quality could hamper its production schedule and therefore affect its business and results of operations. This dependence may also adversely affect the availability of key materials at reasonable prices thus affecting its margins and may have an adverse effect on its business, results of operations and financial condition.

Outlook

The company primarily processes crude caffeine procured from multiple decaffeination plants. The primary raw material is crude caffeine, a bi-product of such decaffeination plants. It processes crude caffeine to manufacture GCE and Caffeine Anhydrous Natural. The company's business focused on extraction, manufacturing & sale of Caffeine Anhydrous Natural. On the concern side, the company is dependent on third party transportation providers for transportation of raw materials and finished goods. Accordingly, any increase in transportation costs or unavailability of transportation services for its products or transportation strikes may have an adverse effect on its business. 

The company is coming out with a maiden IPO of 62,02,800 equity shares of Rs 10 each. The issue has been offered in a price band of Rs 113-119 per equity share. The aggregate size of the offer is around Rs 70.09 crore to Rs 73.81 crore based on lower and upper price band respectively. On performance front, the company’s total income has decreased by 25.85% to Rs 7,870.39 lakh in Financial Year ended March 31, 2024 from Rs 10,613.98 lakh in Financial Year ended March 31, 2023 primarily due to overall decrease in the revenue from operations and other income. Moreover, the company recorded a decrease of 51.14% in profit after tax from Rs 3,820.80 lakh in Financial Year ended March 31, 2023 to Rs 1,866.73 lakh in Financial Year ended March 31, 2024.

Meanwhile, the company intends to expand its supplier base to drive down net costs and reduce dependency on a limited number of suppliers, thereby improving its margins, shortening product time to market, and ensuring a timely supply of raw materials. This strategic move will enhance its geographical presence and operational efficiency by allowing the company to negotiate better terms, leverage competitive pricing, and mitigate risks associated with supplier-specific issues. Additionally, optimizing procurement processes and fostering relationships with diverse suppliers will improve production efficiency, product quality, and innovation, supporting sustained profitability and long-term growth for the company.

Desco Infratech

• Desco Infratech is coming out with an initial public offering (IPO) of 20,50,000 equity shares in a price band Rs 147-150 per equity share.
• The issue will open on March 24, 2025 and will close on March 26, 2025.
• The shares will be listed on SME Platform of BSE.
• The face value of the share is Rs 10 and is priced 14.7 times of its face value on the lower side and 15 times on the higher side.
• Book running lead manager to the issue is Smart Horizon Capital Advisors.
• Compliance Officer for the issue is Gandharva Javanika. 

Profile of the company

The company is engaged in providing infrastructure and maintenance services to city gas distribution divisions in India. It engages in activities such as pipeline laying, installation, testing, erection and commissioning for Piped Natural Gas (PNG) utilized by both domestic and commercial users. Its Operation and Maintenance services (O&M Services) encompass both underground and above ground gas pipeline work for carbon steel and MDPE pipelines. As part of its O&M Services, it conducts lock pressure and leak detection tests on MDPE pipelines to identify leaks and prevent significant natural gas losses and potential accidents resulting from these leaks. It maintains client dedicated emergency response vehicles designed to detect leaks and deter unauthorized access, addressing potential hazards proactively. When a situation arises, a specialized team comprising an engineer, technicians and support staff is mobilized to the location. This team takes safe and immediate action to assess the situation and implements necessary measures, ensuring a quick operational recovery and minimizing any uninterrupted gas supply.

The company has recently begun offering services in the power division, focusing on the installation, connectivity, commissioning, and erection of Low Tension (LT) and High Tension (HT) cables. These services ensure efficient power transmission and distribution across industrial, commercial, and residential applications. In the month of April, 2023, it received its first order to provide services works for execution of works for connectivity and laying of double walt cable and HDPE pipes including cabling and termination works for Traffic Signal Lights in Surat.

Proceed is being used for:

• Funding of capital expenditure requirements towards setting up of corporate office in Surat, Gujarat.
• Funding of capital expenditure requirements towards purchase of machineries.
• Funding working capital requirements. 
• General corporate purposes.

Industry overview 

The infrastructure sector is a key driver of the Indian economy. The sector is highly responsible for propelling India’s overall development and enjoys intense focus from the Government for initiating policies that would ensure the time-bound creation of world-class infrastructure in the country. The infrastructure sector includes power, bridges, dams, roads, and urban infrastructure development. In other words, the infrastructure sector acts as a catalyst for India’s economic growth as it drives the growth of the allied sectors like townships, housing, built-up infrastructure, and construction development projects.

The oil and gas sector is among the eight core industries in India and plays a major role in influencing the decision making for all the other important sections of the economy. India’s economic growth is closely related to its energy demand, therefore, the need for oil and gas is projected to increase, thereby making the sector quite conducive for investment. India retained its spot as the third-largest consumer of oil in the world as of 2023. According to the IEA (India Energy Outlook 2021), primary energy demand is expected to nearly double to 1,123 million tonnes of oil equivalent, as India's gross domestic product (GDP) is expected to increase to $8.6 trillion by 2040. Indian refining capacity has increased from 215.1 million Metric Tons Per Annum (MMTPA) to 256.8 MMTPA in last 10 years. It is projected to increase to 309.5 MMTPA by the year 2028.

Rapid economic growth is leading to greater outputs, which in turn is increasing the demand of oil for production and transportation. Crude oil consumption is expected to grow at a CAGR of 4.59% to 500 million tonnes by FY40 from 223.0 million tonnes in FY23. In terms of barrels, India’s oil consumption is forecast to rise from 4.05 MBPD in FY22 to 7.2 MBPD in 2030 and 9.2 MBPD in 2050. Diesel demand in India is expected to double to 163 MT by 2029-30, with diesel and petrol covering 58% of India’s oil demand by 2045. Demand is not likely to simmer down anytime soon, given strong economic growth and rising urbanisation.

Pros and strengths

Direct relationship with suppliers: It has established direct relationships with various companies/firms to streamline its material supply chain. This effectively reduces procurement costs by eliminating middlemen, allowing it to negotiate more favourable terms and ensure greater control over the quality of the products it receives. By working directly with suppliers, it enhances its ability to protect its business interests, ensuring that terms and conditions are transparent and aligned with its needs. Furthermore, its management team leverages their extensive experience in supplier relationship management, which enables it to foster reliable partnerships. This ensures an uninterrupted supply of raw materials but also allows it to respond swiftly to market changes and maintain operational efficiency. 

Standard Operating Procedures: Structured operating procedures (SOPs) form a vital strength for its contracting services in the city gas distribution industry. These procedures provide a clear framework for executing tasks related to pipeline installation, maintenance, and safety protocols, ensuring consistency and efficiency across all projects. In the city gas distribution sector, where safety and compliance are paramount, structured SOPs help mitigate risks and enhance operational safety. By following standardized methods like using of non-sparking tools while gas leak check, etc, its teams ensure to maintain high safety standards during all phases of a project, from initial installation to ongoing maintenance.

Adherence to safety and compliance standards: It prioritizes strict compliance with industry standards, regulatory requirements, and safety protocols across all its operations. Its compliance management system is designed to ensure that every project meets legal and environmental regulations, providing a framework for accountability and transparency. Central to its approach is a strong safety culture that emphasizes the well-being of its workforce and stakeholders. It actively promotes safety practices through regular training, clear communication, and ongoing assessments of its procedures. To further enhance safety on site, it provides essential safety accessories, including reflector jackets, helmets, and other personal protective equipments, ensuring its teams are well-equipped to minimize risks during operations.

Risks and concerns

Highly dependent on certain key customers: It depends on certain customers who have contributed to a substantial portion of its total revenues. There is no guarantee that it will retain the business of its existing key customers or maintain the current level of business with each of these customers. Reliance on a limited number of customers for its business may generally involve several risks. These risks may include, but are not limited to, reduction, delay or cancellation of orders from its significant customers; failure to renegotiate favourable terms with its key customers; the loss of these customers; all of which would have a material adverse effect on the business, financial condition, results of operations and future prospects of the company.

