EPACK Durable IPO: Issue Booked 16.35 Times, Retail Portion Subscribed 6.25 Times

The initial public offering (IPO) of EPACK Durable, an air conditioner manufacturer, opened for subscription on January 19, 2024, and is set to close on January 24, 2024. The price band for the IPO is set between Rs 218 to Rs 230 per equity share, with each share having a face value of Rs 10. The total issue amounts to Rs 640.05 crore and is structured as a book-built issue. It comprises a fresh issue of 1.74 crore shares, aggregating to Rs 400 crore, and an offer for sale (OFS) of 1.04 crore shares, which aggregates to Rs 240.05 crore.

About the company

EPACK Durable, established in 2019, operates as an original design manufacturer (ODM) of room air conditioners (RAC). In addition to producing RACs, the company manufactures various components actively used in RAC production, including sheet metal parts, injection molded parts, cross-flow fans, and PCBA components.

At 4:45 PM, investors booked the issue 16.35 times, exceeding the 1.99 crore shares available. Investors subscribed to the retail portion 6.25 times, amounting to 1 crore shares. Non-Institutional Investors (NIIs) booked 28.08 times the shares available, totaling 12.12 crore shares against the offering of 43.17 lakh shares. Qualified Institutional Buyers (QIBs) subscribed 25.50 times against the 55.84 lakh shares allocated.

Price Band

EPACK Durable has set the IPO price band between Rs 218 to Rs 230 per equity share, with a face value of Rs 10 each.

Issue Size

The company structured the total issue amount as a book-built issue, and it amounts to Rs 640.05 crore. It comprises a fresh issue of 1.74 crore shares, aggregating to Rs 400 crore. It has an offer for sale (OFS) of 1.04 crore shares, which aggregates to Rs 240.05 crore.

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Company Financials

In FY23, the net profit of the company experienced a substantial year-on-year growth of 83.4 percent, reaching Rs 32 crore. During the same period, revenue from operations saw a notable increase of 66.5 percent, reaching Rs 1,539 crore. The EBITDA (earnings before interest, tax, depreciation, and amortization) for FY23 stood at Rs 102.5 crore. It reflects a 49 percent increase compared to FY22. However, the margin decreased by 78 basis points to 6.66 percent during the same period. The top line for H1FY24 amounted to Rs 616.32 crore.

IPO Reserve Portion

Qualified Institutional Buyers (QIB): Not more than 50 percent of the shares in the public issue
Non-institutional Institutional Investors (NII): Not less than 15 percent
Retail Investors: Not less than 35 percent of the offer

Objectives of the Issue

The company intends to allocate the net proceeds from the new issue towards several key objectives: financing capital expenditures for setting up new manufacturing facilities or expanding existing ones; repaying and/or prepaying a portion or all of its outstanding loans; and for general corporate purposes.

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