Maruti Interior Products coming with an IPO to raise upto Rs 11 crore

Maruti Interior Products

• Maruti Interior Products is coming out with an initial public offering (IPO) of 2000000 equity shares of face value of Rs 10 each for cash at a fixed price of Rs 55 per equity share.
• The issue will open on February 3, 2022 and will close on February 8, 2022.
• The shares will be listed on SME Platform of BSE.
• The share is priced 5.50 times higher to its face value of Rs 10.
• Book running lead manager to the issue is ISK Advisors.
• Compliance Officer for the issue is Deepali Malpani.

Profile of the company

The company is into manufacturing and Domestic sale & Export of modular kitchen storage system, Aluminium long wardrobe handle & profile handle. It has wide range of product offerings for different customer segments. Its Brand Everyday Kitchen is focused towards economic range and its other brand Spitze by Everyday is offering premium products. It also manufactures products for other companies on OEM basis.

The company has an in house team of designers who look after, product development and quality control. All products manufactured by MIPL are designed inhouse and tested to maintain the product quality standards. MIPL has established marketing and distribution network across India. Further it has its online presence selling direct to customers via online ecommerce platforms like Amazon and flipkart. Looking at online market growth in India, it has a firm business plan to expand its online sales. With ecommerce it eye to reach out direct to customers, As Do it yourself (DIY) concept is growing India, it has developed DIY product range. This DIY products come with easy installation guide and video helping end users in assembling the product.

Everyday Kitchen Storage Accessories is economical product range of modular kitchen accessories and storage system. Coming to Premium Product Range, it is known as Spitze by Everyday. Both product ranges included Vertical Storages, Corner Storages, Drawer Pull Outs, Inserts, Slim Tandem Drawers, Mid Way Accessories, Drawer Organisers, Portable Storage Products, Wardrobe Storage Accessories, Wardrobe Handles, Main Door Handles, Cabinet Handles, Profile Handles, Rollar Shutter, Food WasteDisposer etc. All products manufactured by company are designed and developed in house.

Proceed is being used for:

• Setting up fully automatic Nickel/ Chrome Plating Plant and Powder Coating Plant.
• Working capital Requirement.
• General corporrte purpose.

Industry overview

The Indian modular kitchen market stood at $206 million in 2018 and is projected to grow at a CAGR of over 27% during 2019-2024 to reach $862 million by 2024. The projected figure accounts for 8-10% of organized market for modular kitchen. Rest 90% is still untapped. So there will be a huge boom in the modular kitchen industry in INDIA in the coming future. This is the reason big MNCs like Century Ply, Samsung, Panasonic, Asian Paints, Nilkamal Plastics, Johnson & Johnson, Reliance, etc are entering this industry for big exposure. A modular kitchen encompasses a range of fixtures and cabinets assembled in a planned manner to facilitate effective usage of kitchen space. A modular kitchen normally consists of wooden cabinets, countertops, internal accessories including built-in covered baskets, and household and kitchen appliances such as a washbasin, dishwasher, chimney, cooking range/stove, and microwave oven. It is custom designed, and customers can choose from a variety of options, features, colors, and patterns. Kitchens are gaining recognition in the home improvement category to augment both its functionality and decor. Either for homemakers or working professionals, restructuring and remodeling the kitchen to a more attractive one has become a trend.

The modular kitchen market is driven by a rising middle-class population, decreasing household size, growing demand for premiumization, changing customer preference, growing partnerships between contractors and real estate project developers for designing modular kitchens. As many nuclear families are growing preference for small houses and space-saving ideas are giving growth to the modular kitchen market. Over the last few years, kitchen market in India witnessed an inclination towards modern designs and comfort. Among Indian consumers, kitchen is no longer considered as a separate unit, but a regular space for socializing, relaxation, and imaginativeness. With consumers showcasing inclination to experiment with design, textures, and adolescent color combinations, manufacturers have been set free to offer consumers with world class products. Consumers are progressively looking at premium designs and features such as magic corners and kitchen island concepts to add more luxury touch to the cooking space.

