Dj Mediaprint & Logistics coming with an IPO to raise upto Rs 15 crore

Dj Mediaprint & Logistics

• Dj Mediaprint & Logistics is coming out with an initial public offering (IPO) of 1200000 equity shares of face value of Rs 10 each for cash at a fixed price of Rs 125 per equity share.
  
• The issue will open on January 18, 2022 and will close on January 20, 2022.
  
• The shares will be listed on SME Platform of BSE.
  
• The share is priced 12.50 times higher to its face value of Rs 10.
  
• Book running lead manager to the issue is Finshore Management Services.
  
• Compliance Officer for the issue is Khushboo Mahesh Lalji.
  

Profile of the company

DJ Mediaprint & Logistics is a provider of Integrated Printing, Logistics and Courier solutions in India with a well networked transport operations, pre-eminent quality standards and processes & operations. The company provides Bulk Mailing, Speed Post, Records Management, Manpower Supply, Return of Post Management, Bulk Scanning, Moving Services, Newspaper Print Advertising services and other related services. It caters to wide customer base across various industry segment such as Banking, Airlines, Shipping, Logistics, Education, Finance, Lottery Ticket, Healthcare, Insurance, Manufacturing, Retail, Stockbroking, Telecom, Utilities among others.

The company has executed many short term/long terms contract for Printing & Dispatch of monthly Credit Cards Statement, Letter, Annual Reports & Other ancillary services, Storage of records and its management, Digital franking machines services and ancillary services etc with its clients and getting repeated order from them. What started as a sole proprietary business in 1999, is today a vast enterprise that operates on a national and international level and offers a variety of printing, courier and other services.

A flag-bearer of the highest quality of work that is aligned with foolproof processes, and supported by a highly advanced and mechanised infrastructure, the company is committed to deliver printing and logistical solutions in a way that perfectly matches the expectations of its clients. A natural effect of its highly organized activities is the ISO 9001:2015 certification awarded to it. By virtue of its four pillars: Speed, Reliability, Dedication and Processes, DJ Mediaprint & Logistics not only delivers impeccably to the satisfaction of all its clients, but also adds value for all the stakeholders involved in its magnanimous scale of operations.

Proceed is being used for:

• Meeting the working capital requirements of the company.
  
• Meeting the Issue Expenses.
  
• General Corporate Purposes.
  

Industry overview

The COVID-19 pandemic impacted livelihoods and businesses, disrupting global economy and supply chains across the world. The logistics industry helped ensure that global flow of goods, particularly essential items, remained largely unhindered despite lack of transport and disruptions in the supply chain. Hampered by the pandemic in the first half of the year, businesses bounced back later with shorter lead times, better at-door experience and increased safety. Logistics players have increasingly begun to adopt new technologies such as data analytics, artificial intelligence and machine learning to enhance the operational efficiency and optimize cost and time. These technologies have played an instrumental role in reviving logistics sector post lockdown(s) and it is expected that embracing digitalization will be more than just a passing trend. This one is likely to be long-lasting and something that will shape the industry’s future course. Robotics and technology such as drones are set to occupy the space in the future of logistics arena in offering newage solutions driving cost reduction, convenience and delivery cycle.

Meanwhile, the paper & paper products industry is one of the worst affected industries due to the outbreak of Covid-19 pandemic. The lockdown imposed in the last week of March 2020 resulted in closure of operations of paper industry in the initial phase. Even while paper industry’s operations resumed with reduced capacities as restrictions eased, challenges remained in terms of logistics disruption and migration of labour. In addition to this, subdued demand from consumers also impacted sales. As a result, industry’s sales plunged by 49.8% on a y-o-y basis during the June 2020 quarter. Closure of education institutions, adoption of work from home by offices, muted demand for printing of newspapers among others disturbed the consumption of paper & paper products.

Pros and strengths

Smooth flow of operations: Established relationship with customers and suppliers ensure stability in demand and an uninterrupted supply of raw materials. The company has maintained long-standing relationship with its major customers. It is successful in building a strong client base for its business. Its existing relationships help it to get repeat business from its customers. This has helped it to maintain a long-term working relationship with its customers and improve its customer retention strategy. Its existing relationship with its clients represents a competitive advantage in gaining new clients and increasing its business.

