Essen Speciality Films IPO an NSE SME issue entails to raise ₹66.33 crore and comprises of a fresh issue of about ₹50.28 crore. and an OFS portion of ₹16.05 crore. Essen Speciality Films manufactures and exports specialized plastic products predominantly in the home furnishing and the home improvement segments. The shares will list on the NSE emerge Platform.
Essen Specialty Films Ltd was incorporated in 2002.
It manufactures and exports specialized plastic products predominantly in the home furnishing and the home improvement segments.
It is a manufacturer and exporter of specialized plastic products in the home improvement and home furnishing industry, to renowned multinational modern trade retailers, such as IKEA, Walmart, Kmart, Bed Bath & Beyond, Rusta, Runsven, Kohl’s, Kroger etc.
Essen offers bath area accessories, artificial plants and flowers, storage, and organization units. It has a diverse customer base across a gamut of industry groups. They comprise of departmental stores, discount stores, retailers, hypermarkets, home improvement stores etc.
Company commenced its business operations in the Financial Year ended March 31, 2003 by manufacturing desk-mats. Thereafter, in 2007, Company expanded its product portfolio by manufacturing expanded polystyrene foam disposables and commenced its commercial production on September 20, 2008. Subsequently, it further expanded operations by manufacturing dining table mats, coasters, yoga mats and inner shoe soles through compression molding process in the year 2014; and artificial plants through injection molding process in the year 2018.
Its product portfolio can broadly be classified into seven categories, namely, bath area, kitchen & dinning, home décor, storage and organization, fitness and lifestyle, outdoor and utility and customized products, which include plastic films, Spa slippers, Baby shower caps, green-house gutter sheet etc.
Essen Speciality Films also supplies directly to select global importers and exporters. It services clients in more than 24 geographies including China, UK, Saudi Arabia, US, Qatar, Germany, Italy, Canada, New Zealand, Spain, Belgium, Austria, Mexico and many more.
The Company has been recognized as a ‘two star export house’ by Ministry of Commerce & Industry, Government of India. It operates a fully-integrated, sustainable and technologically advanced manufacturing unit, which has been certified to be compliant with the requirements of ISO 9001:2015.
Company is part of the Rajoo Group, which is headed by our promoter group company, Rajoo Engineers Limited. It is listed on the BSE Limited since October 24, 1994 and had a total market capitalization of 270.67 Crore as of June 9, 2023. Rajoo Engineers Limited was incorporated in 1986, manufactures plastic-extrusion machinery.
Pallav Kishorbhai Doshi and Karishma Rajeshbhai Doshi are the Promoters of the Company
Essen Speciality Films IPO: Financials
Particulars
31-Mar-23
31-Mar-22
31-Mar-21
Revenue from Operations
11,861.18
11,743.58
9,577.70
Total Income
12,048.09
11,857.17
9,680.78
Profit/(Loss) before Tax
1,431.81
686.94
1,235.60
Profit/(Loss) after Tax
1,337.23
516.9
913.73
Earnings Per Share
8.36
3.23
5.71
Post issue Share Capital
2070
FV
10
IPO price
107
EPS Fy23
6.46
PE Fy23
16.56
Market cap in Lacs
22149
Market Cap/sales
1.87
sales cagr
11%
net profit cagr
21%
Anchor Investors
Essen Speciality Films IPO: Salient Points
Promoters holding is 100% at present and shall stand at 73.68% post IPO.
In the Fiscals 2023, 2022 and 2021, 72.82%, 78.72% and 91.73%, respectively, of its revenue from operations were derived from top five customers.
Company has been associated with renowned multinational modern trade retailers, such as IKEA, Walmart, Kmart, Bed Bath & Beyond, Rusta, Runsven, Kohl’s, Kroger, etc., since its incorporation, and thus has never faced any material instances of non-compliance or non-adherence of norms prescribed by clients or any third party inspection agencies.
