Infonative Solutions

• Infonative solutions is coming out with an initial public offering (IPO) of 31,28,000 equity shares in a price band Rs 75-79 per equity share.
• The issue will open on March 28, 2025 and will close on April 3, 2025.
• The shares will be listed on SME Platform of BSE.
• The face value of the share is Rs 1 and is priced 75 times of its face value on the lower side and 79 times on the higher side.
• Book running lead manager to the issue is Share India Capital Services.
• Compliance Officer for the issue is Shakshi.

Profile of the company

Infonative Solutions is principally engaged in business of developing and designing of e-learning Content and services and courseware & other product including providing cloud-based learning management system (LMS) etc. In the year 2014, the company started modestly, operating from a small, 10-seater office at the bustling IT hub of Delhi at Nehru Place, New Delhi. Within a year, the dedication and hard work paid off. Infonative Solutions outgrew its initial space and moved into a larger, 50-seater office, reflecting the company’s rapid growth and increasing client base. The expansion was not just physical; it marked the beginning of Infonative Solutions’ journey towards becoming a significant player in the e-Learning industry. In 2018, Infonative Solutions made a strategic move that set the stage for future success by Investing in Mindscroll, a leading LMS software. This investment was a game-changer, enabling Infonative to offer a comprehensive suite of eLearning solutions that integrated cutting-edge technology with innovative educational methodologies.

Currently, the company is engaged in crafting Bespoke e-Learning Solutions, Learning Consulting and Courseware & Off the Shelf content including Learning Management Systems. It provides cutting-edge e-learning Delivery services designed to enhance business impact for clients. Its team of learning professionals assists the world’s top Companies in revolutionizing their training functions. These services not only reduce costs and add measurable value but also amplify business impact, enabling customers to reallocate resources and focus on their core business operations.

Proceed is being used for:

• Meeting the expenses for development of new products, courses and new features in LMS and purchase of laptop
• Meeting the working capital requirements
• Meeting out the expenses for General corporate purposes and unidentified acquisitions

Industry overview 

E-learning, which stands for electronic learning, refers to acquiring knowledge, skills, or training through electronic or digital mediums, typically delivered via the Internet or computer networks. It consists of several forms of educational content, including online courses, virtual classrooms, digital resources, and interactive multimedia materials. LMS market is poised for significant growth, driven by technological advancements, the need for flexible learning solutions, and the increasing importance of continuous education and training in both academic and corporate settings. The current demand for LMS in the market is substantial and continues to grow rapidly. 

The India e-learning market was valued at $10.24 billion in 2023 and is projected to reach $28.46 billion by 2029, growing at a CAGR of 18.57% during the period. The adoption of e-learning in India has witnessed significant growth over the past few years. Owing to the proliferation of affordable smartphones and widespread internet access, e-learning has become more accessible to learners across urban and rural areas, thus driving the market.

The rise of eLearning has made it possible to learn at anytime, anywhere. By embracing technologies like AI, ML, and IoT, eLearning institutions and companies are adapting their pedagogies for online teaching and providing these cutting-edge courses through the digital medium for a fraction of the cost. The e-Learning sector’s potential to close the learning gap in the future appears to be quite promising given the trajectory of its expansion.

Pros and strengths

Scalable business model: Its business model (eLearning business) is inherently scalable due to its digital nature, which allows for easy expansion without the significant manpower and Infrastructure costs and logistical challenges associated with traditional Instructor led learning methods. Once an eLearning platform or course is developed, it can be delivered to a virtually unlimited number of users across different geographies simultaneously. The content can be updated, replicated, and distributed at minimal additional cost, making it possible to reach a global audience efficiently. Furthermore, advancements in cloud computing, mobile technology, and internet connectivity have further enhanced the scalability of eLearning by enabling access to educational resources anytime and anywhere. This scalability allows eLearning businesses to rapidly grow their user base and revenue while maintaining high levels of service and content quality.

Commitment to meeting market needs: The company is aiming to create a comprehensive range of professional upskilling courses and training programs which includes Softskill, Selling Skill, Anti Bribery, Business Consulting, Cyber Security, Artificial Intelligence, Content Writing and Data Science through a distinct brand Mindscroll. These educational offerings are designed to help busy professionals to learn high demand skills, develop a strong demonstrable track record & access international as well as domestic remote jobs and freelance work. Some of the popular courses cover subjects like Time Management, Excel Dashboarding, Project Management, Cyber Crime, Cyber Security, Email writing skills, Insurance, Selling Skills, POSH, Anti Money Laundering, GDPR etc.

