Electronics Mart India (EMI) DRHP Findings 💡
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KYI - Know Your IPO ✅
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1/n
About EMI -
- 4th largest Indian consumer durable and electronics retailer
- 1,830 employees
- Largest player in Southern region in revenue terms with dominance in Telangana and AP
- They plan to expand into new geographies in the future.
- Geographical Presence
About EMI -
- 4th largest Indian consumer durable and electronics retailer
- 1,830 employees
- Largest player in Southern region in revenue terms with dominance in Telangana and AP
- They plan to expand into new geographies in the future.
- Geographical Presence
2/n
- While opening new stores, they follow a cluster-based approach that leads to the concentration of the business in a relatively small area rather than a widespread presence.
- While opening new stores, they follow a cluster-based approach that leads to the concentration of the business in a relatively small area rather than a widespread presence.
3/n
Products -
- 6,000 SKUs.
- Large & small appliances, mobiles, IT products, etc from 70+ consumer durable and electronic brands
- As of Aug 15, 2021, they had 99 stores (88 MBOs and 11 EBOs) across 31 cities / urban agglomerates spanning 0.99 mn sq. ft.
Products -
- 6,000 SKUs.
- Large & small appliances, mobiles, IT products, etc from 70+ consumer durable and electronic brands
- As of Aug 15, 2021, they had 99 stores (88 MBOs and 11 EBOs) across 31 cities / urban agglomerates spanning 0.99 mn sq. ft.
4/n
Few Facts -
- Revenue generated from mobiles in FY21 constituted 34% of total revenue
- Online sales in FY21 constituted 1.5% of total revenue
Few Facts -
- Revenue generated from mobiles in FY21 constituted 34% of total revenue
- Online sales in FY21 constituted 1.5% of total revenue
5/n
Issue Details -
- Not much is known on the pricing or the issue size but the fresh issue part is known at Rs 500 Cr.
Objectives of Fresh issue money -
- Funding of Capital Expenditure
- Funding Working capital
- Debt payment of 50 cr
Covid Impact - (Img 3)
Issue Details -
- Not much is known on the pricing or the issue size but the fresh issue part is known at Rs 500 Cr.
Objectives of Fresh issue money -
- Funding of Capital Expenditure
- Funding Working capital
- Debt payment of 50 cr
Covid Impact - (Img 3)
6/n
Shareholding & Acquisition Price -
Risks -
- 86.3% of total purchases from top 10 suppliers in FY21
- Competition from online retailers
- Brand Concentration - Top 5 brands revenue was 65% of total revenue in FY21
- 91.4% of total sales from AP + Telangana
Shareholding & Acquisition Price -
Risks -
- 86.3% of total purchases from top 10 suppliers in FY21
- Competition from online retailers
- Brand Concentration - Top 5 brands revenue was 65% of total revenue in FY21
- 91.4% of total sales from AP + Telangana
7/n
Financials -
- FCF Not good
- Wafer-thin margins
- Business of electronics retailing (No moat. Reliance Retail, Croma, Vijay Sales, regional players, etc, are there!)
- Capital intensive business
Financials -
- FCF Not good
- Wafer-thin margins
- Business of electronics retailing (No moat. Reliance Retail, Croma, Vijay Sales, regional players, etc, are there!)
- Capital intensive business
8/n
Peer Comparison -
Biggest electronic Retailers of India by No. of Stores -
Reliance Retail - 400+
Croma - 150+
Vijay Sales - 110
Sathya - 135
Electronics Mart India - 99
Girias - 98
Here's how they stack up on various parameters 👇
Peer Comparison -
Biggest electronic Retailers of India by No. of Stores -
Reliance Retail - 400+
Croma - 150+
Vijay Sales - 110
Sathya - 135
Electronics Mart India - 99
Girias - 98
Here's how they stack up on various parameters 👇
9/n -
Conclusion -
Post-IPO, debt will be still there for the company. It also faces stiff competition from Reliance, Croma, etc. Not to forget the online threat and the private label manufacturing too.
Once Pricing comes in, we will update this with our view.
Conclusion -
Post-IPO, debt will be still there for the company. It also faces stiff competition from Reliance, Croma, etc. Not to forget the online threat and the private label manufacturing too.
Once Pricing comes in, we will update this with our view.
10/n
Industry -
CRISIL estimates the size of India's consumer durables industry, including large consumer durables mobile phones, and smaller appliances, at Rs 2.4 trillion as of FY21.
It is expected to log 13-15% CAGR during fiscals 2021-2026 to reach Rs 4.5-5 trillion.
Industry -
CRISIL estimates the size of India's consumer durables industry, including large consumer durables mobile phones, and smaller appliances, at Rs 2.4 trillion as of FY21.
It is expected to log 13-15% CAGR during fiscals 2021-2026 to reach Rs 4.5-5 trillion.
11/n
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