Electronics Mart India Limited IPO – Review

Electronics Mart India Limited – one of the fastest growing consumer durable & electronics retailers in India is planning to raise INR 500 Cr via IPO [Fresh Issue 500 Cr + OFS NIL]

Electronics Mart India Limited: Company Details

Incorporated in the year 1980, Electronics Mart India Limited (EMI) is the 4th largest “consumer durable and electronics retailer in India” and as of FY 2020, it is the largest player in the Southern region of India in revenue terms with dominance in the states like Andhra Pradesh and Telangana (Source: CRISIL Report)

Business

Electronics Mart India offers a diversified range of products with a focus on,

• Home appliances products such as (1) air conditioners, (2) televisions, (3) refrigerators, and (4) washing machines;
• Mobile appliances products such as (1) mobile phones, (2) tablets, (3) smartwatches, and (4) fitness trackers;
• Small appliances and IT products such as Bluetooth speakers, coolers, ceiling fans, geysers, headphones, laptops, personal computers, printers, cables, screen guards, personal care devices, and kitchen appliances like chimneys, kitchen hobs, water purifiers, and other allied appliances.

Business Model

The Company’s business model is a mixture of the “ownership model” and “lease rental model”

• Ownership Model: The Company owns the underlying property including the land and building.
• Lease Rental Model: The Company has entered into a long-term lease arrangement with the property owner(s). As of August 15, 2021, out of the 99 stores, Electronics Mart India operates, 85 stores are under the long-term lease rental model, 8 stores are owned, and 6 stores are partly owned and partly leased.

Business Activities

The Company operates its business activities across 3 different channels, viz. Retail, Wholesale, and E-commerce.

• RETAIL: With the object of providing comprehensive electronic solutions, Electronics Mart India has set up diverse electronic retail and consumer durable stores arraying multifarious as well as specialized electronic products. As of August 15, 2021, out of a total of 99 stores, 11 stores are Exclusive Brand Outlets (EBOs) and 88 stores are Multi Brand Outlets (MBOs)
• WHOLESALE: Electronics Mart India is also engaged in the wholesale business of consumer durables, where the company supplies products to single-shop retailers in Telangana and Andhra Pradesh regions.
• E-COMMERCE: In 2017, Electronics Mart India diversified its operations by venturing into the e-commerce space through its own website. The Company’s e-commerce website currently functions as a catalog for the products it retails at its stores. The Company further expanded its e-commerce operations in the year 2019 by associating with the largest international and domestic players in the e-commerce market.

Core Strategies

• Expand reach across select geographies and make deeper the footprint in its existing markets
• Enhancing sales volumes by continuing to prioritise customer satisfaction
• Technology led effective inventory management and lean operating structure to maintain & improve operating efficiencies
• Maintaining & building new relationships with prominent brands across existing and new format stores
• Continuous training of manpower

Promoters

• Pavan Kumar Bajaj
• Karan Baja

Book Running Lead Managers

Anand Rathi Advisors Limited, IIFL Securities Limited, and JM Financial Limited

IPO Dates

IPO Details – Price, Minimum Bid and Other

Financials

CONCLUSION

Considering the company’s valuation and financial parameters, FinBlab recommends SUBSCRIBE ratings on Electronics Mart India Limited IPO

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