Expanding the off the shelf library: Recognizing that the demand for off-the-shelf content is growing, Infonative Solutions sets ambitious goals for the future. The company aims to continuously expand its content library to meet the evolving needs of the eLearning market. Plans include creating new courses, adding new topics, updating existing materials to keep them current, and incorporating advanced learning technologies such as virtual reality and gamification.

Risks and concerns

Rely on information technology systems: It heavily relies on the performance, reliability, and security of its tech enabled platform and technology infrastructure, as well as its service providers that facilitate and process transactions. Its information technology systems serve a vital role in managing both the customer-facing front-end interface and digital mobile applications, as well as the back-end operations that support its internal enterprise-wide digital systems, client integration, document management etc. Any disruption in its information technology systems could have adverse effects on its operations and reputation.

Working capital requirement: The company’s working capital requirement was Rs 184.77 lakh and Rs 150.53 lakh for the financial years ended March 31, 2023 and March 31, 2022 respectively. In case there are insufficient cash flows to meet its working capital requirement or it is unable to arrange the same from other sources or there are delays in disbursement of arranged funds, or it is unable to procure funds on favourable terms, at a future date, it may result into its inability to finance its working capital needs on a timely basis which may have an adverse effect on its operations, profitability and growth prospects.

Delays and/or defaults in customer payments: It may be exposed to payment delays and/or defaults by its customers. Its financial position and financial performance are dependent on the creditworthiness of its customers. As per its business model, it supplies its services and products directly to its customers. Delays in payments from customers may require the company to make a working capital investment. If a customer defaults in making its payments on an order on which the company has devoted significant resources, or if an order in which the company has invested significant resources is delayed, cancelled or does not proceed to completion, it could have a material adverse effect on the company’s results of operations and financial condition.

Outlook

Infonative Solutions is engaged in crafting Bespoke e-Learning Solutions, Learning Consulting and Courseware & Off the Shelf content including Learning Management Systems. It provides cutting-edge e-learning Delivery services designed to enhance business impact for its clients. On the concern side, it operates in a competitive atmosphere. Some of its competitors may have greater resources than those available to the company. It competes with organized and as well as unorganized players in the industry, who may have better financial position, market share, product ranges, human and other resources. There are no entry barriers in its industry which puts it to the threat of competition from new entrants.

The company is coming out with a maiden IPO of 31,28,000 equity shares of Rs 1 each. The issue has been offered in a price band of Rs 75-79 per equity share. The aggregate size of the offer is around Rs 23.46 crore to Rs 24.71 crore based on lower and upper price band respectively. On performance front, the company’s total revenue has decreased by 13.72% from Rs 2095.16 lakh in the financial year ended March 31, 2023 to Rs 1807.80 lakh in the financial year ended March 31, 2024, primarily due to decrease in the revenue from operations. Moreover, the company recorded an increase of 35.70% in profit after tax from Rs 106.87 lakh in financial year ended March 31, 2023 to Rs 145.02 lakh in financial year ended March 31, 2024.

Given the ongoing growth of technology and the evolving needs of its clients, it is committed to expanding into new sectors with innovative and forward-thinking ideas. Historically, it has concentrated on serving enterprises that are heavily focused on technology and information, leveraging its strong capabilities in e-learning. To build on this foundation, it now plans to diversify its business activities by entering new domains, including product development, training, and capacity building. By expanding its offerings to include these areas, it aims to cater to a broader range of client needs and deliver its services more comprehensively. Its goal is to become a full-service provider, capable of supporting its clients throughout the entire process chain, from initial concept to final execution.

Spinaroo Commercial 

• Spinaroo Commercial is coming out with an initial public offering (IPO) of 19,94,000 equity shares of face value of Rs 10 each for cash at a fixed price of Rs 51 per equity share.
• The issue opens on March 28, 2025 and will close on April 3, 2025.
• The shares will be listed on BSE SME Platform.
• The share is priced at 5.1 times higher to its face value of Rs 10.
• Book running lead manager to the issue is Finshore Management Services.
• Compliance Officer for the issue is Ankita Periwal.