Geographical concentration: It generates major portion of its sales from its customers situated in Gujarat, Haryana, Uttar Pradesh and Punjab. Such geographical concentration of its business in its top regions heightens its exposure to adverse developments related to competition, as well as economic and demographic changes in these regions which may adversely affect its business prospects, financial conditions and results of operations. It may not be able to leverage its experience in such regions to expand its operations in other parts of India, should it decide to further expand its operations.

Face competition: It operates in a competitive environment. Its competition varies depending on the size, nature and complexity of the project and on the geographical region in which the project is to be executed. It competes against major as well as smaller regional oil and gas infrastructure companies. While service quality, performance, health and safety records and personnel, as well as reputation and experience, are important considerations in client decisions, price is a major factor in most tender awards. There can be no assurance that it can continue to effectively compete with its competitors in the future and failure to compete effectively may have an adverse effect on its business, financial condition and results of operations.

Outlook

Desco Infratech is mainly engaged in providing infrastructure and maintenance services to city gas distribution divisions in India. It engages in activities such as pipeline laying, installation, testing, erection and commissioning for PNG utilized by both domestic and commercial users and in its operation and maintenance services. On the concern side, the major portion of its revenue for the period ended September 30, 2024 and for the financial years ended on March 31, 2024, March 31, 2023 and March 31, 2022, respectively is from public sector undertakings i.e., 46.74%, 73.71%, 66.28% and 71.74%. Such concentration of its business heightens its exposure to adverse developments related to competition, as well as economic and demographic changes in these regions which may adversely affect its business prospects, financial conditions and results of operations.  

The company is coming out with a maiden IPO of 20,50,000 equity shares of Rs 10 each. The issue has been offered in a price band of Rs 147-150 per equity share. The aggregate size of the offer is around Rs 30.14 crore to Rs 30.75 crore based on lower and upper price band respectively. On performance front, the company’s revenue from operations in FY 2023-24 was Rs 2,939.31 lakh as compared to Rs 2,922.21 lakh in FY 2022-23 indicating a growth by 0.59%. Moreover, the Profit after Tax in FY 2023-24 was Rs 345.80 lakh as compared to Rs 122.72 lakh in FY 2022-23.

Meanwhile, it is dedicated to continuously enhancing its operational efficiency. It achieves this by fostering better synergy between departments and stakeholders through effective management control and optimized labor management. Its focus on process improvement involves ongoing skills upgrades to align its team with operational needs. It also instills a strong commitment to quality among all employees, ensuring that everyone contributes to its efficiency goals.

Active Infrastructures

• Active Infrastructures is coming out with an initial public offering (IPO) of 43,00,200 equity shares in a price band Rs 178-181 per equity share.
• The issue will open on March 21, 2025 and will close on March 25, 2025.
• The shares will be listed on SME Platform of NSE.
• The face value of the share is Rs 5 and is priced 35.6 times of its face value on the lower side and 36.2 times on the higher side.
• Book running lead manager to the issue is Kreo Capital.
• Compliance Officer for the issue is Aanchal Tembhre. 

Profile of the company

The company operates primarily in two key segments: Infrastructure and Construction of Commercial Projects. Within the Infrastructure segment, its focus encompasses the construction of roads (including bridges), flyovers, water supply systems, irrigation projects, and other related infrastructure activities and in its Construction of commercial projects segment, it builds various spaces such as, office complexes, retail centers, exhibition halls, retail outlets, private educational institutions, and other facilities.

It operates on a pan-India scale, with its completed, ongoing and upcoming projects being in the state of Maharashtra, Madhya Pradesh, Uttar Pradesh and Tripura. It strives for achieving customer satisfaction in all its projects, without compromising on quality and safety. Its manpower, resources, machinery and equipment, together with its engineering capabilities, strategically positions the company to meet the market demands. It is committed to achieving industry standards in quality, environmental sustainability, and occupational health & safety requirements across all its projects. This helps in ensuring that the company upholds innovation, quality, and client-centered values.

Proceed is being used for:

• Funding working capital requirements. 
• Repayment/ Prepayment of Certain Borrowings availed by the Company and Margin Money for obtaining Bank Guarantee.
• Capital expenditure towards purchase of construction equipments.
• General corporate purposes
• Meeting the issue expenses

Industry overview 

India’s high growth imperative in 2023 and beyond will significantly be driven by major strides in key sectors with infrastructure development being a critical force aiding the progress. Infrastructure is a key enabler in helping India become a $26 trillion economy. The infrastructure sector is a key driver of the Indian economy. The sector is highly responsible for propelling India’s overall development and enjoys intense focus from the Government for initiating policies that would ensure the time-bound creation of world-class infrastructure in the country. The infrastructure sector includes power, bridges, dams, roads, and urban infrastructure development. In other words, the infrastructure sector acts as a catalyst for India’s economic growth as it drives the growth of the allied sectors like townships, housing, built-up infrastructure, and construction development projects.

The Central government has increased its capital expenditure (capex) allocation to $133.9 billion (Rs 11.11 trillion) for the fiscal year beginning April 1, 2024, with a focus on advancing India's infrastructure, as part of a strategic move to stimulate economic growth. An increase of 11.1% from the previous year, the FY25 budget allots $133.9 billion (Rs 11.11 trillion) for capital expenditures, or 3.4% of GDP. 

With a 37% increase in the current fiscal year, capital expenditures (capex) are on the rise, which bolsters ongoing infrastructure development and fits with 2027 goals for India's economic growth to become a $5 trillion economy. In order to anticipate private sector investment and to address employment and consumption in rural India, the budget places a strong emphasis on the development of roads, shipping, and railways. Global investment and partnerships in infrastructure, such as the India-Japan forum for development in the Northeast are also indicative of more investments. These initiatives come at a momentous juncture as the country aims for self-reliance in future-ready and sustainable critical infrastructure.

Pros and strengths

Quality assurance and standards: Its commitment lies in delivering exceptional service to its customers through the construction of high-quality Infrastructure projects and Construction of commercial projects. Thorough quality standards have been its compass from the outset, guiding it throughout the construction process. It meticulously selects the right materials with safe designs of structures, ensuring excellence. These dedicated efforts have not only given it a competitive edge but also earned it goodwill from its satisfied client.

Optimal utilization of resources: The company constantly endeavors to improve its execution process, capabilities, skill upgrading of employees, and modernization of plant and machineries to optimize the utilization of resources. It regularly scrutinizes utilization of its resources and identifies and eliminates bottlenecks and takes corrective measures for smooth and efficient working thereby putting resources to optimal use.

Visible growth through increasing order book: In the construction industry, an order book is considered as one of the key indicators of future performance as it represents a portion of anticipated future revenue and provides a brief list of projects undertaken and to be undertaken by the company. It aims to undertake projects with reasonable margins and/or select projects that help it to enhance its reputation, market penetration and perception. The quality of its construction and the stable alliances with its clients, has enabled it to build its order book.

Risks and concerns

Dependent on third parties for supply of materials: It relies on various materials such as bricks, stones, steel, and cement for its projects, and the cost of these materials depends on commodity prices, which can fluctuate. While it maintains strong relationships with its suppliers, it does not have formal agreements for material procurement. Instead, it chooses suppliers based on price and availability at the time of need. Without contracts in place, its suppliers are not obligated to continue supplying materials to it at specific rates, and they may prioritize its competitors, leading to delays or increased costs.

Geographical concentration: Its entire revenue stream is derived from activities from the states of Maharashtra, Uttar Pradesh and Madhya Pradesh. Any adverse development affecting its operations in these regions could have an adverse impact on its business, financial condition and results of operations. Such geographical concentration of its business in these states heightens its exposure to adverse developments related to competition, as well as economic and demographic changes in these regions which may adversely affect its business prospects, financial conditions and results of operations. it may not be able to leverage its experience in these regions to expand its operations in other parts of India. 

