Rockingdeals Circular Economy
- Rockingdeals Circular Economy is coming out with an initial public offering (IPO) of 15,00,000 equity shares of face value of Rs 10 each in a price band Rs 136-140 per equity share.
- The issue will open for subscription on November 22, 2023 and will close on November 24, 2023.
- The shares will be listed on NSE Emerge Platform.
- The share is priced 13.60 times of its face value on the lower side and 14.00 times on the higher side.
- Book running lead manager to the issue is Corporate Capital ventures.
- Compliance Officer for the issue is Deepika Dixit.
Profile of the company
Rockingdeals Circular Economy (Rockingdeals CE) is primarily a B2-B re-commerce player which started its operations in 2005. The company is primarily engaged in bulk trading of excess inventory, open boxed inventory, re-commerce products and refurbished products. These products range in several categories such as small home appliances, apparel, kitchenware’s and household, speaker & mobile accessories, large appliances, footwear etc. These products are generally of various well-known brands such as Samsung, Thomson, MI, LG, symphony, ZARA, Nike, Reebok, Campus, Sony, JBL, Boat, Gizmore, One Plus, etc. As the company is more of B2B platform, Rockingdeals CE take the aforementioned products in bulk from various dealers of Inalsa, Khaitan etc and supplies these products in bulk to clients such as Jindal Mega Mart, Brand Wala, VLE Bazaar, HIC International, PSUAVI, KRAT India, Zazz Technology besides to its sister companies such as (Rockingdeals, Rockingdeals (HYD), Harkrishanji Products).
As on date the company has over 18 categories of Stock Keeping Units (SKU) i.e., electrical appliances (Syska, Havells, LG, Panasonic, Usha, Crompton, Luminous, Phillips etc.), apparels & footwear (Zara, Nike, Campus etc), speaker (Boat, JBL, Gizmore), mobile and mobile accessories (Lenovo, Boat, Gizmore etc) and various other products which the company procures from ecommerce vendors of platforms like Snapdeal (Juscorp), affiliates of Flipkart and Amazon etc; companies like GO Auto, Salora International, Zazz Technology Connect; and dealers & distributors like Matrix Housewares, Raj Agency, Sudhi Enterprises etc. It deals in bulk quantities, it procure the goods from its various vendors and mostly sell these products in bulk quantities itself. In order to store these products in bulk quantities it has a duly established, spacious and well connected to the National Highway No. 02, warehouse located at 12/03 Milestone, Near Sarai Metro Station, Mathura Road, Faridabad, Haryana.
Proceed is being used for:
- Meeting the working capital requirements of the company.
- Brand Positioning, Marketing and Advertisement.
- General Corporate Purposes.
Industry Overview
The demand for a wide range of consumer durable goods is growing as a result of the ongoing increase in disposable income and technological innovation in India. This in turn is fueling fierce competition among the various consumer durable brands that are available across the country. India is viewed by multinational organizations as one of the primary markets from which future growth is likely to originate. By 2025, India's Consumer Electronics and Appliances Industry is predicted to be the fifth-largest in the world. The Indian Appliances and Consumer Electronics (ACE) market is predicted to nearly double in the next 3 years, reaching approximately $ 17.93 billion (Rs 1.48 lakh crore) by 2025. The Indian appliances and consumer electronics industry stood at $ 9.84 billion in 2021, and is expected to more than double to reach Rs 1.48 lakh crore ($ 21.18 billion) by 2025. Electronics hardware production in the country stood at $ 63.39 billion in 2021.
Re-commerce, or reverse supply chain, entails offering new products in exchange for old ones; reselling returned products; repairing defective products; or recycling or refurbishing used products. It has great significance in today’s times when there is growing awareness amongst businesses and consumers about the need to make environmentally responsible choices. A report by Infogence Global Research estimated India’s re-commerce at $29.54 billion in 2022 and projected it to grow at a CAGR of 6.15 percent by 2027. Some of India’s leading online marketplaces, too, have taken to re-commerce for refurbished smartphones and appliances. The consumer trust and loyalty they have earned over the years now extends to their offerings of refurbished goods. These e-commerce players are driving better value realization and great experiences for consumers through technology-enabled features for easier accessibility, convenience, and affordability.
Pros and strengths
Diverse Product Portfolio & Quality Services: The company has a product portfolio of 18 SKUs which cater every segment of the society. From small home appliances to televisions and accessories, its extensive product portfolio ensures that it caters every aspect of end consumers requirements. With a commitment to delivering exceptional value and ensuring customer satisfaction. It has set very high standards for itself when it comes to timeliness and quality of service it provide to its clients. It had setup the stringent systems ensure that all the products reach its clients on stipulated time and there are minimum errors to ensure reduced product rejection. It has developed internal procedure of checking the client orders at each stage from customer order to delivery. The company focuses on maintaining the level of consistently in its service, thereby building customer loyalty for its Brand.