Profile of the company

The company is engaged in manufacturing of Aluminium Foil Container, Aluminium Home Foil, Paper Cups, Paper Plates, Paper Bowls, Semi Processed Material for Paper Cups viz. paper coating, printing, blanking etc. It also deals in wide range of Paper Cup related Machinery like High-Speed Paper Cup Making Machine, Flexo Printing Machine, Automatic Roll Die Cutting Machine etc. with full end to end support.

The company offers a wide range of products made from superior-quality raw materials sourced from its highly reliable vendors. Under the guidance of experienced professionals, these products are manufactured to ensure exceptional performance and premium quality. In addition to delivering quality products, it provides these products at competitive prices and ensure timely delivery, tailored to meet its clients' precise specifications. Its paper cup making machines are procured from reputable and trusted vendors within the industry, who ensure the highest quality standards. These certified vendors utilize state-of-the-art machines and tools to manufacture products that meet specific client requirements. They are well-versed in understanding and fulfilling the unique demands of its customers.

The company has established two manufacturing facilities, both located within the Jalan Industrial Complex. The first facility is situated at Gate-1, Right Lane-6, P.O. Jangalpur, Begri Gram Panchayat, Kolkata, Howrah, and also serves as its registered office. The second facility is located at Gate-1, Right Lane-3, within the same industrial complex. Having both manufacturing units in close proximity within the same complex is highly advantageous, providing it with significant cost-efficiencies both logistically and commercially. This setup allows for streamlined operations and effective resource management. Its manufacturing facilities are equipped with the necessary tools, machineries, other equipment’s and amenities, to support a seamless manufacturing process, hassle-free production, Quality testing, storage and packaging. All its machineries are periodically upgraded and lubricated with experienced personnel so as to retain production rate.

Proceed is being used for: 

• Meeting the Working Capital Requirements
• General Corporate Purposes

Industry Overview

Packaging currently stands as the fifth largest sector in the Indian economy, reflecting its pivotal role in driving industrial growth and innovation. With an annual growth rate of 22-25%, the industry has become a preferred hub for packaging solutions, bolstered by advancements in technology and infrastructure. Notably, the industry boasts a robust structural framework, comprising over 900 paper units with an installed capacity of nearly 4,990 thousand tons. Furthermore, India is home to 861 paper mills, with 526 operational units, showcasing the nation's significant capacity for paper and paperboard production. The government's progressive policies, including permitting 100% FDI through the automatic route, have stimulated foreign investments in the packaging sector. FDI inflows in the Paper and Pulp industry totalled $ 1.71 billion from April 2000 to March 2024, highlighting investor confidence in India's packaging landscape. Innovative ventures, such as SIG's establishment of the first aseptic carton packs in Ahmedabad, underscore the industry's commitment to technological advancements and sustainability. With plans to invest Rs. 880 crores ($ 106.02 million) between 2023 and 2025, SIG exemplifies the industry's drive towards pioneering solutions.

The India paper cups market size reached 22.7 billion Units in 2023. The market is projected to reach 28.7 billion Units by 2032, exhibiting a growth rate (CAGR) of 2.64% during 2023-2032. The rising application in social and public gatherings, increasing demand for cost-effective and sustainable solutions, and the growing environmental concerns represent some of the key factors driving the market. Paper cups, also known as disposable cups, are made from bleached virgin paper pulp and coated with plastic and wax to prevent liquid from soaking through the paper and leaking. They are also coated with polyethylene, which aids in enhancing their durability and performance by controlling the condensed moisture from absorbing in and retaining the original flavor of the product. At present, the rising consumption of beverages among consumers represents one of the key factors supporting the growth of the market in India. Besides this, the growing demand for disposable packaging in quick service restaurants (QSRs) and fast-food chains to reduce leakage and spillage of beverages is offering a positive market outlook in the country. Additionally, there is a rise in the need for sustainable and environment friendly solutions among the masses. This, coupled with the increasing demand for paper cups as they easily decompose in the environment and do not add to landfill wastes or pollute water bodies, is propelling the growth of the market. 

Pros and strengths

Strategic advantage of dual manufacturing units within same industrial complex: The company operates two manufacturing units within the same industrial complex, providing significant strategic advantages in terms of production capacity and logistics. This proximity allows it to efficiently scale up production during peak demand periods, ensuring that it meet increased customer requirements without compromising on delivery timelines. Additionally, the ample space provided by these two facilities gives it sufficient room for both production and storage. It can manage inventories and finished goods effectively, allowing it to capitalize on market opportunities during high business seasons. The close proximity of the units further enhances its logistics, reducing transportation time and costs between facilities, ensuring smooth coordination of operations, and optimizing resource allocation. This setup positions it to be highly responsive to market fluctuations while maintaining operational efficiency. 

