Polycab India Limited IPO: Should you subscribe?
Polycab India Limited – one of the largest manufacturer in the wires and cables industry in India (According to CRISIL Research), in terms of revenue from the wires and cables segment and provide one of the most extensive range of wires and cables in India, is planning to raise INR 1337.12 Cr via initial public offer (IPO) [Fresh Issue (INR 400 Cr) and Offer for Sale (INR 937.12 Cr to INR 945.91 Cr)]
polycab india limited ipo will remain open between 5 to 9 April 2019
Polycab India Limited – Company Profile
Incorporated in the year 1996, Polycab is engaged in the business of manufacturing and selling wires and cables and fast moving electrical goods (FMEG) under the “POLYCAB” brand.
In 2009, Polycab diversified into the engineering, procurement and construction (EPC) business, which includes the design, engineering, supply, execution and commissioning of power distribution and rural electrification projects.
In 2014, the company diversified into the FMEG segment and its key FMEG are electric fans, LED lighting and luminaires, switches and switchgears, solar products and conduits and accessories.
For Fiscal 2018, Polycab India Limited have a market share of approximately 18 percent of the organized wires and cables industry and approximately 12 percent of the total wires and cables industry in India (Source: CRISIL Research)
polycab india limited share price is INR 538
Polycab India – Products
Wires and Cables: The Company manufacture and sell a diverse range of wires and cables and its key products in the wires and cables segment are building wires, control cables, flexible cables, instrumentation cables, power cables, solar cables, flexible/single multi core cables, communication cables and others including welding cables, submersible flat and round cables, rubber cables, overhead conductors, railway signaling cables, specialty cables and green wires.
Electrical Fans: The portfolio of electrical fans include ceiling fans, table wall pedestal (TPW), exhaust fans and air circulators.
Lighting and Luminaires: Polycab manufacture, sell and trade a range of LED lamps (including down-lighters) and luminaires at varied wattages. The lighting product portfolio comprises a range of LED domestic products and LED luminaires for consumer, commercial and outdoor lighting.
Switches and Switchgears: Portfolio of switches and switchgears includes miniature circuit breakers (MCB), isolators, residual current circuit breakers (RCCBs), Residual Current Breaker with Overcurrent (RCBOs), distribution boards and a range of sockets and modular switches that are available for varied range of wattages, voltages and amperage and with different breaking capacities. The sockets and switches are sold under the brand LEVANA
Solar Products: As part of promoting the use of renewable energy, the company has ventured into the sale of solar inverters; solar water pumping system and electron-beam irradiated solar cables manufactured by third-party manufacturers.
Conduits and Accessories: The Company also sell uPVC conduits and accessories. uPVC accessories that the company sell include bending springs, circular boxes, circular lids, couplers, deep circular boxes, fan boxes, inspection bends, inspection elbows, inspection tees, junction boxes, reducers, round tees, saddle plates, saddle straps, slip type bends and space bar saddles.
Manufacturing Facilities
Polycab has 24 manufacturing facilities, including 2 major joint ventures with Techno Electromech Pvt Ltd. (Techno) and Trafigura Pte Ltd (Trafigura), located across the states of Gujarat, Maharashtra and Uttarakhand and the union territory of Daman and Diu.
Distribution Network
The Company’s distribution network in India comprises over 3,300 authorized dealers and distributors and 29 warehouses (as on March 31, 2018).
Polycab manages sales and marketing activities through its corporate office, 3 regional offices and 20 local offices in various parts of India (as on June 30, 2018). In addition, in Fiscal 2018, the company has exported its products to over 40 countries.
Promoters of Polycab
Inder Jaisinghani: Chairman and Managing Director, who has approximately 40 years of experience in the cable and wire industry.
Ajay Jaisinghani,
Ramesh Jaisinghani, and
Girdhari Jaisinghani
IPO Details – Price, Minimum Bid and Other
Polycab India – Financials
From Fiscals 2016 to 2018, the company’s total income less excise duty grew at a CAGR of 14.31%.
During the same period, Fiscals 2016 to 2018, the company’s EBITDA and profit grew at a CAGR of 23.80% and 41.69%, respectively.
For Fiscals 2016, 2017 and 2018, EBITDA margin stood at 10.01%, 9.95% and 11.74% while PAT margin stood at 3.53%, 4.17% and 5.42%.
For the same period, ROE stood at 10.34%, 11.66% and 15.76%, while RoCE stood at 15.99%, 14.97% and 21.25%, and debt to equity ratio stood at 0.45, 0.43 and 0.34.
CONCLUSION –
Considering the company’s valuation and financial parameters, FinBlab recommends SUBSCRIBE ratings on Polycab India Limited IPO
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