B2B Partner/Vendor Channel: Widespread vendors enable the remote and metro users to attract customers with great discounts and after sales support. This hassle- free service not just enable to save extra cost but also give varieties with many categories and many products. Further, the company has also set up a call centre staffed with skilled individual to further deeply penetrate the PAN India footprints created by it over last few years. The company’s after sales services includes Product related queries and Brand Warranty (if any). Under the product related queries, it generally receives the queries regarding the assembling or installation process of the products or appliances. Under the Brand Warranty (if any), Generally, the company does not offer the warranty on the products sell by its company in personal capacity but there are certain products on which the warranty is provided by the brand its self, the same benefit is being provided to the customers.
Experienced Promoters and Professional Management Team: The experience and diversity of the company’s directors, management team and its promoter have enabled the company to be recognized as a customer centric, process driven organization. Its management team is well qualified with significant industry experience and has been responsible for the growth in its operations. The experience and relationships that its management team has, have extended its operating capabilities, improved the quality of its services and facilitated access to its clients.
Risks and concerns
Business subject to seasonality: The company’s business is subject to seasonality as it sees higher demand of its products from its customers during the festive seasons which generally starts from Dusshera/Diwali/ Christmas / New Year onwards and higher demand from clients in third and fourth quarter of financial year, these two quarters contribute around 70% of its total revenue. Accordingly, its results of operations and financial condition in one or two quarter/period may not accurately reflect the trends for the entire financial year and may not be comparable with its results of operations and financial condition for other quarters/periods. Additionally, any significant event such as unforeseen economic slowdown, political instabilities or epidemics during these peak seasons may adversely affect its business and results of operations.
Possibility of defective products could result in liability issues: As the company engaged in the business of unboxed or excess inventory, there are huge chances of receiving defective and damage product from its vendors, therefore its business is inherently exposed to the risk of product liability, which arises due to the possibility that some manufacturers or vendors may not offer warranties for their products. In such cases, if the product found defective the company has to bear the cost of such defective products. Further the defective product led to costs associated with product repairs. Furthermore, if its products are sold without identifying the defect or perceived as defective and receive negative publicity, it could harm its brand image and reputation. Consequently, any of these factors has the potential to significantly and negatively impact its business, financial standing, and operational outcomes.
Face fair competition: The industry in which the company operates is fairly competitive and its results of operations and financial condition are sensitive to, and may be materially adversely affected by competitive pricing, latest consumer trends and technology. These frequent changes and their impact on consumer demand may result into both price and demand volatility, leading to change in the competitive scenario. Due to the expansive nature of its business, it faces competition from various kinds of players including, players operating in retail, wholesale and e-commerce space. Competition may result in pricing pressures, reduced profit margins, lost market share or a failure to grow its market share, any of which could substantially harm business and results of operations.
Outlook
Rockingdeals Circular Economy specializes in dealing with excess inventory across multiple brands in the B2B market. It assists businesses in liquidating their surplus stock, providing an efficient and effective solution for managing excess inventory. By leveraging its expertise in the industry, the company offers a range of services that enable companies to quickly and easily dispose of excess inventory, allowing them to free up valuable space and resources. It provides a seamless and transparent process that benefits both the seller and the buyer, resulting in a win-win situation for all parties involved. Overall, the company is well-positioned to provide a valuable service to businesses looking to manage their excess inventory. With a strong focus on sustainability and customer satisfaction, it is poised for continued success in the competitive B2B market. On the concern side, the company’s business is dependent on the trust customers have in the quality of products as well as on ability to protect brand value. Any negative publicity regarding the company, brands or products, including those arising from a drop in quality of products from vendors, or any other unforeseen events could adversely affect reputation, brand value, operations and results from operations.
The issue has been offered in a price band of Rs 136-140 per equity share. The aggregate size of the offer is Rs 20.40 crore to Rs 21.00 crore based on lower and upper price band respectively. On performance front, total revenue has decreased by 1.01% from Rs 15.33 crore in the fiscal year ended March 31, 2022 to Rs 15.17 crore in the fiscal year ended March 31, 2023. Net Profit has increased by 974.19% from Rs 14.36 lakh in the fiscal year ended March 31, 2022 to profit of Rs 1.54 crore in the fiscal year ended March 31, 2023. Meanwhile, the company is focusing to expand the scope of its current product line and introducing new products in both the high-end and mid segments. The company is taking various steps for growth through marketing activities and by maintain relationship with its clients. To achieve this, the company will start the marketing activities for this the company has taken an initiative for the customer relationship management and further the company has a plan to utilise the proceeds of IPO for brand position and marketing activities.
