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GNG Electronics Ltd. (GEL) is set to launch its Initial Public Offering (IPO), aiming to raise capital through a combination of fresh equity shares and an offer for sale. The company operates in the electronics refurbishment industry, both in India and globally, under the brand “Electronics Bazaar”.

IPO Details

The GNG Electronics IPO is a book-building issue with a total size of ₹460.43 crores. The offering comprises a fresh issue of 1.69 crore shares, aggregating to ₹400.00 crores, and an offer for sale (OFS) of 0.26 crore shares, amounting to ₹60.44 crores.

• IPO Opening Date: July 23, 2025

• IPO Closing Date: July 25, 2025

• Price Band: ₹225 to ₹237 per share

• Lot Size: 63 shares

• Minimum Retail Investment: ₹14,175 for 63 shares (Note: Another source states minimum investment as ₹14,931).

• Allocation to Investors:

    ◦ Qualified Institutional Buyers (QIB): 97,13,818 shares (50.00%)

    ◦ Anchor Investors: 58,28,290 shares (30.00%)

    ◦ Non-Institutional Investors (NII): 29,14,146 shares (15.00%)

    ◦ Retail Individual Investors (RII): 67,99,673 shares (35.00%)

• Lead Managers: Motilal Oswal Investment Advisors Limited, IIFL Capital Services Limited (formerly IIFL Securities Limited), and JM Financial Limited

• Registrar: Bigshare Services Pvt Ltd

About the Company

GNG Electronics Limited (GEL) was incorporated in 2006 as “GNG Electronics Private Limited” and later converted to a public limited company on November 20, 2024. The company is recognized as India’s largest refurbisher of laptops and desktops and among the largest refurbishers of ICT Devices globally.

• Main Products/Services: GNG Electronics offers refurbishing services for laptops, desktops, and ICT Devices. It operates under the brand “Electronics Bazaar,” providing end-to-end services from sourcing to refurbishment, sales, and after-sales support with warranties. The company also offers value-added services like IT Asset Disposal (ITAD), e-waste management, doorstep service, on-site installation, flexible pay options, easy upgrades, and assured buyback programs. Its portfolio included 5,840 Stock Keeping Units (SKUs) as of March 31, 2025.

• Sales & Manufacturing Units/Facilities: The company has five refurbishing facilities: one in Navi Mumbai, Maharashtra, India; one in Dallas, Texas, USA; and three in Sharjah, UAE. It also has warehouses in India and outside India.

• Employees: As of March 31, 2025, GNG Electronics had 1,194 employees on its payroll.

• Promoters: The company’s promoters are Sharad Khandelwal, Vidhi Sharad Khandelwal, Amiable Electronics Private Limited, and Kay Kay Overseas Corporation.

• Branches/Network: GNG Electronics has a significant presence across India, USA, Europe, Africa, and UAE. As of March 31, 2025, it exports products to 38 countries in North America, South America, Asia, Asia-Pacific, Europe, Africa, and the Middle East, with a sales network comprising 4,154 touchpoints globally.

Financials

GNG Electronics Ltd.’s financial performance (Restated Consolidated) shows consistent growth.

The company’s market capitalization post-IPO is ₹2,702.07 crores. Based on FY25 revenue, the Market Cap/Sales ratio is approximately 1.90. As per P/E ratio for FY24 is 51.63 times and for FY25 is 39.17 times.

The company has demonstrated steady growth in both its top line (revenue increased by 24% from FY24 to FY25) and bottom line (profit after tax rose by 32% from FY24 to FY25) over the reported periods. While margins have fluctuated slightly, the overall trend indicates a robust financial trajectory.

GNG Electronics IPO Anchor Investor Allocation:

GNG Electronics raised a total of ₹138.13 crore from 14 anchor investors ahead of its IPO. The investors included Goldman Sachs Fund (15%), Motilal Oswal Mutual Fund (13%), Mirae Asset Mutual Fund (11%), Edelweiss Mutual Fund (10%), Buoyant Opportunities Strategy (9%), ICICI Prudential MF (8%), Nippon India MF (7%), Aditya Birla Sun Life MF (6%), Kotak Mahindra MF (5%), and HDFC Mutual Fund (4%). The remaining anchor investors, making up the rest of the book, include Franklin Templeton MF, Canara Robeco MF, SBI Life Insurance, and Sundaram MF. Overall, mutual funds received a total of 39.40% of the anchor allocation.

