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Electronics Mart India Limited IPO Review

 

About Company

Incorporated in 1980, Electronics Mart India Limited is the 4th largest consumer durable and electronics retailer in India. The company offers a diversified range of products with a focus on large appliances (air conditioners, televisions, washing machines and refrigerators), mobiles and small appliances, IT and others. The company's offering includes more than 6,000 SKUs (stock keeping units) across product categories from more than 70 consumer durable and electronic brands.

Competitive Strengths:

  1. Ownership Model: The company owns the underlying property including the land and building.

  2. Lease Rental Model: The company has enter into a long-term lease arrangement with the property owner(s). As of August 15, 2021, out of the total 99 stores the company operates, eight stores are owned, 85 stores are under the long-term lease rental model and six stores are partly owned and partly leased.

  3. Retail: As of August 15, 2021, out of 99 stores, 88 stores are Multi Brand Outlets ("MBOs") and 11 stores are Exclusive Brand Outlets ("EBOs"). The revenue from the retail channel was Rs 29,312.84 million, Rs 28,991.35 million and Rs 25,801.72 million for Financial Year 2021, 2020 and 2019, respectively.

  4. Wholesale: The company is also engaged in the wholesale business of consumer durables, where the company supplies products to single-shop retailers in Andhra Pradesh and Telangana regions. The revenue from the wholesale channel was Rs. 530.53 million, Rs. 505.22 million and Rs. 465.81 million for Financial Year 2021, 2020 and 2019, respectively.

  5. E-Commerce: The e-commerce website currently functions as a catalogue for the products that company retail at stores. The revenue from the e-commerce channel was Rs. 444.57 million, Rs. 280.11 million and Rs. 212.75 million for Financial Year 2021, 2020 and 2019, respectively. 

Company Financials:

Electronic Mart India Limited Financial Information (Restated)

Period Ended 

Total Assets 

Total Revenue 

Profit After Tax 

Net Worth 

Reserve and Surplus 

  31-Mar-2019

 1109.15

 2826.1

 77.1

 340.5

 377.06

  31-Mar-2020 

 1347.6

 3179.02

 81.61

 433.08

 520.54

31-Mar-2021
 		  1523.53  3207.37  58.62  491.92  547.95

 31-Mar-2022 

 1824.74

 4353.07

 103.89

 596.51

 593.64

 30-Jun-2022 

 1755.58

 1410.25

 40.66

 637.97

 475.91

 

 

 

 

 

 Amount in Rs Crore

 

 

Weakness:

  1. Around 37% of paid-up equity share capital is subjected to outstanding legal proceedings.

  2. The bank cannot open new branches unless it is listed and also require to obtain prior permission from the RBI.

 

Objects of the Issue:

  1. Funding of capital expenditure for expansion and opening of stores and warehouses.

  2. Funding incremental working capital requirements.

  3. Repayment/prepayment, in full or part, of all or certain borrowings availed by the Company.

  4. General Corporate Purposes. 

Company Promoters

  1. Pavan Kumar Bajaj

  2. Karan Baja 

 

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