SJS Enterprises, one of the leading players in the Indian decorative aesthetics industry in terms of revenue in Fiscal 2020, has raised INR240 crore from 18 anchor investors on 29 October. SJS Enterprises anchor investors include several big names in the asset management and private equity industry. In total, the company allocated 44,28,043 equity shares at INR542 per equity share – upper end of the IPO price band.
The issue with a price band of INR531-542 per share opens for subscription on Monday, November 01 and closes on Wednesday, November 03. Axis Capital Limited, Edelweiss Financial Services Limited and IIFL Securities Limited are the Book Running Lead Managers to the Offer (BRLM).
SJS Enterprises IPO is entirely an offer for sale issue of up to INR710 crores by Evergraph Holding Pte Ltd; and up to INR90 crore by K.A. Joseph, both parties being promoters of the company. Bids can be made for a minimum lot of 27 equity shares and in multiples of 27 equity shares thereafter.
SJS Enterprises Anchor Investors
Among the foreign portfolio investors who participated in the anchor were Tara Emerging Asia Liquid Fund, Societe Generale, Nomura, Goldman Sachs and Citigroup.
Domestic Investors who participated in the anchor book were Axis Mutual Fund, Franklin MF, Aditya Birla Sun Life Insurance, Avendus and Edelweiss, were allocated a total of 21,21,687 shares amounting to approximately INR115 crores i.e. 47.91% of the Total Anchor Book Size.
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SJS Enterprises: All About Aesthetics
SJS Enterprises is a “design-to-delivery” aesthetics solutions provider with the ability to design, develop and manufacture a diverse product portfolio for a wide range of customers primarily in the automotive and consumer appliance industries. The company has developed long-standing relationships with several customers. As at March 31, 2021, its relationship with 10 largest customers in terms of revenue averaged approximately 15 years.
In FY2021, sales to OEMs contributed 69.94%, while sales to Tier-1 suppliers contributed 29.70% to its revenue from operations. Its subsidiary Exotech – acquired in April 2021 – caters to requirements in the two-wheelers, passenger vehicles, consumer durables/appliances, farm equipment and sanitary ware industries for chrome-plated, printed and painted injection moulded plastic parts.
Its products include 2D decals and body graphics, 2D appliques and dials, 3D appliques and dials, 3D badges (3D lux), domes, overlays, aluminium badges, IMLs, wheel covers, nameplates, radiator grills, bumper parts, bezels, door handles, instrument panel housings and aftermarket styling products.
It has supplied over 11.5 crore parts with more than 6,000 SKUs in Fiscal 2021 to around 170 customers in approximately 90 cities across 20 countries. Its key customer base includes:
- Automotive original equipment manufacturers (OEMs) such as Suzuki, Mahindra & Mahindra, John Deere, Volkswagen, Honda Motorcycle, Bajaj Auto, Royal Enfield and TVS Motors
- Tier-1 automotive component suppliers such as Marelli, Visteon and Mindarika
- Consumer durables/appliances manufacturers such as Whirlpool, Panasonic, Samsung, Eureka Forbes, Godrej and Liebherr
- Medical devices manufacturers such as Sensa Core
- Sanitary ware manufacturers such as Geberit
SJS Enterprises: Robust Financial Performance
The company is a major supplier to automotive and consumer appliance industries and saw its revenues and profits increasing in the last three years despite the negative impact of Covid-19 pandemic.
SJS Enterprises’ Financial Performance (in INR crore)
| FY2019 | FY2020 | FY2021 | |
| Revenue | 240.8 | 221.3 | 255.2 |
| Expenses | 180.5 | 166.9 | 191.0 |
| Net income | 37.3 | 41.1 | 47.7 |
| Margin (%) | 15.5 | 18.6 | 18.7 |
The offer is priced in the PE ratio range of 33.8 – 34.5 while the company’s Return on Net Worth (RONW) stood at an impressive 15.2% for FY2021. As such, it is no wonder that SJS Enterprises anchor investors included a bevy of prominent names. It is also noteworthy that SJS Enterprises IPO grey market is active with applications being traded at a kostak rate of INR250.
If SJS Enterprises anchor investors is any indication, the company is likely to do well on bourses for investors. Stay tuned for more.