Pros and strengths

Experienced promoters and well-trained employee base: The company’s Promoters and Directors have significant industry experience and have been instrumental in the consistent growth of its group. They are ably supported by its staff and other co-directors. Its management and employee team combines expertise and experience to outline plans for the future development of the company. The knowledge and experience of its promoter and management will enables it to identify new opportunities, rapidly respond to market conditions, adapt to changes in the business landscape and competitive environment and enhances the growth in the business.

Manufacturer of high quality and durable range of products:  The company is manufacturer of high quality and durable range of modular Vertical Storage, Corner Storage, Drawer Pull Outs, Aluminium Profiles for Kitchens & wardrobe, Midway Storage etc. Its factory is spread across arond 1,00,000 sq.ft. of area. It has automatic machines for Wire Straightening, Wire Cutting, Wire Bending, Wire Welding, etc. It includes machines like 3D wire bending, 2D wire bending & automatic multi head wire mesh welders. Coming to sheet metal parts, it has automatic laser cutting machine & CNC Sheet Metal Bender. There are many manual machines too in the workshop. It also has in house testing laboratory which include machines like Rapid Salt Spray Testing Machine, Plating Thickness Tester, Chemical Content Checker, Etc.

Risks and concerns

Rely for production of significant proportion of products: The company’s products are procured from third party manufacturers in respect of raw material and it constantly evaluates new suppliers. It conduct substantial investigations into its potential third-party suppliers, including on-site visits, to ensure that they meet its quality, cost, lead time, capacity and social compliance requirements, and once it has enlisted the services of a particular supplier, through various levels of oversight it monitor the quality of such supplier’s work and aim to ensure not only that such supplier completes its project(s) on time but also that the finished products match the approved sample. However, there can be no assurance that its suppliers will be able to deliver, in a timely and cost-effective manner, products that meet its quality standards, which could result in damage to its customer relationships, lost sales and reduced market share and, consequently, could have an adverse effect on its net sales and profitability.

Face competition: The company may have to confront pressures in respect of pricing; product quality etc. from the clients and such pressures may put strain on its profit margins which may consequently affect the financial position of the company. Competition emerges not only from the organized sector but also from the unorganized sector and from both small and big players. Its competitiveness is also depend by the existing & new supply of finished products and its inability to compete with this intense competition; will have material adverse impact on the company's financial position.

Outlook

Maruti Interior Products is engaged in manufacturing and domestic sale & export of modular kitchen storage system, aluminium long wardrobe handle & profile handle. The company has a wide range of product offerings for different customer segments. The brand Everyday Kitchen is focused on the economic range of products, while the other brand Spitze by Everyday offers premium products. Apart from the company's own branded products, it also manufactures products for big companies like Godrej, Hafele India, Kaff Appliances, Walmart, Homelane, Livespace, Spacewood, etc. The company has a pan-India distribution network that consists of 300+ dealers and 25+ distributors as on March 31, 2021. Its dealers sell its products to wholesalers, retailers, sub-dealers and end-users. The company has an inhouse team of designers who look after, product development and quality control. All products manufactured by MIPL are designed inhouse and tested to maintain the product quality standards. On the concern side, the company’s business and assets could suffer damage from fire, natural calamities, misappropriation or other causes, resulting in losses, which may not be fully compensated by insurance. The industry in which the company operates being labour intensive depends on labour force for carrying out its activity. 

The company is coming out with a maiden IPO of 2000000 equity shares of Rs 10 each at a fixed price of Rs 55 per equity share to mobilize Rs 11 crore. On the performance front, In Fiscal 2021, Revenue from Operations had decreased by 16.13%, from Rs 1,811.50 lakh in Fiscal 2020 to Rs 1,519.37 lakh in Fiscal 2021. The decrease in the Fiscal 2021 was due to decrease in the sale of products being factory shut down due to Covid-19. After accounting for taxes at applicable rates, the company’s Profit after Tax had decreased by 32.49%, from Rs 228.90 lakh in Fiscal 2020 to Rs 154.53 lakh in Fiscal 2021. Currently the company is present in almost all states of India with over 300 dealers and over 25 distributors and has customers in Asian, Europe and North American Countries. The aim is to add 1000 dealers Pan-India in the next 5 years and add more customers from developed countries. It also plans to enter the bedroom and living room segments in the future thus making it a company which offers a 360 degree product solution for the entire home needs. Besides, the company aims rapid expansion in the modular kitchen business by tapping metro and other small cities.