Labour-intensive industry: It operates in a labor-intensive industry, where its contractors rely on casual labour for its projects. In the event of a labour dispute, if its contractors are unable to negotiate successfully with workers or subcontractors, it could lead to work stoppages or increased operational costs. Additionally, finding the necessary skilled labour for current or upcoming projects may be challenging. It may also face liability, penalties, or losses resulting from accidents or damages caused by its workers or contractors. Although it has not experienced any significant disruptions in its business operations due to labour disputes or workforce issues in the past, there is no guarantee that such disruptions won’t occur in the future. Such incidents could negatively impact its business, operational results, and may also divert management’s focus, leading to increased costs.

Outlook

Active Infrastructures operates primarily in two key segments: Infrastructure and Construction of Commercial Projects.  The company is primarily engaged in the business of construction & sale of residential/commercial units and execution of infrastructure projects. On the concern side, the market for its industry is highly competitive due to the presence of both organized and unorganized players. Competitors often strive on factors such as timely delivery, pricing, design quality, construction standards, and project locations. Some rivals may have more industry experience and greater financial, technical, and other resources, allowing them to adapt quickly to market changes and maintain competitiveness.

The company is coming out with a maiden IPO of 43,00,200 equity shares of Rs 5 each. The issue has been offered in a price band of Rs 178-181 per equity share. The aggregate size of the offer is around Rs 76.54 crore to Rs 77.83 crore based on lower and upper price band respectively. On performance front, the company’s revenue from operations has increased by 8.71% to Rs 9,718.33 lakh in the fiscal year ended March 31, 2024 as compared to Rs. 8,939.83 lakh in the fiscal year ended March 31, 2023. Moreover, net Profit after tax has increased by 5.83% to Rs 1,044.55 lakh in the fiscal year ended March 31, 2024 as compared to Rs 986.99 lakh in the fiscal year ended March 31, 2023.

Meanwhile, it intends to focus on performance and timely project execution in order to optimise profit margins. It also intends to integrate best practices from different sectors and geographic regions. It attempts to utilize designs, engineering and project management tools to increase productivity and optimise asset utilization in construction activities. It intends to continue to offer high quality engineering solutions to its clients to improve its ability to execute its projects with efficiency and within the time limit specified by its client.

Rapid Fleet Management Services

• Rapid Fleet Management Services is coming out with an initial public offering (IPO) of 22,84,800 equity shares in a price band Rs 183-192 per equity share.
• The issue will open on March 21, 2025 and will close on March 25, 2025.
• The shares will be listed on SME Platform of NSE.
• The face value of the share is Rs 10 and is priced 18.3 times of its face value on the lower side and 19.2 times on the higher side.
• Book running lead manager to the issue is Gretex Corporate Services.
• Compliance Officer for the issue is Ankita Gupta. 

Profile of the company

Rapid Fleet Management Services is a Chennai based company engaged in the business of providing logistics services tailored to the diverse needs of its B2B and B2C clientele. The company is engaged in road transportation. Its process begins with order booking, followed by route planning to optimize efficiency. Each shipment is carefully matched with an appropriate vehicle, factoring in cargo specifics for safe transit. Whether loading from designated stops or its warehouse, its team ensures goods are secured for the journey ahead. Utilizing GPS, FAST-TAG SIM TRACKING navigation systems, it tracks and monitors every movement, providing real-time updates. Upon arrival at the destination, its unloading procedures guarantee safe delivery. 

It serves a wide array of industries, including but not limited to Tyre, Logistics, Electronics, FMCG, Renewable, Durables, FNB, Chemicals. It prides itself on reliability and adaptability in meeting its clients' transportation needs. It is an ISO 9001:2015 certified service provider who handle client requirements in a professional manner to ensure the highest degree of customer satisfaction. Since inception, it has consistently been providing solutions powered by its own fleet vehicles, guided by a team of dedicated professionals with extensive expertise in logistics.

It secured an opportunity to register itself as a service provider for prominent tire manufacturers in the country, catering to well-established brands. It developed its own Mobile App which is being used for its entire flow of business process. To drive operational efficiency and scale the company’s business for future growth, company has implemented Digitify, an advanced Transport Management System (TMS) that seamlessly integrates with Tally and bank payment APIs. This comprehensive system offers a unified platform to manage crucial aspects such as order matching, order management, vendor management, and vendor risk management.

Proceed is being used for:

• Purchase of vehicles (Goods Carriages)
• Working capital requirements
• General corporate purposes

Industry overview 

The Indian logistics industry is growing, due to a flourishing e-commerce market and technological advancement. The logistics sector in India is predicted to account for 14.4% of the GDP. The industry has progressed from a transportation and storage-focused activity to a specialised function that now encompasses end-to-end product planning and management, value-added services for last-mile delivery, predictive planning, and analytics, among other things. One of the key drivers of this expansion is projected to be the rise of India's logistics industry, which employs 22 million people and serves as the backbone for various businesses. 

The logistics sector in India was valued at $250 billion in 2021, with the market predicted to increase to an astounding $380 billion by 2025, at a healthy 10%-12% year-on-year growth rate. Moreover, the government is planning to reduce the logistics and supply chain cost in India from 13-14% to 10% of the GDP as per industry standards. The industry is crucial for the efficient movement of products and services across the nation and in the global markets. The logistics business is highly fragmented and has over 1,000 active participants, including major local players, worldwide industry leaders, the express division of the government postal service, and rising start-ups that focus on e-commerce delivery

The warehousing and logistics industry in India is a dynamic and rapidly growing sector that is expected to play an increasingly important role in the country's economy. Despite some challenges, the sector is well-positioned for long-term growth and presents exciting opportunities for investors and businesses. With the government's focus on improving infrastructure and the rise of e-commerce, the sector is expected to be a key driver of economic growth in the country. Moreover, with the increasing adoption of technology and the government's push for a digital economy, there is also significant potential for logistics players to leverage data analytics, artificial intelligence, and machine learning to improve operational efficiency and enhance customer experience. There are also opportunities for foreign investment as international companies look to tap into India's growing logistics market.

Pros and strengths

Implementation of an integrated TMS - Digitify Book: Its dedication to delivering reliable professional services is rooted in its belief in the critical role of efficiency and technology. To reinforce this commitment, it has had integrated TMS - Digitify Book, a cutting-edge solution designed to elevate its operational capabilities. This innovative tool enhances its service delivery by streamlining processes, optimizing resource utilization, and ensuring unwavering consistency across all its endeavours.

PAN India transport: Implementing PAN India services is for its business due to its multifaceted advantages. Operating from North to South, East to West, such a comprehensive network ensures reliable deliveries and extensive reach, instilling peace of mind in customers. By forging strategic alliances and maintaining an expansive network, businesses can guarantee efficient transportation solutions that transcend geographical barriers. This approach is particularly crucial for the company as it enables them to cater to diverse industries, offering timely deliveries, optimized routes, and a steadfast commitment to meeting distribution needs.

Dynamic approach to market fluctuations: Its operational strategy revolves around a dynamic approach to market fluctuations, where it meticulously matches truck availability with prevailing rates and service quality standards. Around 35-40% of its revenue is derived from its owned trucks, ensuring a reliable and consistent service offering. Meanwhile, the remaining 60% is generated through market trucks, where it maintains stringent standards of reliability. Notably, it secures 80-90% advance payments during the booking process for market trucks, mitigating financial risks and ensuring seamless operations. Furthermore, its owned truck operations are streamlined through a contractual arrangement with drivers, who are compensated on a trip basis, ensuring operational competence.

Risks and concerns

Dependent on top 10 customers: Its business operations are highly dependent on its top customers, which exposes it to a high risk of customer concentration. Loss of one or more of these customers or a reduction in the amount of business it obtains from them for any reason including due to loss of, or failure to renew existing arrangements; adverse general economic conditions; disputes with such customers; decline in business of such customers; adverse changes in the financial condition of such customers; adverse change in any of such customers’ supply chain strategies; reduction in their outsourcing of logistics operations; or if such customers decide to choose its competitors over the company, could have an adverse effect on its business, results of operations, financial condition and cash flows.

