Fonebox Retail IPO aims to raise Rs 20.37 crores. The issue is entirely a fresh issue of 29.1 lakh shares. Fonebox Retail is engaged in multi-brand retail selling of smart mobile handsets, mobile accessories and other consumer durable home appliances like Smart TVs, Laptop, Air conditioners etc.

About Fonebox Retail:

• Company was originally incorporated as “Fonebox Retail Private Limited” in 2021.
• Promoters of company are Mr. Manishbhai Girishbhai Patel, Mr. Jigar Lallubhai Desai, Mr. Parth Lallubhai Desai, Mr. Jigneshkumar Dashrathlal Parekh and Mr. Amitkumar Gopalbhai Patel. While Mr. Manishbhai Girishbhai Patel and Mr. Amitkumar Gopalbhai Patel were associated with the company since its incorporation. Mr. Jigneshkumar Dashrathlal Parekh, Mr. Jigar Lallubhai Desai and Mr. Parth Lallubhai Desai joined our company by acquisition of equity shares in 2021.
• Company is engaged in multi-brand retail selling of Smart Phones and allied accessories from manufacturers like Vivo, Apple, Samsung, Oppo, Realme, Nokia, Narzo, Redmi, Motorola, LG and Micromax.
• They are also engaged in multi-brand retail selling of consumer durable electronics goods like Laptop, Washing Machines, Smart TVs, Air Conditioners, Fridges, etc. from brands like TCL, Haier, Lloyd, Daikin, Voltas, Mi, Realme, OnePlus.
• They operate retail business with multiple brands. They have a portfolio of retail stores with different brands. They initially started business operations with brand “Fonebox”, for company owned stores as well as franchise stores. They acquired famous mobilephone retail store brands such as “Fonebook” and “My Mobile” vide Business Purchase agreements from their respective owners in the year 2021.
• As on January 05, 2024 they operate from total 143 stores across the state of Gujarat. Out of 143 stores 39 stores are Company Owned and Company Operated retail outlets (“COCO Model”) and 104 stores are under Franchise Owned and Company Operated retail model (“FOCO Model”) distributed in more than 20 cities in Gujarat.
• Company provides credit/EMI facilities to customers for buying their products for which the company has tied up with major leading credit houses like Bajaj Finance, HDB Financial Service, HDFC Bank and IDFC First Bank. Company in order to continue relationship with our valuable customers, They also provide after sale services related to mobile handsets and tablets in own retail and franchisee outlets.

Fonebox Retail IPO: Financials

Anchor: Fonebox Retail IPO

Fonebox Retail IPO: Salient Points

• India is the second-largest smartphone market in the world. India’s mobile subscriber base is expected to reach 1,420 million by 2024 from 1,200 million in 2018.
• Fonebox Retail Limited, a popular mobile and consumer durables retailer in Gujarat. They derive their revenue from products sold to customers based in the state of Gujarat only.
• Over the years, They have grown their business by focusing on their brands as well as acquiring existing business of other retail brands
• They have grown quite fast in last 3-4 years. In February 2021, they started business operations with 2 stores with name “Fonebox” in FY 2021 achieving a turnover of around 9.92 lakhs in one month of operation.
• Besides growing their owned brand “Fonebox”, they have focused on inorganic growth by acquiring brands and business of existing stores in FY 2022. They acquired 49 stores under different brand names namely “Fonebook” and “My Mobile” in FY 2022.
• After acquisition of the brand “Fonebook” they started 11 new stores under the same brand name.
• As on January 05, 2024 they operate a total of 143 stores.
• Brand and store acquisition has aided the growth inorganically, along side they have developed business by improving business of the existing stores and opening new stores simultaneously.
• Company plans to utilise IPO proceeds to meet its working capital requirements, for general corporate purposes and public issue expenses. Fonebox Retail plans to invest Rs. 13.5 crore to expand its retail store network to more cities in Gujarat.
• Company proposes to spend remaining amount on acquiring land to build corporate headquarters, hiring human resources in marketing and technical departments, servicing repayment obligations under existing and future financing arrangements and funding future growth.
• They sell smartphones and allied accessories from manufacturers like Vivo, Apple, Samsung, Oppo, Realme, Nokia, Narzo, Redmi, Motorola, LG and Micromax. The company also offers consumer durable electronic goods like laptops, washing machines, smart TVs, air conditioners and refrigerators from popular brands, including TCL, Haier, Lloyd, Daikin, Voltas, Mi, Realme and OnePlus in its multi-brand stores across Gujarat.
• The company operates a large network of 143 multi-brand outlets under three brand names: Fonebox, Fonebook and MyMobile, in more than 20 cities across Gujarat.
• As of January 05, 2024 the company has entered into 104 franchise agreements
• KPIs of company:

• Peers

• Fonebox Retail IPO is coming at a PE ratio of 45x (fy23 earnings) and 23x (fy24 annualized earnings).
• I intend to apply in Fonebox Retail IPO. With good performance of listed peer Jay Jalaram Technologies Ltd IPO (Kore Mobile IPO) , the scrip could attract good attention on the bourses. Jay Jalaram Technologies Ltd IPO (Kore Mobile IPO) was priced at Rs. 36 per share and now trades at Rs.420. The issue was managed by Beeline as the lead manager which the LM for this IPO as well.
• Beeline Capital Advisors Pvt Ltd is the Lead Manager to the issue. It has a fair to good record. Past issues handled by them include Australian Premium Solar (India) Limited, Konstelec Engineers Limited, Indifra Limited, Benchmark Computer Solutions, Sheetal Universal Limited, Rajgor Castor Derivatives, Arvind and Company Shipping Agencies, Karnika Industries Limited, Hi-Green Carbon Limited, Kody Technolab Limited, Chavda Infra Limited, Vinsys IT Services Limited,Ahasolar Technologies, Pentagon Rubber, Remus Pharmaceuticals, Sotac Pharmaceuticals, RBM Infracon Limited, Transvoy Logistics, Dev Labtech, Viviana Power Tech, Vital Chemtech, Aristo Bio-Tech and Lifescience, Viaz Tyres, Vertexplus Technologies etc.
• GMP as heard on Social Media may be around Rs. 120.
• 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.