Innovation and efficiency through a dedicated R&D team: The company's success is driven in part by the efforts of its Research and Development (R&D) team, whose innovative approach has enabled it to expand its product line and optimize production processes. With their expertise, it has successfully introduced the manufacturing of paper plates alongside its existing machinery, despite the requirement for specialized equipment. Their forward-thinking solutions have also allowed it to offer a wide range of new designs for both paper cups and plates, keeping pace with the evolving tastes and preferences of its customers. In addition to product innovation, its R&D team has played a critical role in enhancing its operational efficiency. 

Establishing long-term client relationships and driving repeat business: The company has built a strong reputation in the industry, securing repeat orders from many prominent clients, even amid rising competition. This success stems from its unwavering commitment to understanding and addressing the unique needs of each client. By consistently delivering on expectations, it has cultivated long-lasting relationships that not only enhance client satisfaction but also strengthen its client retention strategy. These established relationships serve as a key competitive advantage, enabling it to attract new clients and grow its business. The experience it gains from executing current orders continually enhances its understanding of client requirements. This insight allows it to evaluate the scope of future businesses and assess associated risks more effectively. It deeply values the trust its clients place in it and remain dedicated to not only meeting but exceeding their expectations. This focus on quality service and relationship-building helps solidify its position as a trusted partner in the industry, contributing to its long-term success. 

Risks and concerns

Maintains high level of inventory for uninterrupted production activities: The company’s requirement of maintaining inventory is high when compared to other companies in the same industry. Maintaining such high level of inventory requires extensive investments in working capital and strains its financial resources. Further, stocking high inventory may also lead to risks of scrapping of raw material, decay due to time, wear and tear. It continues to assess and maintain inventory level strategically giving importance to both operational and financial performance. The results of operations of its business are also dependent on its ability to effectively manage its inventory and stocks. To effectively manage its inventory, it must be able to accurately estimate customer demand and supply requirements and manufacture new inventory accordingly. If its management has miscalculated expected customer demand it could adversely impact the results by causing either a shortage of products or an accumulation of excess inventory. 

Geographical concentration: The company carries its manufacturing operations from its manufacturing facility located at West Bengal. Due to the geographical concentration of its manufacturing operations in these locations, its operations are susceptible to local, regional and environmental factors, such as social and civil unrest, regional conflicts, civil disturbances, economic and weather conditions, natural disasters, demographic and population changes, and other unforeseen events and circumstances. Such disruptions could result in the damage or destruction of a significant portion of its manufacturing abilities, significant delays in the transport of its products and raw materials, loss of key managerial personnel, and/or otherwise adversely affect its business, financial condition and results of operations. Its Productions were disrupted due to natural calamity such as Amphan cyclone and Covid in the past. 

Do not have long-term contracts with clients: The company does not have any long-term contracts with its clients and any change in the business pattern of its existing clients could adversely affect the business of the company. As a result, its customers can terminate their relationships with it due to a change in preference or any other reason on immediate basis, which could materially and adversely impact its business. Consequently, its revenue may be subject to variability because of fluctuations in demand for its products and services. The company's customers have no obligation to work with it and may either cancel, reduce, or delay the business. The business by the company's customers is dependent on factors such as the customer satisfaction with the level of service that the company provides, fluctuation in demand for the company's products, customer’s inventory management, amongst others. Although it has satisfactory business relations with its clients and has received continued business from them in the past, there is no certainty that the same will continue in the years to come and may affect its profitability. 

Outlook

Spinaroo Commercial is engaged in manufacturing of aluminium home foils, aluminium containers, paper cups, paper plates and paper bowls. Its raw materials for paper cups, plates, and bowls are of the highest quality, ensuring superior end products. It sources sustainable, food-grade paperboard that offers excellent strength and rigidity. These materials are carefully selected for their smooth surface, which allows for high-quality printing and coating adhesion. Its raw materials meet strict safety standards, making them ideal for food contact applications. They are also engineered to optimize production efficiency, reducing waste and improving cost-effectiveness for manufacturers. It also sells raw materials (semi-finished) for Papers cups, plates and bowls after certain processing and modification. On the concern side, the company operates in the highly competitive industry. There are no entry barriers in its industry which puts it to the threat of competition from new entrants. Besides, as a labour-intensive business, it depends heavily on its workforce to ensure smooth production and manufacturing processes. Any disruptions, such as strikes, lockouts, or industrial action, could have a considerable negative impact on its financial health, operational efficiency, and reputation.