Rely on third party service provider: It depends on third-party service provider to set-up and maintain Digitify TMS which handles the complete lifecycle of full truck operations such as Indent Creation, Indent Matching, Trip Confirmation and Dispatch, Tracking and Monitoring & Proof of Delivery. It cannot guarantee that the supply of these services will not be interrupted. Its business operations could be affected if there is a disruption in the third-party services. It cannot ensure that this third- party service provider would operate within the necessary performance standards or specifications. 

Highly fragmented and competitive industry: It operates in a competitive industry across its business verticals. In particular, the road transport industry is highly unorganized and fragmented in nature, and comprises players providing transportation services, intermediaries, such as transport contractors, booking agents and brokers, and consignors. In the logistics industry, it competes with a variety of local, regional and global logistics service providers of varying sizes, operations and financial resources.

Outlook

Rapid Fleet Management Services is a Chennai based company who provides road transportation logistics services tailored to the diverse needs of its B2B and B2C clientele. Its process begins with order booking, followed by route planning to optimize efficiency. On the concern side, it derives majority of its revenue from the State of Tamil Nadu. Such geographical concentration of its business in this region heightens its exposure to adverse developments related to competition, as well as economic and demographic changes in this region which may adversely affect its business prospects, financial conditions and results of operations.

The company is coming out with a maiden IPO of 22,84,800 equity shares of Rs 10 each. The issue has been offered in a price band of Rs 183-192 per equity share. The aggregate size of the offer is around Rs 41.81 crore to Rs 43.87 crore based on lower and upper price band respectively. On performance front, the company’s revenue from operations increased by 9.54%, from Rs 10,552.33 lakh for the financial year ended March 31, 2023, to Rs 11,558.61 lakh for the financial year ended March 31, 2024. Moreover, Profit After Tax for the year increased by 71.25%, from Rs 471.34 lakh for the financial year ended March 31, 2023, to Rs 807.19 lakh for the financial year ended March 31, 2024.

Meanwhile, it strives towards evaluating opportunities for geographic expansion into new regions or cities with high demand for transportation logistics services. It plans to diversify service offerings to cater to a broader range of industries, cargo types, and customer segments, reducing reliance on specific markets or sectors, keeping in mind prudent risk management strategies to mitigate potential challenges such as infrastructure limitations, regulatory hurdles, and competitive pressures for a balance expansion at India level.

Grand Continent Hotels

• Grand Continent Hotels is coming out with an initial public offering (IPO) of 65,89,200 equity shares in a price band Rs 107-113 per equity share.
• The issue will open on March 20, 2025 and will close on March 24, 2025.
• The shares will be listed on SME Platform of NSE.
• The face value of the share is Rs 10 and is priced 10.7 times of its face value on the lower side and 11.3 times on the higher side.
• Book running lead manager to the issue is Indorient Financial Services.
• Compliance Officer for the issue is Aastha Kochar. 

Profile of the company

The company operates in the mid-scale hotel sector, consisting of the upper-mid priced, mid-priced and economy hotel segments. It seeks to cater to Indian middle-class guests and business travellers and to deliver differentiated yet comfortable service offerings, with a value-for-money proposition. For majority of its hotel properties, it has trademark license agreement/franchisee agreements with Sarovar Hotels and/or Royal Orchid Associated Hotels where through such franchisee partners the Company is able to supplement its sales and marketing efforts and generate leads for those hotel properties. The licensor/franchisee partners are paid a fixed percentage on the gross revenues from such hotel properties. All such properties will be under ‘own brand’ or ‘Co-branded’ with franchisee partners under trademark license agreement /franchisee agreements.

Its Promoter, Ramesh Siva, who is also its Chairman and Managing Director, has decades of experience in the hotel and hospitality industry. The leadership team of the Company has extensive experience in identifying hospitality destinations and securing of hotels under lease considering factors such as Location, economic potential, target customers and branding.

Proceed is being used for:

• Repayment/ prepayment, in full or in part, of certain outstanding borrowings availed by the company.
• Expansion of Hotel properties in India.
• General corporate purpose.

Industry Overview 

India’s hotel industry has witnessed a robust turnaround in demand after the pandemic, led by the rising discretionary spending on tours and travels, revenge tourism, improving economic environment fuelling corporate travels and revival of mega wedding season and other cultural events. The Indian mid-scale hotels segment has emerged as a critical growth driver within the broader hospitality industry, fueled by a combination of rising domestic travel, changing consumer preferences, and increasing disposable incomes. This segment caters to the rapidly growing middle-class and value-conscious travelers, positioning itself between the budget and luxury hotel categories, offering a balance of affordability and comfort.

India’s mid-scale hotels market generated a revenue of Rs 316.3 billion in 2023 and is projected to expand at a CAGR of 9.0% from 2023 to 2029, reaching an estimated revenue of Rs 530.1 billion by the end of the forecast period. As of 2023, the mid-scale hotels market in India offered an estimated 230,000 rooms across both branded and independent properties. This supply is projected to grow at a CAGR of 5.0% from 2023 to 2029, driven by an increasing number of hotel developments and expansions within this category.

The mid-scale hotel segment is experiencing a significant shift as budget-conscious consumers increasingly prioritize trust and reliability in their accommodations. This has led to a growing demand for branded hotels, with many standalone properties converting to established hotel chains. The appeal of branding offers a win-win for both standalone hotels and chains, driving higher occupancy rates and improved Average Daily Rates. Conversions often take place through various models, such as management contracts, where the hotel owner retains ownership while the chain handles operations; franchise agreements, where the chain provides branding and marketing support; or lease agreements, where the owner rents the property to the chain.

Pros and strengths

Premium hospitality offerings in mid-priced segment: Its strength lies in providing premium hospitality experiences within the mid-priced segment. It delivers quality service and elegant accommodations at competitive rates, ensuring that guests receive exceptional value without compromising on luxury. It offers spacious accommodations in prime locations. Its culinary services feature diverse options tailored to customer preferences, maintaining good hygiene standards. Additionally, it provides quick and efficient room service to enhance its guests' experience.

Proven track record of adding value through active asset management: Its hospitality assets are destinations of choice due to their quality, positioning and unique offerings. Its asset management practices are designed to provide an exceptional experience for guests and are driven by comprehensive procedures aimed at improving the operational performance of its assets through increased occupancy rates and revenue generation, as well as enhanced cost efficiencies. It has a dedicated in-house asset management team that collaborates closely with its hotel properties to oversee key operational aspects, such as key procurement, marketing and capital expenditure decisions.

Strategically located properties at prime areas: Its extensive network of properties allows the company to meet the diverse needs of both business and leisure travellers. By acquiring properties in key business districts and popular entertainment hubs, it ensures that guests have easy access to important destinations and activities, minimizing the time they spend commuting. The location of its properties not only enhances the appeal of its hotels to both business and leisure travellers but also boosts its visibility and attractiveness in a competitive market.

Risks and concerns

Franchise/ trademark license agreements with Sarovar/Royal Orchid are non-exclusive: Since its franchise/ trademark license agreements with the Sarovar/Royal Orchid are non-exclusive, it may face the risk of competing hotels operating under the same brand as its hotels in the cities - Tirupati (Andhra Pradesh), Bengaluru (Karnataka), Anjuna (Goa), Hosur (Tamil Nadu), and Secunderabad (Telangana). If such hotels were to start operating in cities where it has hotels under the same franchise/trademark license arrangement, it would undermine its brand differentiation which would have a material adverse effect on its business and financial results. 

Unable to successfully grow business in new geographies in India: It intends to expand its hotel portfolio to new geographies across India, with a focus on geographies which have potential to attract significant traffic from business and leisure travellers including tourist destinations which will cater to the domestic leisure traveller. However, there is no assurance that it will be able to grow its business in these geographies, which may adversely affect its business prospects, results of operations, financial condition and cash flows. Inability to access infrastructure, certain logistical challenges in these regions and its relative inexperience with certain new markets, may prevent the company from expanding its presence in these regions.

