Exxaro Tiles IPO Review

Exxaro Tiles IPO intends to raise ₹161.09 crore public issue of the tile manufacturing company is going to open for subscription on 4th August 2021. The company promoters’ have fixed Exxaro Tiles IPO price band at ₹118 to ₹120 per equity share,

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Exxaro Tiles IPO Details:

Bid OpensWed, 4th August, 2021
Bid Closes Fri, 6th August, 2021
Face Value (₹)₹ 10/-
Issue Size (₹ Cr)Rs. 158.4 – 161.1cr
Bid Lot125 Shares 
Price BandRs. 118 – 120 per share 
Issue Structure : 
QIB25% of the offer (
NIB35% of the offer (55.25 cr)
Retail40% of the offer  52,62,200 shares
Appls for 1x Retail0.42 Lacs

ANCHOR ISSUE: Exxaro Tiles raised Rs 23.68 crore from anchor investors, ahead of IPO. The anchor investors are Quant Mutual Fund and AG Dynamic Funds.

About Exxaro Tiles Limited:

  • Exxaro Tiles is engaged in the manufacturing and marketing activities of vitrified tiles.
  • It manufactures double charge vitrified tiles and glazed vitrified tiles made from ceramic materials i.e. clay, quartz, and feldspar.
  • Its product portfolio consists of more than 1000 different designs of tiles in 6 sizes.
  • Topaz Series, Galaxy Series, and High Gloss Series are some of the well-established products of the company.
  • Exxaro has 2 manufacturing facilities located at Padra and Talod in the state of Gujarat with a total installed capacity to manufacture 1.32 crore square metres annually. 
  • Exxaro Tiles has a large retail network of 2,000+ dealers, 6 display centers in 6 cities and 2 marketing offices at Delhi and Morbi.
EXXARO TILES - 800 x 800mm Double Charge Vitrified Tiles - Exxaro Tiles |  LinkedIn

Exxaro Tiles IPO: Financials

Particulars / (₹ In Cr)FY21FY20FY19
OPM (%)18.617.815.6
EPS (Rs)*3.42.52
Equity Post IPO44.74 
IPO Price120 
EPS (exclusing EO) FY213.40 
PE 35.29 
Market Cap537
Market Cap  /  Sales2.1


  • State-of-the-art manufacturing units.
  • Midsized player with a reasonable track record in the Tiles business
  • Good marketing and distribution setup
  • Strict quality control system and modern production expertise


  • Risks from any possible re-emergence of Covid.
  • Lack of captive power plant expose the company to increase in power prices and any change
  • competition form organized large players and unorganized sector

Exxaro Tiles IPO: Assessment

  • The tile sector is expected to report a growth of 14% and 10% in 2021 and 2022, respectively. With increased demand from the housing sector, consumption is likely to increase by 20% and 4% in the next two years.
  • The tiles industry is fragmented with presence of large organized players as well as unorganized players.
  • After the GST implementation there has been a shift towards the organized sector from the unorganized sector.
  • he company intends to use Rs. 50 cr from the issue towards repaying the existing debt and Rs. 45 cr towards working capital.
  • In FY21, the company generated 86.1% and 13.9% of the business from the domestic and overseas operations, respectively. It has significant export presence across 12 countries like Poland, UAE, Italy, and Bosnia.
  • The company mainly sells its own manufactured goods leading to higher EBITA margins but also is saddled with higher inventory.
  • EBITDA margin improved from 15.6% in FY19 to 18.5% in FY21, aided by reduction in staff cost and better operating efficiency.
  • On the flip side, the working capital cycle of company increased significantly to 205 days in FY21.
  • Exxaro Tiles IPO was last reported to be commanding a GMP of about Rs. 25.
  • Listed industry peers of the company are Kajaria ceramics, Orient Bell, Somany Ceramics etc. Exxaro Tiles is being offered at a PE of about 35 times. In comparison, Orient Bell quotes at a PE of 85x, Somany Ceramics at 41x and Kajaria Ceramics quotes at 52.9x of their FY2021 Earnings. THe IPO is priced higher compared to peers like Asian Granito which suffers from a longer working capital cycle. Further Exxaro Tiles has much lower ROE , while the peers are brands that have much higher visibility . Thus fundamentally there is not much room for appreciation in the IPO price.
  • I may apply in Exxaro Tiles IPO only if I see good response to IPO from categories other the retail and in this case of hardening of GMP.
  • Exxaro Tiles IPO will list under T2T category which sometimes makes investors exit difficult.

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.

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