Maruti Interior Products has started its IPO today and it will remain open through 08 February 2022. The company is looking to raise as much as INR 11.00 crore by issuing 20,00,000 shares at the rate of INR55 per share. We have gone through the prospectus to better understand the company and have analyzed its operations on 25 parameters. Here is Maruti Interior IPO Review in a nutshell, please scroll down for the detailed view.
Maruti Interior IPO Review: Business Basics
Are the company’s annual revenues more than INR50 crore?
No, Maruti Interior Products (website) had revenues of nearly INR11.5 crore in the six months of FY2022 which when annualized can’t exceeds the INR50 crore threshold.
Are the company’s annual profits after tax in excess of INR5 crore?
No, Maruti Interior Products’ net earnings after tax stood at INR1.5 crore in FY2021 while net profits for H1 FY2022 were INR1.6 crore. The company is likely below the INR5 crore mark.
Has the company got a strong and recognizable brand?
Yes, Maruti Interior Products has wide range of product offerings for different customer segments. Its Brand “Everyday Kitchen” is focused towards economic range while other brand “Spitze by Everyday” is offering premium products.
Is there a strong moat in place in the form of entry barriers, market reach etc?
Yes, Maruti Interior Products has not any similar and comparable listed peer which is involved in same line of business which acts as an entry barrier, although there are a number of competitors domestically and internationally. Nevertheless, it has longstanding business relationships with its clients which is difficult to replicate.
Is the company free of big client risks in terms of impact on revenues?
Yes. Maruti Interior Products has a pan-India distribution network that consists of more than 300 dealers and over 25 distributors as on March 31, 2021. It has online presence selling direct to customers via online ecommerce platforms.
Do exports contribute a sizeable chunk to annual revenues, giving the company an edge over its competitors?
No. Only 1.74% revenue of Maruti Interior came from exports during the H1 2022.
Is there a strong connect between the company and retail consumers?
Yes. The company has its marketing team through their experience and good networking with clients ensures timely delivery of orders and plays an instrumental role in creating and expanding a customer base. To retain its customers, the team regularly interacts with existing customers and sales network.
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Maruti Interior IPO Review: Management Analysis
Is the company’s top management experienced enough to lead operations through difficult times?
Yes, the company’s promoter Mr. Purushotam Rudabhai Lunagaria is actively involved in the management and has experience of over 2 decades in the positions of management.
Are the management members/promoters paying themselves fairly without jeopardizing shareholders’ interests?
Yes, we didn’t find excessive remuneration for management.
Do the promoters have sizeable equity left in the company after the IPO?
Yes, the promoters and promoter group currently own 55,50,000 shares or 100% equity stake in the company. Following the IPO, this shareholding will drop to 73.51%.
Is the current management trustworthy? Are there instances of putting shareholders’ interests at risk for personal gains?
Yes, we didn’t find such instances.
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Are the litigations or criminal proceedings against the company insignificant in nature and doesn’t involve big numbers?
No. There are no litigation cases outstanding against Maruti Interior Products, its directors, promoters or group entities. There are direct tax proceedings against the company involving sums of INR7.3 lakh.
Are the company management’s shares free from any pledge with banks or financial institutions?
Yes. As on the date of the prospectus, no promoter shares are pledged.
Are there external investors such as private equity or venture capital firms on board?
No. As mentioned above, the company is fully owned by promoters and promoter group entities. There are no external investors.
Maruti Interior IPO Review: Financial performance
Have the company’s revenues grown at a CAGR of at least 10% in the last three years?
No. Maruti Interior Products’ revenue from INR1,185.3 lakh in FY2019 to INR1,523.5 lakh in FY2021.
Have the company’s net profits grown at a CAGR of at least 25% in the last three years?
No. Maruti Interior Products’ earnings was INR98.22 lakh in FY2019 and INR154.53 lakh in FY2021.
Has the Average Return on Equity (ROE) in the last three years been more than 15%?
Yes. The company’s average Return On Net Worth (RONW) in the last three years has been 19.12%.
Has the company maintained positive operating cashflows in the last three years?
Yes.
Has the company witnessed a declining trend in debt/equity (D/E) in the last three years?
Yes. The company D/E is 0.04 in FY 2019, 0.15 in FY 2020 & 0.17 in 2021.
Are the company’s working capital requirements less than 20% of its annual sales?
Yes. Maruti Interior Products requires INR285 lakh working capital. Its working capital requirement stood at 5.35% of its annual revenues in FY2021.
Is the Debt/Equity ratio less than 1?
Yes, the company’s D/E ratio as of 31 March 2021 stood at 0.17.
Read Also: Find the Prospectus of Maruti Interior Here
Maruti Interior Products IPO Review: IPO objectives and valuations
Are the IPO objectives in line with the broad corporate guidelines? Funds raised shouldn’t be used for fancy purchases and upgrades.
Yes, the funds will be primarily used to finance working capital requirements.
Is the company offering some discount on Price/Earnings (P/E) ratio compared to its peers?
Yes. The company is offering its shares at the annualized P/E ratio of 19.78. There is no peer.
Is the company offering some discount on Price/Book Value (P/BV) ratio compared to its peers?
Yes, Maruti Interior Products’ P/BV is at 18.25. There is no peer.
Are the contingent liabilities less than 10% of latest annual revenues?
Yes. The company has no contingent liabilities.
Maruti Interior IPO Review gets a score of 17/23. Head to our IPO discussion page to get latest subscription details and check out this page for latest IPO grey market rates.
Disclaimer – The objective behind Maruti Interior IPO Analysis is to offer an unbiased view of the company’s operations, offer details, strengths, weaknesses, financial performance and valuation. The IPO rating framework helps investors in taking a call if Maruti Interior IPO is worth investing or not. Nevertheless, this is not an IPO recommendation to subscribe or avoid and the decision to invest should be based on individual investor’s risk profile.