Salient Points

• Use of Funds: The company proposes to utilize the net proceeds from the fresh issue primarily for prepayment and/or repayment of certain outstanding borrowings availed by GNG Electronics and its material subsidiary, Electronics Bazaar FZC, amounting to ₹320.00 crores. The remaining funds will be used for general corporate purposes.

• Business Scenario: The global refurbished personal computers market is projected to reach US$40.6 billion by CY29, growing at an 18.9% CAGR from CY24-29. The Indian refurbished PC market is expected to reach US$4 billion by FY30, showing a 30% CAGR. There is an increasing preference for refurbished devices over “as-is used” devices, with the organized market share in India growing at a 35.5% CAGR from FY19 to FY25.

• Business Operations: GEL follows a repair-over-replacement approach. They offer customized ICT Devices and a wide range of SKUs.

• Revenue Model: The company’s revenue is primarily derived from the sale of laptops (75.59% of operational revenue in FY25). Other revenue streams include desktops, tablets, servers, premium smartphones, mobile workstations, accessories, and service income. They also generate revenue from incentive income and leasing.

• Business Strategy/Strengths: GEL is the numero uno Indian player in refurbished IT devices. Its strengths include well-established refurbishing capabilities, state-of-the-art infrastructure focusing on quality, a strong position to leverage the global shift towards sustainability and ESG, and an experienced management team. The company is also a certified refurbishment partner with Lenovo and HP, and an IT asset disposal partner for India’s second-largest software company.

• Risks: Key risks include:

    ◦ Reliance on laptop sales: Over 75% of operational revenue comes from laptop sales, making the business vulnerable to declines in demand for this product.

    ◦ Foreign exchange fluctuations can affect financial results, as a portion of sales is denominated in foreign currencies.

• Litigations: As of the Red Herring Prospectus date, there are 25 criminal cases filed by the company under Section 138 of the Negotiable Instruments Act, 1881, regarding dishonored instruments, with an aggregate amount involved of ₹7.04 million. There are also 7 tax proceedings against the company (aggregate amount ₹91.73 million) and 11 tax proceedings against its promoters (aggregate amount ₹410.38 million).

• Revenue Split by Product & Region:

    ◦ Product: In Fiscal 2025, 75.59% of revenue came from laptops, with the remaining 24.41% from desktops, tablets, servers, premium smartphones, mobile workstations, accessories, and service income.

    ◦ Region: In Fiscal 2025, 50.62% of revenue came from the Middle East, 24.47% from India, 17.89% from USA, and 7.02% from other regions (Asia, Asia-Pacific, Europe, Africa).

• Export/Import: The company exports products to 38 countries. It sources devices globally, with 52.44% of purchases within India and 47.56% from outside India in FY25.

• Working Capital & Inventory Days: Net working capital (number of days) was 68 days in FY25, 42 days in FY24, and 61 days in FY23. The company’s business is working capital-intensive.

• Receivables Trend: Trade receivables decreased from ₹1,169.06 crore in FY24 to ₹676.16 crore in FY25, after being ₹911.44 crore in FY23.

• CAGR Profits/Margins (Last 3 years):

    ◦ Revenue grew at an approximate CAGR of 46.7% from FY23 to FY25.

    ◦ PAT grew at an approximate CAGR of 41.4% from FY23 to FY25.

    ◦ EBITDA grew at an approximate CAGR of 49.9% from FY23 to FY25.

Peers

GNG Electronics Limited identifies Newjaisa Technologies Limited. Newjaisa is a small local player” while GNG is a global player.

Management Commentary

The company’s management views itself as well-positioned to continue expanding its business and pursuing its vision of becoming a market leader in the refurbished electronics industry.

Opinion

I intend to apply for the IPO as i may be seen as a first mover in this segment with the peer being quite small.

Investment thesis:• GNG Electronics is the largest Indian player for refurbished IT devices with a global presence, serving as a preferred partner for major IT hardware companies. • The company has demonstrated steady growth in its top and bottom lines in recent periods.• The refurbished electronics market is expected to experience robust growth globally and in India, driven by sustainability goals and affordability needs.• Debt repayment from the IPO proceeds is expected to significantly improve profitability by reducing interest expenses.

Post IPO equity capital: ₹22.80 crore. P/E for FY24: 51.63 times P/E for FY25: 39.17 times, GMP ~40%

• 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.