Well-defined organizational structure: The company has a qualified and experienced second-tier management that has decision making powers. It is expected to benefit from the management’s ability to ensure smooth flow of operations. The company is managed by a team of competent personnel having knowledge of core aspects of its Business. It has an experienced management team having vast experience in the industry. Its senior management has pioneered its growth and fostered a culture of innovation, entrepreneurship and teamwork within its organization. Its personnel policies are aimed towards recruiting talented employees and facilitating their integration into its organization and encouraging the development of their skills and expertise.

Existing Supplier Relationship: The company’s existing supplier relationship protects the business with terms of supply and pricing of the products, the quality of the products offered etc. The company, being a small and medium size organization, rely on personal relationships with its suppliers. The company enjoys existing relationship with its suppliers. Further it also leverage the past experience of its management in maintaining effective supplier relationship.

Risks and concerns

Operate in a highly-competitive and fragmented industry: The company operates in the highly competitive and fragmented printing and logistics services industries. The entry barriers in the business are low and numerous players operate in the industry. The company faces tough competition from a large number of unorganised and a few organized players. The margins of the company may be constrained in the future due to volatility in the price of raw materials and consumables and intense competition from new as well as established players. The company’s future success depends on its ability to compete effectively, including by distinguishing its products, content or services from its competitors, by expanding its brands and titles, by providing higher quality content, expanding its distribution, sales and marketing forces, or by expanding its portfolio of digital products and educational services.

Rely on third party logistic providers: The company relies on third party logistic providers and consequently, any disruption in its transportation arrangements or increases in transportation costs may adversely affect its business, results of operations and financial condition. There are a limited number of such logistic providers and in the absence of a formal arrangement, it is exposed to fluctuations in transportation costs. Also, if the terms offered to such logistic providers by its competitors are more favourable than those offered by it, they may decline to provide their services to it and terminate their arrangements with it. It may also be affected by transport strikes, which may affect its delivery schedules.

High working capital requirement: The company’s business demands substantial funds towards working capital requirements. In case there are insufficient cash flows to meet its working capital requirement or it is unable to arrange the same from other sources or there are delays in disbursement of arranged funds, or it is unable to procure funds on favourable terms, it may result into its inability to finance its working capital needs on a timely basis which may have an adverse effect on its operations, profitability and growth prospects.

Outlook

Incorporated in 2009, DJ Mediaprint & Logistics is a provider of integrated printing, logistics and courier solutions in India and overseas. The company provides bulk mailing, speed post, records management, manpower supply, return of post management, bulk scanning, moving services, newspaper print advertising services, and other related services. The company boasts of a personalized delivery system and a pioneering set of systems and processes that regulate its entire spectrum of mailing operations. In line with the changes in printing technology, the company has entered a new field of printing by commissioning digital printing and associated equipment to its existing set-up of printing machinery.  The company has an established track record of 12 years and over 2 decades of relevant experience of promoters indicates the company’s ability to weather economic and business cycles. This also indicates its ability to maintain business viability and steer the business though operational hurdles. On the concern side, any shortcoming in the production or supply of its product due to negligence, human error or otherwise, may damage its products and result in non-compliance with applicable regulatory standards. It is working with many mutual fund, Credit Card and Banking companies for supply of statement on monthly or periodically basis. Government thrust and awareness to such industry for going paperless could have a negative impact on its results of operations and financial condition.

The company is coming out with a maiden IPO of 1200000 equity shares of Rs 10 each at a fixed price of Rs 125 per equity share to mobilize Rs 15 crore. On the performance front, sales/ Income from operation increase by 16.43% from Rs 2118.17 lakh in 2020 to Rs 2466.12 lakh in 2021. The company has made a profit of Rs 126.44 lakh for the year 2020-21 as against the previous year’s Profit After Tax of Rs 109.12 lakh. As part of the company’s growth strategy, it intends to focus on increase in volume of sales by increasing its area of operation. It will continue to maintain quality of its existing product to cater to various customers in the market. Its emphasis is on expanding the scale of its operations as well as growing its supply chain network, which will provide attractive opportunities to grow its client base and revenues.