The company is coming out with an IPO of 1994000 equity shares of face value of Rs 10 each for cash at a fixed price of Rs 51 per equity share to mobilize Rs 10.17 crore. On performance front, the total revenue consist of revenue from operation and other income has decreased to Rs 4121.31 lakh in FY 2023-24 from Rs 5319.30 lakh in FY 2022-23 i.e. total revenue decreased by Rs 1197.99 lakh (22.52% for the said period) primarily due to decrease in revenue from manufacturing activities of the company. The restated Profit after Tax for FY 2023-24 has been increased to Rs 140.05 lakh (3.40% of total income) as against Rs 93.06 lakh (1.75% of total income) in the FY 2022-23. 

Meanwhile, to bolster the production of the company’s aluminium products, specifically Aluminium Home Foils and Aluminium containers, it is imperative to strategically source raw materials which is primarily Aluminium reels. The company plans to utilize a portion of the proceeds from this IPO to procure aluminium reels from countries i.e. Thailand and also from other countries wherever it finds a competitive pricing. It intends to explore new opportunities within its existing Aluminium foil and paper cup/plate/bowl business by developing innovative products and designs that align with evolving consumer preferences. By broadening its product offerings, it will further enhance the diversification of its business, allowing it to cater to the varied needs of different customer segments. 

Aten Papers & Foam

• Aten Papers & Foam is coming out with an initial public offering (IPO) of 33,00,000 equity shares in a price band Rs 91-96 per equity share.
• The issue will open on March 28, 2025 and will close on April 2, 2025.
• The shares will be listed on SME Platform of BSE.
• The face value of the share is Rs 10 and is priced 9.1 times of its face value on the lower side and 9.6 times on the higher side.
• Book running lead manager to the issue is Swastika Investmart.
• Compliance Officer for the issue is Neha Munot. 

Profile of the company

The company operates as an important intermediary in the Paper Product Supply Chain. As a crucial middleman in the paper product supply chain, it procures paper from different paper mills and resell them to clients in the packaging products industry. Examples of these products include Kraft Paper and Duplex Board. It also purchases Wastepaper from stockiest and sell them to Paper mills which is crucial raw material for such mills. A wide range of grades, thicknesses, widths, and standards are available in its product portfolio for Kraft papers and Duplex boards and other according to customer specifications. 

The paper products manufactured by its customers have a variety of end use applications and are used mainly in the packaging industry. It sells papers in the domestic markets specially in the state of Gujarat. It attributes its growth to the expertise and dedication of its management team. Their extensive experience of more than two decades, they play a pivotal role in guiding its strategic decisions and daily operations. its Promoters, Mohamedarif Mohamedibrahim Lakhani and Amrin Lakhani, with their deep knowledge, vision, and industry insight, have been instrumental in shaping and executing its growth strategies. Their leadership has allowed it to adapt to evolving market demands and successfully expand its business.

Proceed is being used for:

• Capital expenditure
• Meeting working capital requirements
• General corporate purposes 

Industry overview 

India was one of the first countries to invent paper for sale. Papermaking became an important small job in middle India, making good paper for use inside India and to sell outside. Indian paper was brought to places like Arabia, Indonesia, and Europe in the early Middle Ages. The paper packaging industry experienced growth over the last decade, owing to substrate choice changes, new market expansion, ownership dynamics, and government initiatives to ban plastic. Sustainability and environmental issues continue to be emphasized, and various innovations catering to paper and paper board packaging are expected to drive market growth in India.

The India Paper and Paperboard Packaging Market size is estimated at $12.87 billion in 2024, and is expected to reach $17.74 billion by 2029, growing at a CAGR of 6.63% during the forecast period (2024-2029). The paper industry in India produces 5% of the world's total paper. India accounts for about 5% of the global paper market. The market will be worth about $8 billion by 2022. India is the 15th largest paper producer in the world. The paper production increased by 67,100 tons in January 2023. During April 2022-January 2023, the paper production increased by 6.7%.