Highly competitive: India's mid-scale hotel market is highly competitive, with 40-45 hotel chains operating across the country. Within this broad landscape, 20-25 domestic chains stand out by maintaining a strong presence in both metros and expanding into Tier II & III cities. It competes with large multinational and Indian hotel companies, in each of the regions/locations in which it operates. Competitive factors at each hotel destination include room rates, quality of accommodation, name recognition, service levels and convenience of location, and to a lesser extent, the quality and scope of other amenities and services. Some of its competitors who are hotel owners may operate on a larger scale than it in such destinations or otherwise, or develop alliances to compete against it, or have greater financial and other resources. As a result, it cannot assure that it will be able to compete successfully in the future against its existing or potential competitors, or that its business, cash flows and results of operations will not be adversely affected by increased competition.

Outlook

Grand Continent Hotels operates in the mid-scale hotel sector, consisting of the upper-mid priced, mid-priced and economy hotel segments. It seeks to cater to Indian middle-class guests and business travellers and to deliver differentiated yet superior service offerings, with a value-for-money proposition. On the concern side, it is subject to extensive government regulation with respect to safety, health, environment, real estate, food, excise, property tax and labor laws. Any non-compliance with or changes in regulations applicable to it or failure to obtain, maintain or renew its statutory and regulatory licenses, permits and approvals required to operate its business may adversely affect its business, results of operations, cash flows and financial condition.

The company is coming out with a maiden IPO of 65,89,200 equity shares of Rs 10 each. The issue has been offered in a price band of Rs 107-113 per equity share. The aggregate size of the offer is around Rs 70.50 crore to Rs 74.46 crore based on lower and upper price band respectively. On performance front, the company’s revenue from operations increased by 85.92% from Rs 1,680.15 lakh in the year 2022-23 to Rs 3,123.69 lakh in the year 2023-24. Moreover, after accounting for taxes and share of profit transferred (to) / from minority Interest, the Net Profit is Rs 411.50 lakh in the year 2023-24 compared to Rs 104.87 lakh in the year 2022-23.

Going forward, the company plans to consolidate its hotel properties across Southern India to strengthen its presence in this region. At the same time, it is actively pursuing expansion opportunities in Northern and Western India, focusing on major business hubs and popular leisure destinations. Its goal is to identify and secure key properties in prime locations, which will enhance its market presence and cater to a broader customer base. It is also open to exploring opportunities in Central and Eastern India to ensure a well-rounded geographical footprint.

Paradeep Parivahan

• Paradeep Parivahan is coming out with an initial public offering (IPO) of 45,78,000 equity shares in a price band Rs 93-98 per equity share.
• The issue will open on March 17, 2025 and will close on March 19, 2025.
• The shares will be listed on SME Platform of BSE.
• The face value of the share is Rs 10 and is priced 9.30 times of its face value on the lower side and 9.80 times on the higher side.
• Book running lead manager to the issue is Share India Capital Services.
• Compliance Officer for the issue is Alka Bothra. 

Profile of the company

Paradeep Parivahan is located within Paradip Port and specializes primarily in logistics. It has established itself as excavators, cargo handlers, service providers, and importers and exporters of bulk cargo within ports. It boasts a significant fleet of its own equipment, including Volvo V loaders introduced as early as 1989 in Paradip. At that time, the logistics sector in the city was sluggish due to limited capacity. However, by 2000, the capacity had increased tenfold. It introduced advanced tools and mechanisms in Paradip Port to enhance productivity significantly. This enhancement in productivity directly translates into cost savings for importers and exporters, as it streamlines operations and reduces overheads through its specialized equipment and expertise.

As its operations expanded, it seized opportunities such as partnering with IFFCO, a major player in the market, for heavy machinery services and raw material processing within their plant. Its vision extends beyond mere business operations; it aspires to become a leading entity known for its dedication to addressing domestic energy and industrial raw material shortages. It strives to achieve this through the application of advanced technologies and safe, profitable solutions. It is continually enhancing the company's technological standards by incorporating high-end Heavy Earth Moving Equipment, ensuring it meets the needs of numerous Indian clients engaged in long-term contracts through its Stevedoring and Clearing Services Arm. 

Proceed is being used for:

• Meeting working capital requirements
• General corporate purposes

Industry Overview 

Logistics Industry is crucial to both enterprises and the economy. In today's interconnected world, shipping and logistics are at the heart of the economy, acting as vital gateways for international trade and business. A nation with a strong and effective logistics sector offers an efficient forward and reverse flow of goods and services, which eventually translates to fast-paced growth. The Indian logistics industry includes all inbound and outbound components of the manufacturing and service supply chains. Transport and logistics refer to the procedures involved in the manufacture, storage, inventory, delivery, and distribution of specific commodities or services. The logistics sector in India was predicted to account for 14.4% of GDP in 2022. It is the primary source of income for more than 22 million people. The overall logistics sector in India includes 37 export promotion councils, 40 Participating Government Agencies (PGAs), 20 government agencies, 10,000 goods, and 500 certifications. Between the financial years 2015-16 to 2019-20, India invested approximately $10.2 trillion in the development of infrastructure. The freight movement in India is significantly prejudiced towards road transportation, which transports 66% of goods (in ton-kilometres). This is followed by rail (31%), shipping (3%), and air (1%).

The uneven distribution of modes of transport has resulted in low operational efficiency, causing the GOI to launch a number of logistics-specific programmes, including GatiShakti and the National Logistics Policy. These initiatives seek to improve India's logistics sector by making it more environmentally friendly, agile, transparent, and integrated. The logistics management regimen is capable of overcoming infrastructural disadvantages in the short term while providing cutting-edge competitiveness in the long term. Physical transporters that execute their business processes manually and offline can use various technologies such as AI, Big data, and IoT to improve their service and compete in an international market by delivering real-time and end-to-end connections.

To realise the full potential of the sector, stakeholders such as service providers, customers, and the government of India must work and complement one another. The sector is experiencing significant infrastructural expansion, a stronger emphasis on digitalization, and a larger emphasis on sustainable logistics. The launch of numerous start-ups, as well as the Government's digital initiatives such as 'Make in India,' Unified Logistics Platform (ULIP), and others, are assisting in bringing greater transparency to the logistics sector. The digitization of work processes to enable paperless processing of paperwork and clearances, as well as improved shipment tracking, aids in increasing the pace of goods movement and lowering logistics costs.

Pros and strengths

Robust fleet and infrastructure: The company boasts a well-maintained and efficient fleet of trucks, contributing to reliable and timely delivery services. Strong logistics infrastructure facilitates smooth operations and enables the handling of large cargo volumes

Wide range of logistics services and solutions: The company, being a multimodal transport operator, is capable of offering a wide range of logistics services with focus on creating solutions that address the requirements of its clients. Its range of services involves, cargo handling, port operations, intra-port transportation, and other value-added services, which assist its clients to improve their service levels, reduce cost and ensure better quality, scalability and visibility of their supply chain. This along with a combination of its logistics and transportation network and diversified service portfolio, has made it possible for it to attract and retain clients across various industry segments.

Strategic partnerships: The company is doing strategic collaborations with third-party transportation service providers, expanding service capabilities and ensuring flexibility in meeting customer demands. 

Risks and concerns

Maximum revenue comes from limited customers: The company’s top 10 customers contributed 98.58% and 97.09% of its revenues from operations for the period ended September 30, 2024 and for FY ended March 31, 2024; respectively. Such concentration of its business on few clients may have an adverse effect on its results of operations and result in a significant reduction in the revenue from operations which could also adversely affect its business if it does not achieve its expected margins or suffer losses, from such clients. It cannot assure that it shall generate the same quantum of business, or any business at all, and the loss of business from one or more of them may adversely affect its revenues and results of operations.

