Innokaiz India coming with an IPO to raise upto Rs 21.17 crore

Innokaiz India

• Innokaiz India is coming out with a 100% book building; initial public offering (IPO) of 27,13,600 shares of Rs 10 each in a price band Rs 76-78 per equity share.
• The issue will open for subscription on April 28, 2023 and will close on May 3, 2023.
• The shares will be listed on SME Platform of BSE.
• The face value of the share is Rs 10 and is priced 7.60 times of its face value on the lower side and 7.80 times on the higher side.
• Book running lead manager to the issue is Gretex Corporate Services.
• Compliance Officer for the issue is Mamta Saini.

Profile of the company

Innokaiz India was established in the year 2003. It is a diversified retail, distrubution, trading, office supplies and services company having a decade experience serving customers and communities with innovative products and services. Each of its businesses has earned leading market positions. Its team offers comprehensive service to ensure results that truly represent unique identity in the market place with extreme attention to detail and consummate follow through can have peace of mind knowing are working with a trusted business partner.

The company is a corporate services and solutions provider company. It has emerged as a one stop solution provider for various corporate needs. It offers a comprehensive range of services covering advertising and marketing solutions including digital marketing, corporate travel arrangements, gifting solutions, event management etc. Recently, it has also ventured into new business vertical i.e., E-Commerce Business. Its team of experienced and dedicated professionals provide services and solutions that are at the forefront of industry best practice. It thrives to provide the highest level of services on every assignment and to provide best-in-class and cost-effective services and solutions to its clients.

The company was incorporated in the name of Innokaiz India Private on January 11, 2013 and since inception it has successfully scaled up its capabilities and evolved as one stop solution for various corporate needs. Its exhaustive client list is the proof of its excellence in reliability of service and quality of products. The company is promoted by Mr. Sukumar Balakrishnan, who is the guiding force behind all the strategic decisions of the company and has been an anchor to the company since incorporation. He has a vast corporate and entrepreneurial experience and the frontline force behind the company.

Proceed is being used for:

• Working capital requirements
• General corporate purposes

Industry overview

The chances of achieving objectives and goals are greater when a company has an effective marketing strategy in place. Though there is always room for traditional strategies such as targeting the audience through television or radio, the modern consumer is progressively using other methods (the Internet, mobile phones, etc.) to access information. Here, social media marketing is vital, especially in a country like India which is one of the youngest in the world demographically and has a growing broadband market. It is not far-fetched to suggest that marketing strategies are the blood line of any business and that a company’s long-term goals are dependent on their efficacy.

The Indian media and entertainment (M&E) industry grew from Rs 728 billion ($11.74 billion) in 2011 to Rs 820 billion ($13.22 billion) in 2012, a growth of 12.6%. Total advertising expenditure (AdEx) across the media sector stood at Rs 327.4 billion ($5.28 billion) in 2012, while advertising revenues grew by 9%. Print continued to dominate, accounting for 46% of the advertising revenue at Rs 150 billion ($2.42 billion). Television led in the M&E industry while new media segments (like animation/VFX) and Films and Music segments also recorded discernible growth. Radio is projected to record a compounded annual growth rate (CAGR) of 16.6% in the period 2012–17, post the roll out of Phase 3 licensing.

Industry body NASSCOM in collaboration with AbsolutData Research and Analytics, has released a report: ‘Marketing Analytics - An opportunity for India to Lead’ which states that the Indian marketing analytics industry is expected to grow from its present value of $200 million to $1.2 billion in 2020, a CAGR of 25%. The report highlights that companies have begun to use marketing analytics insights more and more in order to gain competitive advantage in the market.

Pros and strengths

Established relationship with existing customers: It has developed strong and sustaining relationships with its clients. It works closely with the leading Banks, Insurance Companies and Asset Management Companies in the country. Its experience and track record of innovative and cost-effective solutions, delivering timely services to its customers consistently has helped it nurtures long-term relationships with them. It has a history of high customer retention and derive a significant proportion of its revenue from repeated business.

Comprehensive Marketing Services: It has PAN India presences. It was providing end to end comprehensive services to its clients for their various corporate needs. Its experienced team work hand-in-hand with customers to serve them and ensure delivery as per schedule and quality.

Client Focus: It is a client focused company. It intends to offer end to end marketing solution catering to its clients’ requirements. Its range of service and product offerings help its clients achieve their business objectives and enable it to obtain additional business from existing clients. The company is dedicated towards quality of its services and it adheres to quality standards as prescribed by its clients.

Risks and concerns

Face competition: It competes on the basis of a number of factors, including execution, depth of product and service offerings, innovation, reputation and price. Its competitors may have advantages over it, including, but not limited to substantially greater financial resources, Longer operating history than in certain of its businesses, Greater brand recognition among consumers, Larger customer bases in and outside India or More diversified operations which allow profits from certain operations to support others with lower profitability. These competitive pressures may affect its business, and its growth will largely depend on its ability to respond in an effective and timely manner to these competitive pressures.

Highly dependent on number of key managerial personnel:  Its performance depends largely on the efforts, expertise and abilities of its Key Managerial Personnel, senior management, and its operational personnel who possess significant experience in the industry in which it operate. It cannot assure that these individuals or any other member of its senior management team will not leave it or join a competitor or that it will be able to retain such personnel or find adequate replacements in a timely manner, or at all. It may require a long period of time to hire and train replacement personnel when qualified personnel terminate their employment with the company.

No alternate arrangements for working capital requirements: It has not made any alternate arrangements for meeting its capital requirements for the objects of the Issue. It meets its working capital requirements through its owned funds and internal accruals. Any shortfall in its net owned funds, internal accruals and its inability to raise debt in future would result in it being unable to meet its working capital requirements, which in turn will negatively affect its financial condition and results of operations.

Outlook

Innokaiz India has emerged as a one stop solution provider for various corporate needs. It offers a comprehensive range of services covering advertising and marketing solutions including digital marketing, corporate travel arrangements, gifting solutions, event management etc. On the concern side, its performance depends largely on the efforts, expertise and abilities of its Key Managerial Personnel, senior management, and its operational personnel who possess significant experience in the industry in which it operates. It has not made any alternate arrangements for meeting its capital requirements.  

The company is coming out with an IPO of 27,13,600 equity shares of face value of Rs 10 each. The issue has been offered in a price band of Rs 76-78 per equity share. The aggregate size of the offer is around Rs 20.62 crore to Rs 21.17 crore based on lower and upper price band respectively. On performance front, the company’s revenue from operations is Rs 285.93 crore for the financial year 2021-22 as compared to Rs 184.95 crore for the financial year 2020-21 representing an incline of 54.60% on account of incline in sales due to rapid recovery in business after the pandemic. Moreover, the company’s profit after tax increased by 55.48% to Rs 7.92 crore for the financial year 2021-22 from Rs 5.09 crore for the financial year 2020-21, reflecting a net increase of Rs 2.82 crore due to aforementioned reasons.

Going forward, it intends to increase sales volume through diversification of services offered and spread in geographical outreach. It is currently providing services majorly to banks, insurance companies and asset management companies. Its emphasis is on scaling of its operations by increasing client base shall provide it with attractive opportunities to grow. It intends to explore and evaluate strategic acquisition and technology alliance opportunities to gain access to new clients and sectors, add new technology capabilities to its offerings that drive synergies with its existing business ventures.