India's paper and packaging sector has a bright future ahead of it, thanks to the nation's expanding urbanization, increased disposable income, and expanding population. The need for packaging materials is increasing due to the quick growth of e-commerce, and the industry is being forced to come up with greener solutions as sustainability becomes more and more of a priority. It is anticipated that government programs like ‘Make in India’ and infrastructure development projects would increase manufacturing and improve supply chains.

Pros and strengths

Variety of products: It provides a one stop shop to its clientele for their customized paper product supply needs. As a trading company, it is in a position to always provide the latest products collected in house for its customers and also conduct market expansion activities for its suppliers. Its continuous effort and belief in maintaining a healthy relationship with its suppliers ensures adequate inventory at any point. It procures, stock and supply a diverse and multi-application range of papers and paper products to satisfy the growing requirements of customers. It procures various types of paper from Paper Mills, which are used for varied purposes including Packaging and Printing, which inter-alia includes retail mono packaging boxes and shipper carton manufacturing.

In-house Logistics: It has its own in-house commercial vehicles which facilitates door-to-door delivery service to its customers, in order to minimise transportation costs by providing effective material handling system. It owns four commercial vehicles for this purpose. Transportation mainly includes carrying the products from the paper mills and delivering them to the customers. At times, when needed, it also outsources its transportation-to-transportation agencies.

Ready stock: Stock capacity plays an immensely important role in the paper market. It is stock capacity that one stores that can determine the level of growth. At the Company it is always stock and supply pattern that is followed. It keeps ready stock of all the paper, it deals in all the sizes and GSMs with the required amount of quality at its respective warehouse which helps it stays at a stable position throughout the year and also helps it in serving its customers with timely delivery of orders.

Risks and concerns

Dependent on few numbers of customers: Its top ten customers contribute 36.68%, 34.62%, 28.00% and 28.20% of its total sales for the period ended on September 30, 2024 and for the year ended on March 31, 2024, March 31, 2023 and March 31, 2022 respectively. Moreover, 7.88%, 17.04%, 11.30% and 10.54% of its total revenue is from related parties / group companies /entities. All transactions with related parties entered into by the Company in past were at arm’s length basis, in compliance with applicable provisions of Companies Act, 2013. The company is engaged in the business of paper trading. 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. 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. 

Maximum sale generated from Gujarat: For the period ended on September 30, 2024 and for the year ended March 31, 2024, March 31, 2023 and March 31, 2022 sales within the state of Gujarat was 97.90%, 99.18%, 99.86% and 99.59% respectively of its total revenue from operations. It anticipates continuing to expand its sales efforts in this region. However, this high concentration in Gujarat exposes it to increased competition, as existing and potential competitors may intensify their focus on this market to capture a larger share. This heightened competition, along with other adverse developments such as economic, political, or demographic changes, could significantly impact its market share and overall business performance. Consequently, any negative event affecting its sales in Gujarat could materially harm its business prospects, financial condition, and operational results.

Working capital requirements: It operates as an important intermediary in the Paper Product Supply Chain. As a crucial middleman in the paper product supply chain, it procures paper from different paper mills and resell them to clients in the packaging products industry. The business of the company is working capital intensive. The successful operation of its business heavily relies on significant working capital, which is essential for various aspects, including financing project operations, inventory management, and the purchase of raw materials of proposed processing Units. However, changes in credit terms and payment delays can adversely impact its working capital, resulting in lower cash flows and increased funding requirements. Inadequate financing of its working capital needs may arise due to several factors, such as delays in disbursements under financing arrangements, higher interest rates, increased insurance costs, or borrowing and lending restrictions. Such circumstances could have a material adverse effect on its overall business, financial condition, and prospects.

Outlook

Aten Papers & Foam operates as an important intermediary in the Paper Product Supply Chain. As a crucial middleman in the paper product supply chain, it procures paper from different paper mills and resell them to clients in the packaging products industry. It also purchases Wastepaper from stockiest and sell them to Paper mills which is crucial raw material for such mills. A wide range of grades, thicknesses, widths, and standards are available in its product portfolio for Kraft papers and Duplex boards and other according to customer specifications. On the concern side, it is dependent on third party transportation providers for supply of its products to its customers. Any failure on the part of such service providers to meet their obligations could have a material adverse effect on its business, financial condition and results of operation.