Substantial working capital requirements: The company operates in the infrastructure sector, and a significant portion of its current assets does not qualify for bank financing. To secure projects, the company must furnish performance bank guarantees, necessitating the provision of a cash margin. Additionally, clients retain a percentage of the contract value as Retention Money upon project completion. There is high inventory and other current assets days in the company. All these factors contribute to a substantial need for working capital. Any delays in securing the necessary funds could negatively affect its financial performance.

Stiff competition: The company faces competition from competitors operating both within its domestic market and internationally. The effectiveness of its competitive strategy will directly influence its ability to maintain and grow its market share, revenue, and overall business performance. If it fails to compete effectively, whether due to challenges in pricing, service quality, innovation, or other competitive factors. It could have a negative impact on its business operations and financial results. Therefore, navigating this competitive landscape effectively is critical to its long-term success and sustainability. 

Outlook

Paradeep Parivahan is a port service provider specialising in logistics, ship husbandry, and stevedoring. They are located in the Paradip Port, Odisha. With over two decades in the industry, the company has deep knowledge of port operations and cargo handling. The company is operating in major ports and industrial regions across eastern India. On the concern side, the company’s top 10 customers contribute majority of its revenues from operations for the period ended March 31, 2024. Any loss of business from one or more of them may adversely affect its revenues and profitability. Moreover, the company’s business demands substantial working capital, and any delays in securing the necessary funds could negatively affect its financial performance.

The company is coming out with a maiden IPO of 45,78,000 equity shares of Rs 10 each. The issue has been offered in a price band of Rs 93-98 per equity share. The aggregate size of the offer is around Rs 42.58 crore to Rs 44.86 crore based on lower and upper price band respectively. On performance front, the company’s total income for the period ended March 31, 2024, stood at Rs 21,162.03 lakh whereas in Financial Year 2022-23 it stood at Rs 20,280.84 lakh representing an increase of 4.34%. Moreover, the company’s restated profit after tax increased significantly by Rs 846.62 lakh from Rs 655.53 lakh for the FY23 to Rs 1,502.16 lakh in FY24.

The company’s team on the ground has always been sensitized that client interest comes first which eventually leads to a higher & positive output. The growth of the company starts with the idea of its promoter namely Khalid Khan, who has an industry experience of around 23 years. His knowledge and guidance have been instrumental for the growth and development of the company. Further, his knowledge in functions like operations, sales & marketing in the logistics and transportation industry has helped it in establishing and expanding its business. Under the leadership of its promoter and the support of its employees it has evolved itself into a company which is providing freight & forwarding solutions to the customer along with project and heavy-lift logistics solutions involve movements of odd and oversized cargo.

Divine Hira Jewellers

• Divine Hira Jewellers is coming out with an initial public offering (IPO) of 35,37,600 equity shares of face value of Rs 10 each for cash at a fixed price of Rs 90 per equity share.
• The issue opens on March 17, 2025 and will close on March 19, 2025.
• The shares will be listed on NSE SME Platform.
• The share is priced at 9.00 times higher to its face value of Rs 10.
• Book running lead manager to the issue is Horizon Management.
• Compliance Officer for the issue is Jai Dilip Shrimankar.

Profile of the company

Divine Hira Jewellers is engaged in the business of designing and marketing of gold jewelleries. It mainly deals in 22 Karat gold jewellery, offering a wide variety of designs to suit preferences of the end customer. It has the ability to create localised product design mixes to suit various regional tastes. It caters to its customers’ unique preferences, through its understanding of the local and regional market. It provides an extensive range of designs. It is engaged in wholesale of gold jewellery, silver articles, bullions and coins at Mumbai, Maharashtra. Recently, it is also curating and offering exquisite antique gold jewelry that transcends time, bringing the charm of historical artistry into the modern era. Currently, it caters to a large number of wholesalers, showrooms and retailers who buy its products in bulk quantities.

It procures the required gold from bullion dealers and importers. Recently, it is in the process to start importing gold directly. It does not have its own manufacturing facility and it outsources the work of making jewellery and ornaments to various artisans with whom it has developed relationships. It offers a large variety of handcrafted jewellery, which are designed by its in-house designers in close collaboration with skilled local craftsman located across the country. Due to its diversity of clients and the varied regions each of its clients cater to, it has developed an ability to design its jewellery products as per latest trends, fashion and demographic preference of the end customers. It offers a wide range of products from gold jewellery for special occasions such as weddings and festivals to daily wear jewellery for all ages, genders and across various price points. It caters to a variety of customers across mid-market and value market segments and its products are designed by its in-house team of creative designers and also certain freelance designers, allowing it to manage a large and diverse portfolio of designs.

The company primarily sells gold jewelry and its product range includes machine made, handmade & plain gold jewelry like necklace, mangalsutra, chains, malas, rings, pendants, bracelets, bangles, kada, coins and other wedding jewelleries. The designing and job work of its products is done either in house or by third parties on job work basis. Its primary focus has been on purity and commitment.

Proceed is being used for:

• Prepayment or repayment of certain loans availed by the company
• Funding of working capital requirements of the company
• General corporate purposes

Industry Overview

India experienced a significant decline in its gems and jewellery exports by 14.94%, amounting to $32.02 billion in the fiscal year 2023-24 compared to $37.6 billion in the previous year. The gem and jewellery sector saw a decline of 12.17% in rupee terms and 14.94% in dollar terms, totaling Rs. 265187.95 crore and $32.02 billion, respectively. Import figures also reflected a decrease, with a decline of 11.09% in rupee terms and 13.84% in dollar terms, amounting to Rs 184355.48 crore and $22.26 billion, respectively. The export of cut and polished diamonds significantly dropped by 27.58%, totaling $15.96 billion, while imports showed a substantial growth of 46.12%, reaching $1911.0 million. Conversely, gold jewellery exports exhibited a positive growth rate of 16.97%, amounting to $11140.780 million, attributed partly to increased exports facilitated by free trade agreements with UAE and Australia. Silver jewellery exports experienced a notable decline of 45%, while platinum jewellery exports surged by 449.52%. Coloured gemstone exports demonstrated a growth rate of 13.94%, reaching $478.68 million.

For the FY 2023-24, exports of Plain Gold Jewellery grew by an impressive 61.72% to $6792.24 million as compared to $4199.96 million in FY 2022-23. Total Gold jewellery (plain & studded jewellery), which experienced a 10.47% decline between April 2023 to September 2023, rebounded strongly in the latter half of the year, achieving a growth of 46.91%. The UAE emerged as a significant market for plain gold jewellery exports from India, experiencing remarkable growth of 107.2% to reach $4,528.66 million in FY 2023-24, compared to $2,185.67 million in the previous year. Markets of UAE & Bahrain accounted for over 85% of India’s plain gold jewellery exports. Australia also witnessed a growth of 37% in plain gold jewellery exports attributing its growth to the India-Australia ECTA. Gross export of total Gold Jewellery (both Plain & Studded) for the FY 2023-24 grew 16.75% to $11230.18 million over the comparative figure of $9618.80 million for previous year.

In the coming years, growth in the gems and jewellery sector would largely be contributed by the development of large retailers/brands. Established brands are guiding the organised market and are opening opportunities to grow. Increasing penetration of organised players provides variety in terms of products and designs. Also, the relaxation of restrictions on gold import is likely to provide a fillip to the industry. The improvement in availability along with the reintroduction of low-cost gold metal loans and likely stabilisation of gold prices at lower levels is also expected to drive volume growth for jewellers over the short to medium term. India has 450 organised jewellery manufacturers, importers & exporters and is the hub for jewellery manufacturing. These players have benefited greatly due to the increasing liberal policies by the government. The demand for jewellery is expected to be significantly supported by the recent positive developments in the industry. India’s gems and jewellery industry is expected to reach $100 billion by 2027.

