Crayons Advertising is planning to raise Rs. 41.80 crore through its IPO. The IPO will open on May 22, 2023, and close on May 25, 2023. The company is offering 64.30 lakh equity shares at a price band of Rs. 62-65 per share. The shares of the company will be listed on the NSE EMERGE platform. Crayons Advertising is a leading integrated marketing and communications agency in India. The company has a strong track record of success and a team of experienced professionals.
IPO opens
May 22, 2023
IPO Closes
May 25, 2023
IPO Size (Rs.)
₹41.80 Cr
IPO Size (shares)
6,430,000 shares
Breakup
entirely Fresh issue
Face Value:
₹ 10
IPO Price in Rs :
₹62 to ₹65 per share
Minimum Lot
2000
Listing At
NSE SME
QIB Quota
<= 50% of Net Issue
NII Quota
<= 15% of Net Issue
Retail Quota
<= 35% of Net Issue
Lead Manager
Corporate Capitalventures Pvt Ltd
Registrar
Skyline Financial Services
Market Maker
Ss Corporate Securities
.
Anchor Investors
Crayons Advertising is an integrated marketing and communications agency.
It was founded in 1986 and is headquartered in Mumbai.
Crayons Advertising has a team of over 200 employees. The company is now operating through 5 (five) offices located at New Delhi, Mumbai, Chennai, Kolkata, Lucknow.
The company provides high-end ecosystem and end-to-end ad-tech communication solutions platform for advertising media services consisting of print media, electronic media, outdoor media services which covers advertisement modes such as newspapers, brochures, magazines, television channels, FM channels and display of outdoor hoardings etc.
The promoters of the Company are Mr. Kunal Lalani, Mrs. Vimi Lalani and M/s Vimi Investments and Finance Private Limited.
Crayons Advertising offers a wide range of services, including:
Brand strategy
Creative development
Media planning and buying
Public relations
Event management
Digital marketing
Social media marketing
Crayons Advertising has worked with a wide range of clients, including:
Airtel
Coca-Cola
Ford
Hyundai
L’Oréal
Pepsi
P&G
Reliance
Samsung
Tata
Crayons Advertising IPO: Financials
Particulars/ Rs. Lacs
31-Dec-22
31-Mar-22
31-Mar-21
31-Mar-20
Revenue (total income)
20,374.52
19,404.97
10,661.22
16,367.65
Total Expenses
18,617.94
19,169.65
10,631.68
16,187.09
Profit / (Loss) before tax
1,756.58
235.32
29.54
180.56
Profit after Tax
1267.08
161.34
12.97
116.57
Share Capital
1800
225
225
225
Net Worth
4,991.03
3,723.95
3,562.61
3,549.64
Earnings per share Basic and Diluted
7.04
0.9
0.07
0.65
Net Asset Value per Equity Share*4 (in ₹.)
27.73
20.69
19.79
19.72
Total borrowings
– Long Term
179.94
352.42
952.59
1336.76
– Short Term
635.68
608.15
580.27
191.4
Post issue Share Capital
2443.00
FV
10
IPO price
65
EPS FY22
0.66
PE Fy22
98.42
EPS Fy233 (ann)
6.92
PE Fy23 (ann)
12.53
Market cap in Lacs
15880
Market Cap/sales (ann)
0.82
sales cagr
18%
net profit cagr
144%
Salient Points
The Indian advertising market was valued at nearly INR 670 billion in 2020. The market is further expected to grow at a CAGR of 11% during the forecast period of 2022-2027 to reach INR 1253.2 billion by 2026. The Indian advertising market will remain the fastest-growing in the world over the next two years, a new report by Dentsu International, said. It is expected to have a growth rate of 16 per cent in 2022 and ad spending that will increase by 15.2 per cent in 2023 and 15.7 per cent in 2024.
Crayons Advertising offers a wide range of services and has worked with a wide range of clients.
Crayons Advertising has delivered hundreds of stories in the form advertising campaigns across various media in the past 36 years. It has impressive list of High-end clients.
It has created some very effective campaigns for both the Government of India as well as the private sector. Some of our notable campaigns are ‘Desh Ki Mitti’ for Kajaria, ‘Wings of Change’ for TATA Air India and the global launch of the ‘Incredible India’ campaign.