The company is coming out with a maiden IPO of 33,00,000 equity shares of Rs 10 each. The issue has been offered in a price band of Rs 91-96 per equity share. The aggregate size of the offer is around Rs 30.03 crore to Rs 31.68 crore based on lower and upper price band respectively. On performance front, the company’s total revenue from operations for the year ended on FY 2023-24 was Rs 9,679.82 lakh as compared to Rs 9,099.72 lakh during the FY 2022-23. Revenue from Operations mainly includes revenue from trading of papers. Moreover, the profit after tax Increased to Rs 278.10 lakh in FY 2023-24 from Rs 50.26 lakh in the FY 2022-23.

Meanwhile, the company, currently engaged in the paper trading business, is excited to announce its plans to expand operations by setting up wastepaper processing units. This strategic move will mark its entry into wastepaper processing, which will serve as a key raw material supply for its trading activities. It plans to invest around Rs 425.00 lakh to purchase requisite machineries for setting up waste paper processing Units. These units will enhance its supply chain efficiency and sustainability by providing a reliable source of processed wastepaper.

Retaggio Industries

• Retaggio Industries is coming out with an initial public offering (IPO) of 61,98,000 equity shares of face value of Rs 10 each for cash at a fixed price of Rs 25 per equity share.
• The issue opens on March 27, 2025 and will close on April 2, 2025.
• The shares will be listed on BSE SME Platform.
• The share is priced at 2.5 times higher to its face value of Rs 10.
• Book running lead manager to the issue is Gretex Corporate Services.
• Compliance Officer for the issue is Nayan Mehta.

Profile of the company

Retaggio Industries is a Jewellery manufacturing company with a strong presence and experience in catering to B2B segment of the industry. It specializes in the production and sale of a wide range of jewellery products, including gold jewellery, diamond jewellery, precious stones, and other fancy jewellery and bullion in the form of coins and bars. Jewellery manufacturing is the process of designing and creating jewellery, including rings, bangles, necklaces, bracelets, earrings, and other types of decorative pieces. It specializes in crafting heritage and high-end jewelry pieces, emphasizing craftsmanship and unique designs. Jewellery manufacturing is a skilled trade that requires experience, attention to detail, and creativity. Mass-produced jewellery is often made using automated processes, while custom-made jewellery is crafted by hand and may take longer to produce. The quality of the final product is largely dependent on the skills of the manufacturer, and it is passionate about crafting beautiful, high-quality jewellery that tells a unique story. Right from the initial design phase to the final product, every step of the manufacturing process is carefully planned and executed to create pieces that are both stunning and durable. It also has display centre at its registered office.

Its talented team of designers starts by sketching out ideas for new pieces of jewellery, drawing inspiration from nature, history, and the latest fashion trends. Once a design is finalized, it uses state-of-the-art technology to create a 3D model of the piece, allowing the company to refine every detail before it goes into production. It might have a signature style or aesthetic that sets it apart from other jewellery manufacturers, such as a focus on natural materials like wood or stone, or a commitment to using sustainable and eco-friendly materials and processes. The company might also be known for its customer service, with a focus on helping each customer find the perfect piece of jewellery to suit their style and budget. Using the 3D model, it creates a wax or resin model of the jewellery piece, which is used to create a mold. The mold is then used to cast the piece in the desired metal, such as gold, silver, or platinum.

Proceed is being used for:

• Repayment/Prepayment of certain debt facilities
• Working capital requirements

Industry Overview

As of January 2022, India’s gold and diamond trade contributed around 7% to India’s Gross Domestic Product (GDP). The gems and jewellery sector has employs around 5 million. Based on its potential for growth and value addition, the Government declared the gems and jewellery sector as a focus area for export promotion. The Government has undertaken various measures recently to promote investment and upgrade technology and skills to promote ‘Brand India’ in the international market. The Government has permitted 100% FDI in the sector under the automatic route, wherein the foreign investor or the Indian company do not require any prior approval from the Reserve Bank or the Government of India. 

India’s gems and jewellery market size was at $78.50 billion in FY21. Growth in exports is mainly due to revived import demand in the export market of the US and the fulfilment of orders received by numerous Indian exhibitors during the Virtual Buyer-Seller Meets (VBSMs) conducted by GJEPC. In FY24, India's gems and jewellery exports were at $22.27 billion, a 14.94% decline compared to the previous year's period. Exports of gems & jewellery at stood at $2.54 billion in September 2024.