Pros and strengths

Wide range of products: The company’s product portfolio consists of wide range of jewellery which differentiate it from local jewellers. Its portfolio offers its customers a wide variety of traditional, Indo-western and modern jewelleries. Its product portfolio includes necklace, mangalsutra, Chains, malas, rings, pendants, bracelets, bangles, kada, coins and other wedding jewelleries and also makes customized jewelleries for weddings and customized designs as per orders.

Hallmarking and unique identification: Each piece of its jewelry is meticulously hallmarked to ensure its authenticity and quality. As part of this process, it assigns a unique HU ID number to every item. This unique identification number guarantees traceability and provides its customers with confidence in the purity and origin of their jewelry. By integrating this hallmarking system, it upholds the highest standards of trust and transparency in its craftsmanship.

Design innovation for customers: The company takes pride in its ability to innovate jewelry designs tailored to its customers’ preferences and needs. Its in-house design team works diligently to create unique and captivating pieces. From initial design concepts to final manufacturing, it provides an end-to-end service that ensures each piece of jewelry is crafted to perfection. This comprehensive approach guarantees that its customers receive exceptional and personalized products, reflecting the latest trends and timeless elegance.

Risks and concerns

Substantial revenue comes from limited customers: The company currently derives its entire operational revenues from sale of gold and silver jewellery in the domestic market. It depends on a limited number of customers for a significant portion of its revenues. The company has garnered 95.51%, 86.98% and 71.07% of its total revenue in FY24, FY23 and FY22 respectively. Any perceived decline in its quality standards, growing competition and any change in demand may adversely affect its ability to retain or acquire customers and consequently affect its financials. It cannot assure that it shall generate the same quantum of business, or any business at all from its top customers, and any loss of business from one or more of them may adversely affect its revenues and results of operations.

Income and sales are subject to seasonal fluctuations: The industry has seasonal increases and decreases in revenues and profitability, corresponding with weddings and festivals. The company’s sales have historically exhibited certain seasonal fluctuations, reflecting higher sales volumes on festivals and other occasions such as Durga Puja, Akshay Tritiya, Dhanteras, Diwali and Christmas which occur in the third and fourth quarter of the fiscal year. This period also coincides with the wedding season in India. While it stocks certain inventory to account for this seasonality, its fixed costs such as employee salaries, Office operating costs and logistics-related expenses, which form a significant portion of operating costs, are relatively constant throughout the year. Consequently, lower than expected net sales during the third or fourth quarters of the fiscal year or more pronounced seasonal variations in sales in the future could have a disproportionate impact on its operating results for the fiscal year, or could strain its resources and impair its cash flows.

Geographical constrain: The company’s operations are based out of limited region like Maharashtra, Karnataka, Gujrat and Chhattisgarh. Exposure to projects in new geographies may not be as profitable as its current geographies. Its geographic concentration may have a material adverse effect on its business, results of operations and financial condition. Further, it derives a significant portion of its revenue from a limited number of customers. As its business is currently concentrated to a selected number of geographies, any adverse development with such customer, including as a result of a dispute with such major customers, may result in it experiencing significant reduction in its cash flows and liquidity. If its customers are able to fulfil their requirements through any of its existing or new competitors, with better services and / or cheaper cost, it may lose significant portion of its business.

Outlook

Divine Hira Jewellers specializes in designing and marketing premium 22 Karat gold jewelry. The company caters to wholesalers, showrooms, and retailers with a diverse range of gold jewelry that combines traditional artistry with modern elegance. It has established brand presence and attracts both wholesalers and retailers. It has portfolio of 22 Karat gold jewelry: necklaces, bangles, chains, rings, pendants, and wedding collections. On the concern side, the substantial portion of its revenues is dependent on few customers and the loss of, or a significant reduction in purchases by any one or more such customers could adversely affect its financial performance. Moreover, the company operates in limited geographies for a significant portion of its revenue and also depends on limited number of customers for its revenue from operations. Projects in new geographies may not be as profitable as in existing geographies.

The company is coming out with an IPO of 35,37,600 equity shares of face value of Rs 10 each for cash at a fixed price of Rs 90 per equity share to mobilize Rs 31.84 crore. On performance front, revenue has decreased 25.64% from Rs 24,644.59 lakh in the fiscal year ended March 31, 2023 to Rs 18,325.61 lakh in the fiscal year ended March 31, 2024. The decrease in revenue was on account of decrease in sale of bullion and silver products as these products were of low margin, and the aim was to focus on high margin products. Moreover, the net profit has increased 62.41% from Rs 91.22 lakh in the fiscal year ended March 31, 2023 to Rs 148.17 lakh in the fiscal year ended March 31, 2024. 

The company’s marketing personnel regularly participate in exhibitions and trade fairs where they come across various new designs. These designs are forwarded to its in-house designers who improve upon it according to latest trends and requirements. Its in-house designers also come up with their own designs and ideas which are showcased to its regular customers. The customers in the jewellery world are discerning, knowledgeable and demanding. It brings innovative ideas and designs to its customers on a regular basis. The company intends to continue to add new designs to its jewellery portfolio by regularly participating in exhibitions and trade fairs. Recently, it is also curating and offering exquisite antique gold jewelry that transcends time, bringing the charm of historical artistry into the modern era. It intends to expand the antique gold jewellery segment by targeting new retail showrooms and wholesalers. This would help it in expanding its customer base thus leading to higher revenues and better margins.

PDP Shipping & Projects

• PDP Shipping & Projects is coming out with an initial public offering (IPO) of 9,37,000 equity shares of face value of Rs 10 each for cash at a fixed price of Rs 135 per equity share.
• The issue opens on March 10, 2025 and will close on March 12, 2025.
• The shares will be listed on BSE SME Platform.
• The share is priced at 13.50 times higher to its face value of Rs 10.
• Book running lead manager to the issue is Sun Capital Advisory Services.
• Compliance Officer for the issue is Vijay Kumar Jha.

Profile of the company

PDP Shipping & Projects was incorporated as a private limited company in 2009 and converted into a public limited company in 2015. The company’s primary business is providing services of logistic and transport. The company is providing end-to-end solutions in the logistics & transport industry as a Multi Modal Transport Operator (MTO), sea and air freight transportation, custom clearance services and value added services in Logistics industry. It is an accredited Authorized Economic Operator (AEO) providing end to end logistics services and licensed by the Directorate General of Shipping, Government of India to work as a MTO and a Customs Broker, Licensed by Mumbai Customs, Department of Revenue of Government of India. It is into business of providing services of International Freight Forwarding and global end to end transportation solutions and offering specialized services in project logistics (including super heavylift super Over Dimension Cargo (ODC) handlings, floating & beaching roll on - roll off (RoRo) loadouts, sea towing operations, sea fastening and other engineering solutions in project cargo and transportation).

It handles the transport of cargo worldwide which are of various shapes, sizes, and weights via sea, air, road, rail, coastal barges, or through multi-modal transportation. It accepts cargo as Full Container Load (FCL), Less than Container Load (LCL), breakbulk (i.e. handling and transporting cargo that does not fit into standard shipping containers), ODC, heavy lift and project cargo.

It is into business segment of providing services of logistic and transport. It is providing services of international freight forwarding, air freight, sea freight including documentation, customs clearance, packaging, warehousing, and distribution, pre-carriage, onwards carriage, cargo tracking, port or Container Freight Station (CFS) operations & ocean freight services, custom broker, project cargo, sea towage, breakbulk, heavy lifts including RoRo loadouts, spreading weight techniques, making suitable temporary jetties & RoRo ramps, route survey & reinforcements of transit roads - bridges-vessels, structural calculations - stowage - sea fastening designing, multi modal transportation. Its core specialty is handling pre-defined project transports dynamics, heavy lifts, over dimensional cargo, offshore cargo & heavy engineering transportations, integrated logistics solutions, time-bound shipments, temperature-critical cargo, exhibition cargo, door-to-door services etc.

