IPO Details:
- IPO opening: September 16, 2025
- IPO closing: September 18, 2025
- IPO Size: Rs. 451.31 crore: Entirely an Offer for Sale
- IPO Price: Rs. 235 – Rs. 247 per share
- Lot Size: 60 shares
- Investor Allocation: QIBs 50%, HNIs 15%, Retail 35%
- Lead Managers: Axis Capital Ltd., DAM Capital Advisors Ltd.
- Registrar: MUFG Intime India Pvt. Ltd.
About the Company:
- The company operates in the decorative wall panel and laminates industry as a seller and marketer. It is one of India’s leading decorative wall panel brands with a market share of 15.87% by revenue in the organized sector in FY23. It operates on an asset-light business model, outsourcing its manufacturing.
- Main products/services: Decorative Wall Panels and Decorative Laminates.
- Sales & manufacturing units: No own manufacturing facilities; works with 36 contract manufacturers in India, South Korea, China, and other countries as of March 31, 2025.
- Employees: 195 employees as of March 31, 2025, including 102 contractual workers.
- Promoters: Pratik Gunvantraj Singhvi, Jai Gunvantraj Singhvi, Pratik Gunwantraj Singhvi HUF, and Jai Gunwantraj Singhvi HUF.
- Network: A distribution network of 180 distributors across 25 states and five union territories in India as of March 31, 2025.
Financials:
| Particulars (Rs. Cr) | FY25 | FY24 | FY23 |
|---|---|---|---|
| Revenues (from Operations) | 284.23 | 221.70 | 263.58 |
| EBIDTA | 110.10 | 89.00 | 83.63 |
| EBIDTA Margin (%) | 38.74 | 40.15 | 31.73 |
| Net Profit | 76.44 | 62.91 | 59.57 |
| Net Profit Margin (%) | 26.90 | 28.38 | 22.60. |
The company maintains high EBITDA and net profit margins, although EBITDA margin saw a slight dip in FY25 from FY24 levels.
Anchor Issue
- Euro Pratik Sales IPO raised approximately Rs 135 crore from anchor investors
- The anchor investors and their percentage allocation of the anchor investor portion are: PineBridge Global Funds (33.33%), Turnaround Opportunities Fund (26.63%), Motilal Oswal Mutual Fund (25.00%), Alchemy Emerging Leaders of Tomorrow (10.00%), ITI Mutual Fund (10.00%), Bengal Finance & Investment Pvt Ltd (7.49%), Nuvama Crossover Opportunities Fund – Series III B (7.49%), 360 ONE Equity Opportunity Fund – Series IV (5.03%), NEO Alternatives Investment Trust – Dynamic Strategy Fund (5.00%), and SB Opportunities Fund II (5.00%).
- Total mutual fund allocation in the anchor portion is about 29.91% of the anchor investor shares.
Salient points:
- Use of funds: The IPO is a pure Offer for Sale, so the company will not receive any proceeds.
- Business Verticals: The company operates in two main product categories: Decorative Wall Panels and Decorative Laminates. Revenue Model: It follows an asset-light model, outsourcing manufacturing to contract partners and selling its products through a distributor network.
- Growth Strategies: Key strategies include expanding into new domestic and international markets, strengthening the distribution network, enhancing brand equity, innovating products, and pursuing inorganic growth opportunities.
- Risks: Dependence on contract manufacturers, foreign exchange fluctuations, high working capital requirements, negative cash flow from operations in FY25, and high related-party transactions. A fire at its largest warehouse in April 2025 destroyed significant inventory.
- Litigations: The company has filed a criminal proceeding for a dishonored cheque and two material civil suits for intellectual property infringement. There are tax proceedings involving directors and promoters. Promoters have received an administrative warning from SEBI.
- Revenue split by region (FY25): South India (26.69%), North India (17.90%), West India (17.64%), East India (9.91%), and Central India (3.41%).
- Export/import: The company exports to over six countries across Asia and Europe. Domestic revenues were 97.4% and exports were 2.6% in FY25. Purchases in foreign currency from countries like South Korea and China constituted 54.81% of total purchases in FY25. Revenue split by product (FY25): Decorative Wall Panels contributed 66.13%, Decorative Laminates 25.64%, and other products 8.23% to the revenue from operations.
- Working capital & inventory days (FY25): Working Capital Days stood at 168, and Inventory Days were 85. Receivables trend: Trade receivables increased by 116% in FY25.
- CAGR (FY23-FY25): Revenue CAGR was 3.8%, EBITDA CAGR was 14.7%, and PAT CAGR was 13.25%
Peers:
| Name of Company | Face value (Rs.) | NAV (per share) (Rs.) | P/E | RoNW (%) |
|---|---|---|---|---|
| Euro Pratik Sales Limited | 1 | 22.91 | 33 | 32.65 |
| Greenlam Industries Limited | 1 | 44.17 | 87.54 | 6.07 |
| Asian Paints Limited | 1 | 201.84 | 62.64 | 19.16 |
| Berger Paints India Limited | 1 | 52.78 | 55.77 | 19.22 |
| Indigo Paints Limited | 10 | 216.35 | 40.32 | 13.79 |
THe company has chosen to compare itself more with paint companies which are at high PE. It has not mentioned players like Rushil Decor, Stylam Industries etc.
Management commentary: The company is bottom-line driven and saw profit grow by around 22% last year. It has negligible US dollar exposure as it procures materials in local currencies like the Korean Won and Chinese Yuan to mitigate foreign exchange risk. Recent acquisitions of related party companies were funded through internal accruals to avoid any conflict of business, and the company is net debt-free. The growth is attributed to both organic expansion (60%) and acquisitions (40%). Cash flows turned negative in FY25 due to these acquisitions but are expected to be positive from this year onwards. The company holds a 16% market share in the decorative wall panel segment, which is growing at 16-18% annually. Exports constitute about 3% of the business, with the US market being at a very nascent stage.
Opinion: I have a neutral view on the IPO and may skip this IPO. It may be OK for risk takers. The business operates on asset light model & has high EBITDA margin. The business demands high working capital and sales have been stagnant. Company has good visibility in decorative wall panel where it is clear Leader and demand for such products is rising. Current GMP is Rs. 5 (2%)
Post IPO equity capital: Rs. 10.22 crore, P/E for FY 24: 40.10 times, P/E FY25: 33.02 times.
- This post is exploratory and educational purposes only.
- Standard disclaimer: I am not a SEBI registered analyst and above analysis is for educational purpose only. Iam a postgraduate in engineering & Management . I have in the past cleared 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.