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.

Pros and strengths

Product quality & timely delivery: It has a set of standards for itself when it comes to timeliness and the quality of service it provides to its customers. The stringent systems ensure that all the products reach its customers on the stipulated time and there are minimum errors to ensure reduced product rejection. Its quality service has earned the company goodwill from its customers, which has resulted in customer retention and order repetition. It has also helped the company to add to its existing customer base. It has developed an internal procedure of checking the client orders at each stage from customer order to delivery. 

Wide product range: Its wide range of product offerings caters to diverse customer segments, from the value market to high-end customized jewellery. Its product profile includes traditional, contemporary and combination designs across jewellery lines, and price points. Its focus on design and innovation, its ability to recognize consumer preferences and market trends, the intricacy of its designs and the quality and finish of its products are its key strengths.

Timely fulfilment of orders: Timely fulfilment of the orders is a prerequisite in its industry. The company has taken various steps in order to ensure adherence to timely fulfilment and also to achieve greater cost efficiency at its existing unit. The company constantly endeavors to implement an efficient business process so as to ensure cost efficiency in procurement.

Risks and concerns

Changes in consumer preferences and fashion habit: The demand for its products is based on its strength in identification of the latest trends and its continued ability to offer products that are acceptable to the consumers. If consumer preferences change due to shifts in consumer demographics, national, regional or local economic conditions, change in trend and fashion which it is not able to adapt, its consumers may begin to seek alternative options, which would adversely affect its financial results. If it is unable to procure products to successfully meet changes in fashion and trends, its business and financial condition may be materially and adversely affected.

Geographical concentration: The major portion of its revenue for the half year ended on September 30, 2024 and for the financial year ended on March 31, 2024 is from only one city of Maharashtra. 80.22 % of Revenue for the half year ended on September 30, 2024 and 59.39 % for the financial year ended on March 31, 2024 were from the state of Maharashtra. Such geographical 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. Factors such as competition, culture, regulatory regimes, business practices and customs, industry needs, transportation, in other markets where it may expand, its operations may differ from those in which it is currently offering. 

Face competition: The market in which the company is doing business is highly competitive on account of both the organized and unorganized players. Players in this industry generally compete with each other on key attributes such as technical competence, distribution network, pricing and timely delivery. Some of its competitors may have longer industry experience and greater financial, technical and other resources, which may enable them to react faster in changing market scenario and remain competitive. Moreover, the unorganized sector offers their products at highly competitive prices which may not be matched by us and consequently affect its volume of sales and growth prospects. Growing competition may result in a decline in its market share and may affect its margins which may adversely affect its business operations and its financial condition.

Outlook

Retaggio Industries is a Jewellery manufacturing company with a strong presence and experience in catering to B2B segment of the industry. It specializes in the production and sale of a wide range of jewellery products, including gold jewellery, diamond jewellery, precious stones, and other fancy jewellery and bullion in the form of coins and bars. On the concern side, fluctuation in prices, non-availability or high cost of quality of gold, silver, diamonds and other precious and semi-precious stones may have an adverse effect on its business, results of operations and financial condition. Further, its business is dependent on its continuing relationships with its customers. The company neither has any long-term contract with any of customers nor has any marketing tie up for its products

The company is coming out with an IPO of 61,98,000 equity shares of face value of Rs 10 each for cash at a fixed price of Rs 25 per equity share to mobilize Rs 15.50 crore. On performance front, the company’s revenue from operations is Rs 2,327.83 lakh for the financial year 2023-24 as compared to Rs 2,306.59 lakh for the financial year 2022-23 representing an increase of 0.92% on account of expansion of business. The profit after tax increased by 8.13% to Rs 334.11 lakh for the financial year 2023-24 from Rs 308.99 lakh for the financial year 2022-23.

Meanwhile, it is focused on establishing and increasing its manufacturing facilities as this will allow it to exercise control over manufacturing costs and the quality of the finished products. Additionally, it intends to enhance the brand recognition of its services through its presence in major cities. It does market through traditional channels such as word of mouth and intend to do other marketing as well. Its marketing and advertising initiatives shall be directed to increase brand awareness, acquire new customers, drive customer traffic across its retail channels and strengthen its brand recall value.

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.