Proceed is being used for:

• Part funding long-term working capital requirement
• General corporate purposes

Industry Overview

Logistics and transportation Industry is crucial to both enterprises and the economy. In today's interconnected world, shipping and logistics are at the heart of the economy, acting as vital gateways for international trade and business. A nation with a strong and effective logistics sector offers an efficient forward and reverse flow of goods and services, which eventually translates to fast-paced growth. The Indian logistics industry includes all inbound and outbound components of the manufacturing and service supply chains. Significant factors that will increase the demand for India's logistics sector include the country's anticipated GDP growth of $26 trillion by fiscal year 2048 ($6 trillion by 2030) and its objective to accelerate merchandise exports to $1 trillion by 2030. This would open a huge opportunity for India's transport and logistics sector, which is expected to increase at a CAGR of 4.5% from 2022 to 2050, reaching 15.6 trillion tonnes kilometres. The Indian transport and logistics business is expected to be around Rs 13-16 lakh crore ($156.18-192.23 billion) in 2022. By 2030, India wants to lower its logistics expenditures from 13-14% of GDP to 8-10% of the GDP.

It is projected that a 10% reduction in indirect logistics costs is expected to result in a 5% to 8% increase in exports. According to the Logistics Performance Index (LPI) of the World Bank, India has climbed six positions to reach the position of 38th rank out of 139 nations. The improvement is attributed to a variety of factors, including technological advancement, data-driven decision-making, and legislative initiatives targeted at promoting world-class infrastructure. The National Logistics Policy (NLP) and the PM Gati Shakti programme are significant overarching policy moves taken by the central government in this area to deliver outcomes by 2024-25.

Increasing investment and cargo traffic point towards a healthy outlook for the Indian ports sector. Providers of services such as operation and maintenance (O&M), pilotage and harbouring and marine assets such as barges and dredgers are benefiting from these investments. The capacity addition at ports is expected to grow at a CAGR of 5-6% till 2022, thereby adding 275-325 MT of capacity. Domestic waterways have found to be a cost-effective and environmentally sustainable mode of freight transportation. The government aims to operationalize 23 waterways by 2030. As part of the Sagarmala project, more than 574 projects worth Rs. 6 lakh crore ($82 billion) have been planned for implementation between 2015 and 2035. In Maritime India Summit 2021, the Ministry of Ports, Shipping and Waterways identified a total of 400 projects worth Rs. 2.25 lakh crore ($31 billion) investment potential.

Pros and strengths

Integrated, end-to-end logistics services and solutions: The company provides integrated, end-to-end logistics service solutions that address the requirements of its clients. Use of integrated, end-to-end solutions from a single third-party logistics service provider, which results in cost efficiencies for its clients, which in turn encourages them to use its services. It also provides its clients with value-added services such as packaging & dunnage, arranging fumigation, securing cargo during transportation and custom clearance. Its business development and solutions are dedicated to, and specialize in, designing customized integrated logistics solutions for its clients, which have helped improve service levels, cost, quality, scalability and visibility of its clients’ supply chain. This integrated approach allows it to exploit network and infrastructure synergies, reduces its dependence on any single business line and also reduces the effect of cyclicality in its customers’ businesses on its operations.

Large existing network: The company has tapped markets across the countries by establishing a relationship through its network with international companies through network group and associates. It has created a network through its reliable service providers and vendors. Its ability to develop mutually beneficial business relationship with large international players has enabled it to further expand its reach outside India by leveraging its global networks without having to establish any of its overseas offices and without incurring any additional fixed costs. Apart from these companies, over the years it has established a strong relationship with the shipping lines, airlines and port authorities. These airlines, shipping companies, transporters and other vendors are crucial to its business. By maintaining its good relationship with them, it is able to procure space on board on priority basis and on commercially feasible terms. This network also helps it to negotiate favourable commercial terms and operational advantages for its clients during high demand and peak load times.

Existing client relationship: The company constantly tries to address its customer needs relating to various services that it provides. Its existing client relationships help it to get repeat business from its customers. This has helped it to maintain a long-term working relationship with its customers and improve its customer retention strategy. Its large client-base across various industry verticals has enabled it to cross-leverage the know-how and best practices that it has acquired from its experience with a set of clients across a wider spectrum of clients.

Risks and concerns

Significant revenue comes from limited customers: The company derived a significant portion of its revenues from a limited number of customers. The company has garnered 97.80%, 96.73% and 95.88% of its total revenue from top 10 customers in FY24, FY23 and FY22 respectively. Any decline in its quality standards, growing competition and any change in the demand for its services by these customers may adversely affect its ability to retain them. The company cannot assure that it shall generate the same quantum of business, or any business at all, from these customers, and any loss of business from one or more of them may adversely affect its revenues and profitability.

Geographical constrain: The company provides international freight forwarding services and derives a portion of its revenue from international operations. Its overseas revenue from operation to total revenue from operation ratio has been 39.74%, 61.04%, 28.04% and 8.28%, for the period ended November 30, 2024 and the Financial Years ended March 31, 2024, March 31, 2023 and March 31, 2022, respectively. Its majority of overseas business operations and overseas revenue are in and from Brazil. Out of total Revenue from Brazil to total overseas revenue ratio has been 74.83%, 97.17%, 95.56% and 53.46% for the period ended November 30, 2024 and the Financial Years ended March 31, 2024, March 31, 2023 and March 31, 2022, respectively. A natural calamity, economic slowdown or any disruption in Brazil may hinder it from conducting its business operations in Brazil, economically and otherwise. Due to such factors, it may experience pronounced adverse effects on its results of operations, financial condition and cash-flows than if it were further diversified across different overseas geographical locations.

Does not have long-term work orders from its customers: The company typically enters into short-term work orders. Within the duration of these work order, the scope of services can vary depending upon the requirements of its customers. Therefore, it needs to seek new requirements or cross-sell its service offerings when its current services are completed or terminated with existing customers, and secure new customers in order to expand its business. Similarly, there is no assurance that customers availing its services will look to obtain further services from it or expand their relationship to avail its other offerings. Further, if its customers shift their business for the services it offers to its competitors, or if it is unsuccessful in retaining them by offering competitive rates and favourable contract terms, its business, financial condition, cash flows and results of operations may be adversely affected.

Outlook

PDP Shipping & Projects provides end-to-end logistics solutions, including sea/air freight, customs clearance, and project logistics. As an Authorized Economic Operator (AEO), the company offers global cargo transportation via sea, air, road, rail, and multi-modal options. The company has integrated, end-to-end logistics services and solutions with large existing network. On the concern side, the company derives a significant portion of its revenues from a limited number of customers. The loss of any significant clients may have an adverse effect on its business, financial condition, results of operations, and prospects. Moreover, most of its overseas revenue from operations are in and from a single country - Brazil. Due to this geographic concentration of its overseas business operations, its results of operations and growth might be restricted to the economic and demographic conditions of Brazil.

The company is coming out with an IPO of 9,37,000 equity shares of face value of Rs 10 each for cash at a fixed price of Rs 135 per equity share to mobilize Rs 12.65 crore. On performance front, revenue from operations had decreased by 8.74%, from Rs 2,248.19 lakh in Fiscal 2023 to Rs 2,051.60 lakh in Fiscal 2024. This decrease in revenue was on account of a sharp fall in global ocean freight rates with respect to previous year, which impacted its revenue from operations. The company’s profit after tax had increased by 37.57% from Rs 168.19 lakh in the Fiscal 2023 to Rs 231.39 lakh in Fiscal 2024. 

The company intends to aggressively penetrate in the domestic and international markets and expand its market presence by expanding its service and distribution network. It will continue to work with domestic and international merchants to grow its cross-border businesses and broaden its service offerings in international markets. It targets to further penetrate its existing markets and expand into other regions. It intends to add branch offices as well as increase the depth of its existing network in due course of time. It plans to drive its international business growth by forming new business alliances and forging more candid relations with all active business associations. It also aims to expand its business and cover new geographic locations with the help of its marketing team. It intends to cater to the increasing demand of its existing customers by enhancing the distribution and supply reach in different parts of the world by adding competent human capital.