Kundan Edifice Limited is entering the primary market and will be listed on NSE SME platform. The IPO opens on September 12, 2023, and closes on September 15, 2023. The basis of allotment will be finalized on 21st September 2023 and the refunds will be initiated on 22nd September 2023. Shares will be credited to the demat accounts on September 25, 2023. The stock is scheduled to list on September 26.
- Issue Opens on: Tuesday, September 12, 2023
- Issue Closes on: Friday, September 15, 2023
- Face Value: ₹ 10 per equity share
- Fresh Issue (Size): ₹ 25.22 crore
- Fixed Price Band: ₹ 91
- Market Lot Size: 1200 Equity Shares
- Minimum Bid Required: Rs 1,09,200
- Credit to Demat: September 25, 2023
- Listing Date: September 26, 2023
- Listing on: NSE SME Platform
Shares are of the face value of ₹10 aggregating up to ₹25.22 crores. It is entirely a fresh issue with no offer for sale (OFS) component in the IPO from promoters and other shareholders. It is a fixed price IPO and priced at ₹91 per share. The minimum order quantity is 1200 Shares. The fresh issue portion of the IPO entails the issue of 27,71,429 shares which at fixed IPO price is worth ₹25.22 crore. Since there is no OFS component, the fresh issue size of ₹25.22 crore will also be the size of the overall IPO of the company.
The minimum lot size for the IPO investment is 1,200 shares as such a retail investor can invest a minimum of ₹1,09,200 (1,200 x ₹91 per share) in the IPO. That is also the maximum that the retail investors can invest, however, HNI / NII investors can invest a minimum of 2 lots comprising of 2,400 shares. There is no upper limit on what the QIBs as well as what the HNI / NII investors can apply for.
The company intends to utilize the net proceeds from the issue towards the funding of the incremental working capital requirements and General corporate purposes. Cameo Corporate Services Limited is the registrar for the IPO. The company has apportioned the net IPO equally between the retail investors and the non-retail investors which predominantly comprise of the HNI/ NII investors may be to a lesser extent of some select QIB investors also.
About the Company
Kundan Edifice is engaged in the business operations of manufacturing, assembly, and sale of light-emitting diode (LED) strip lights. It is primarily an original design manufacturer (ODM). The company also provides custom products. The company designs, develops, manufactures, and supplies products to its dedicated customers who then further distribute these products under their own brands. The company also works with them to develop, manufacture, and supply products that are designed by its customers. In fact, many of the large brands also avail the services of the company.
Kundan Edifice has over 6 years of experience in the electronics manufacturing services sector. It has positioned itself as a one-stop solution for all lighting needs. The solution offered to clients includes tech info clarity, drawing design, sample for confirmation, production trails, actual production, branding, packaging, and all relevant logistics management. The products manufactured by Kundan Edifice Ltd find application in areas like cove lighting, profile lighting, car interiors, car exteriors, two-wheelers, indoor decorations, festival decorations, signages, back-lit panel for outdoor advertising, outdoor decorations, underwater lighting, decoration of building facades, lighting for construction demarcation, neon flex lights and other decorative lights and articles.
A Huge Range of Products
The company products list includes HV Flex- High voltage flex, LV Flex- Low voltage flex, RGB LV Flex (Smart Lights), and Accessories Kit. The company has two manufacturing and assembly facilities in the state of Maharashtra located in Vasai and Bhiwandi. As of April 30, 2023, Kundan Edifice employs over 277 employees in its manufacturing facilities, including contract workers.
Financial Performance
In the nine months period ended December 31, 2022 and FY2022, 2021, and 2020, it derived approximately 45.20 per cent, 65.31 per cent, 62.27 per cent, and 36.68 per cent respectively, of its restated revenues from operations from repeat customers (defined as customers from which it has had revenues in the past three fiscal years). In FY 2022, the company enjoyed relationships of over three years with 5 out of these top ten customers.
| Details | FY23 | FY22 | FY21 |
| Total Revenues | ₹62.89 cr | ₹32.47 cr | ₹15.14 cr |
| Revenue growth | 93.69% | 114.46% | 134.16% |
| Profit after tax (PAT) | ₹6.25 cr | ₹1.68 cr | ₹0.77 cr |
| Net Worth | ₹7.67 cr | ₹2.98 cr | ₹1.30 cr |
Source: Company DRHP (FY23 is 9 months annualized)
Promoters
Kundan Edifice Ltd. was promoted by Divyansh Gupta and Vijaya Gupta while Mallika Gupta and Shubhang Gupta are part of the promoter group. The promoter holding, including the promoter group, stands at 99% pre-IPO, which post the fresh issue of shares, will be diluted.
& the Many Pluses
- The company over the last 3 years, has been consistently doubling its sales each year.
- The demand for LED lightings is quite high.
- Net margins has improved last FY and stabilized at around 10% which is almost double from the previous year.
- Ideally at a price of Rs 91, the EPS of 8.35 indicates that IPO is available at a P/E of around 9, which is an attractive range.
- It has shown good traction in the grey market which right now is Rs 38 which gives a broad idea of a good listing, almost a listing premium of 37.36 per cent over the listing price. However it all depends upon the market situation on the listing day.