The company markets and sells its products predominantly under three brands; ‘Draperi’ for shower curtains, ‘Runner’ for shelf liners and ‘Paperi’ for artificial plants and placemats.
It also has an online presence on platforms such as Amazon, Flipkart, Snapdeal, Meesho, IndiaMart and JioMart. The revenue earned from these online sales, contributed 31%, 0.42% and 0.31% to its total revenue for the financial years ended March 31, 2023, March 31, 2022 and March 31, 2021, respectively.
Essen Speciality Films plans to continue to increase offerings in the current business segments as well as diversify into new products by tapping into segments which in the view of the management have attractive growth prospects. It has plans to start the following variants in following product categories:
a) Kitchen and Dining :
Surface printed placemats (enables us to supply products with low minimum order quantity at affordable price); and
Table cloth with Polyester non-woven backing (to cater to the growing demand in the North American market).
b) Storage and Organisation :
Collapsable storage boxes; and
Printed Adhesive shelf-liners (multi-purpose in nature with variety of applications from kitchen-to- refrigerator decoration, surface protection from scratches, etc.)
c) Fitness and Lifestyle:
Puzzle mat : Children play floor mat (to become a fist mover in manufacturing and exporting affordable total volatile organic compounds safe mats in the home improvement and home furnishing industry); and
Exercise/Gym mat (to cater to the growing demand in the domestic and international market)
Essen Speciality Films revenue break up for the preceding three fiscals based on the sale of products in domestic and international markets is as follows:
S. No.
Particulars
Fiscal 2023
Fiscal 2022
Fiscal 2021
1
Domestic (Rs Lacs)
2,880.67
1,921.43
669.92
2
Exports (Rs Lacs)
8,833.73
9,465.40
8,865.57
Total
11,714.40
11,386.83
9,535.49
It intends to use IPO [proceeds as follows:
Sr. No.
Particulars
Estimated amount
1.
Prepayment or repayment of all or a portion of certain outstanding borrowings availed by our Company
Up to 353.91
2.
Funding the working capital requirements of our Company
Up to 2,900.00
3.
General corporate purposes*
rest
Company stands to benefit owing to association with the promoter company REL, it has a competitive advantage of developing innovative and automated processes to manufacture specialised plastic products which enables it to customize its products with variations as per the specific requirements of customers.
Its manufacturing unit houses extrusion plants, which help process the plastic waste into pallet, which is its key raw material, and also make it compliant with the standards prescribed by its customers and the regulators of the countries, in which it exports its products, thereby reducing the raw material expenditure and also making the Manufacturing Unit a ‘zero-discharge’ unit.
The manufacturing unit of the Company is substantially operated through its solar plant situated at Rajkot and electricity for its unit is also sourced from reliable external sources which supply energy produced by renewable sources.
Company has availed term loans from Standard Chartered Bank, ICICI Bank, Axis Bank etc.
Total revenue grew at a CAGR of 11.56% between Fiscals 2021 and 2023 while net profit has grown at 21%.
Its PE ratio is 16.5x (fy23 earnings).
Company has shown Shaily Engg., and Supreme Ind. as their listed peers. They are much bigger players and are currently trading at a P/E of ~50x. The Average Industry P/E is ~43.5x
Lead manager Gyr Capital Advisors Limited has a decent record in last few issues with almost all managing a positive listing. These include SME issues like MCON Rasayan India Limited, Agarwal Float Glass India Limited, Anlon Technology Solutions, Sabar Flex India Limited, JFL Life Sciences Limited, Mafia Trends Limited,Uma Converter Limited etc.
SMC Global Securities Limited is the market maker for the issue.
I intend to apply in Essen Speciality Films IPO.
GMP as reported on social media has been steady or rising and may be Rs. 45+.
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. Do check the data from company’s RHP and exchanges before making any decision. Please do your own due diligence as stock market/MF investments have high degree of inherent risk.