Some of the brands it has helped with their digital campaign are: State Bank of India * Indian Oil * Tata Sons * NSDC * Air India * BPTP * Som Distilleries * Bank of Baroda * APL Apollo Steel Pipes / CPVC Pipes * Incredible India *Madhya Pradesh Tourism *Assam Tourism *Uttar Pradesh Tourism * Arunachal Pradesh Tourism *Kajaria Ply * Kerovit by Kajaria * FitBit * JK Tyres * Pee Safe * Adani Realty *Department of Financial Services (Ministry of Finance) * Punjab Grill * Nissan Motors * Social Home Inc. *Indian Bank *MSDE *Swatch Lacoste, Herohomes, Estee Lauder, Balmain, Hugo Boss, Vatika. etc.
Strong track record of success
Experienced team of professionals
Crayons Advertising has won numerous awards for its work, including:
The Abby Awards
The Effie Awards
The Cannes Lions International Festival of Creativity
The D&AD Awards
The One Show
The company intends to utilize the Net IPO Proceeds for the following objects
Sr. No.
Particulars
Amount (In ₹. Lakh)
1.
Funding of working capital requirements of the Company
1452.46
2.
Capital expenditure on infrastructure and cutting-edge technology for expansion
1529.50
3.
General Corporate Purposes ( <= 25% of amount raised)
Remaining
Majority of state wise revenue contributed was from Delhi i.e 64.42%, 61.03%, 37.72% and 55.02% of our revenues for the period ended December 31, 2022 and for the year ended March 31, 2022, 2021 and 2019. Larger contracts from Delhi represent a larger part of the portfolio
Company has been Debarred by Government of Bihar, Information and Public Relations Department.
The company wants to leverage state of the art technology and build a film and editing studio to further solidify its content capabilities in house. It also aims to build an animation studio.
The fresh IPO amounts to 26.32% of the Post paid equity share capital of the company.
It has availed term loans from Indian Bank and CSL Capital Private Limited.
A Comparison with the listed peers mentioned in its RHP is depicted below:
Particulars/Rs. Cr
fv
cmp
revenues
NP
PE
ronw
Mcap
Mcap/Sales
Crayons Advertising *
10
203.00
12.67
12.53
4.33
159
0.78
.Affle (India) Limited
2
915
1,434.00
145
49.8
18.5
12,194
8.50
Vertoz Advertising
10
243
83
11
26.4
17.3
291
3.51
Pressman Advertising
2
86.8
164
4.12
49.5
9.9
204
1.24
* 9m figutes
Its PE ratio is 43x (fy22 earnings) and 7.45x (fy23 ). There has been a big jump in revenues and profits in FY22-23. Company appears to be on the growth path.
I intend to apply in Crayons Advertising IPO. The company appears on a sound wicket to me.
SME IPO are more volatile and risky.
Corporate Capitalventures Pvt Ltd is the lead manager to the issue. The IPOs lead managed by them include Droneacharya Aerial Innovations Limited , Phantom Digital Effects Limited, Annapurna Swadisht Limited, Swastik Pipe Limited, Uma Exports Limited etc . They had a good run on the bourses.
SS Corporate Securities is the market maker for the Crayons Advertising IPO. I had earlier handled Vels Film International Limited IPO.
GMP as reported on social media has been inching up and may be more than Rs. 50.
Please do your own diligence as SME IPOs are more volatile and risky than mainboard IPOs and need more funds.
Standard disclaimer: I am not a SEBI registered analyst and above analysis is for educational purpose only. Iam a postgraduate in engineering & Management . Also Certified in some exams like NISM-Series-V-A: Mutual Fund Distributors Certification, NISM-Series-X-A: Investment Adviser (Level 1) Certification and NISM-Series-X-B: Investment Adviser (Level 2) Examination. This post is my view on the subject matter and is only academic and exploratory in nature. It is not meant to influence investment decisions of investors. I may have bias/vested interest in covered Stock/Mutual Funds/NCD etc. due to my own investment or leaning. Further my understanding of the areas on which I write may be imperfect or incomplete and data could be wrong due to limited time and resources at my disposal. Please do your own due diligence as stock market/MF investments have high degree of inherent risk.
