Graphisads
- Graphisads is coming out with an initial public offering (IPO) of 48,12,000 equity shares of face value of Rs 10 each for cash at a fixed price of Rs 111 per equity share.
- The issue will open for subscription on November 30, 2023 and will close on December 5, 2023.
- The shares will be listed on NSE Emerge Platform.
- The share is priced 11.10 times higher to its face value of Rs 10.
- Book running lead manager to the issue is First Overseas Capital.
- Compliance Officer for the issue is Shobharam Dhama.
Profile of the company
Graphisads is integrated marketing, advertising and communications agency, providing 360 degree solutions to its wide array of clients. The company is in the same industry for the past 35 years and is continuously expanding its business horizons with the moving trends across the world, reflecting its growing expertise in the marketing and advertising industry. The company provides advertising services on the work orders received by Government sector, Private sector and Public sector entities. The company neither outsource/sub-contracts the services provided to its clients nor does it have any contract with third party in this respect. It endeavors to maintain the quality of its services, follow strict procedures to ensure quality, timely delivery and competitive prices. It endeavors in going beyond just media, to understanding business needs of the brand and delivering complete communications solutions.
Wide area of scope of work being offered and provided by Graphisads to its clients make it is one of the few agencies that can truly claim to be a fully integrated and independent in providing the marketing and communications solutions. By integrated it mean that it offer creative, marketing strategy, on ground & virtual activation capabilities, and design solutions that help its clients in brand building. It provide high-end ecosystem and end-to-end ad-tech communication solutions platform for advertising media services consisting of Brand Strategy, Communication Strategy, Creative Services, Media Planning, Media Buying & Media Release services which covers advertisement modes such as Newspapers, Magazines, Radio and TV, Events & Exhibitions, Digital Media, Brochures Printing, and display of Outdoor Hoardings, Digital screens and street furniture In all such mediums of advertising ‘Creative’ exists i.e.; all the services are given keeping in the necessity of being creative, so that Graphisads can deliver most compelling communications to grab attentions of the public at large.
Proceed is being used for:
- Repayment of certain borrowings.
- Meeting the Working Capital requirements.
- General Corporate Expenses.
- Issue Expenses.
Industry overview
The Indian advertising market size reached Rs 743.0 Billion in 2022. Looking forward, expects the market to reach Rs 1,412.5 Billion by 2028, exhibiting a growth rate (CAGR) of 11.2% during 2023-2028. The growing adoption of advertising to enhance brand awareness, increasing number of media and entertainment models, and rising demand for digital advertising solutions represent some of the key factors driving the market. At present, the rising adoption of advertising by various companies to increase customer retention and attract new buyers represents one of the key factors supporting the growth of the market in India. Besides this, the growing adoption of advertising to enhance brand awareness and loyalty of a business is offering a positive market outlook in the country.
Additionally, there is a rise in the need for convenient and cost-effective advertising solutions among the masses. This, coupled with the increasing demand for digital advertising due to the rapid adoption of smartphones and smart devices with the ease of internet facilities, is propelling the growth of the market in the country. Apart from this, the rising trend of advertising through various sports events is offering lucrative growth opportunities to industry investors in India. Moreover, the increasing consumer preference towards online shopping, along with the burgeoning e-commerce industry, is positively influencing the market. In addition, various advertising agencies are rapidly investing in digital advertising in the country, which is contributing to the growth of the market. Furthermore, the rising number of media and entertainment models is strengthening the market growth in India.
Pros and strengths
Meeting expectation of clients and maintaining long term relationship with clients: Through research, captivating creative work, and smart media planning, the company wants to provide outcomes that meet or exceed its clients' expectations. With its clients, it aspires to establish lasting connections. It aims to gauge customer success by improved brand recognition, effects on sales volume, and other terms that have been mutually agreed upon by the clients. According to it, a key element in ensuring that its organisation keeps expanding is keeping positive client relationships. Through regular communication with its clients, understanding their needs in terms of location, target audience, concept, ad design, etc., and selecting the most suitable media source, it is able to not only draw in new clients but also foster repeat business with its current clients. It will keep placing a priority on providing high-quality services in a timely and correct manner since this will help it build long-lasting connections with its clients and raise its revenue from them.
Media and advertising: The company’s strength lies in its media and advertising. It develop digital brand strategies, communications, products and services that matter to target group of its clients by novelty, brand authenticity quality for higher brand awareness, engagement, sales and loyalty. It helps grow the brand awareness of its clients by engaging with the target audience and develop lasting customer relations. It helps its clients in giving value, engaging, inspiring, and entertaining their target audience. It also increase public awareness and drive long-term brand loyalty with content marketing for its clients.
Repeat Customers: The company makes an effort to maintain the quality of its services and adhere to tight standards to assure quality control, prompt service delivery, and affordable costs. Its ability to provide the service in accordance with the client's expectations and its understanding of those requirements are its strengths. This entails comprehending the needs of the client, such as location, target audience, concept, ad design, etc., and selecting the best media source that enables it to not only draw in new clients but also encourages repeat business from its current clients.
Risks and concerns
Derive significant portion of revenue from outdoor advertising services: The company derives a significant portion of its revenue from its outdoor advertising services business and is dependent on the cash flow generated from its outdoor advertising services business for the growth. Its outdoor advertising services business accounted for 41.07 %, 53.00 %, and 38.43 % of its total revenue from operations for fiscal 2023, fiscal 2022 and fiscal 2021, respectively. Consequently, factors that adversely affect the demand for outdoor advertising services or its position or reputation as a provider of such outdoor advertising services may adversely affect its business and profitability. The loss of a major customer could lead to a significant decrease in revenue, harm its reputation and reduce its ability to accurately predict cash flow. The risk of such a loss is increased by the fact that the integrated marketing, advertising and communications services are an extremely competitive segment in the advertising and marketing industry in India. All of these factors could have an adverse effect on its business, financial condition and results of operations.
Dependent on availability of space or sites for publishing of ads or displaying hoardings: The company’s main requirement for advertisement in the media, digital media, events, creative and outdoor media is dependent on the availability of ad space in that particular media such as availability of particular space in newspapers or spot time in broadcasting radio stations or availability of space at particular hoarding sites on which client wants to publish/display the advertisements. It procures these spots, spaces or sites on rents/ lease from respective publication houses, radio stations and agencies, whenever there is a requirement. Any non-availability of these space/sites for whatever reason, could adversely affect its sales and profitability. Further, any price volatility of these space/sites and its inability to adjust to the same could adversely affect results of its operations and profitability.
Dependent upon few suppliers for procurement of raw materials: The company is in advertising agency and to provide services to various clients hence, raw materials as such are not applicable in advertising and marketing industry. However, in the case of events and outdoor advertising/ marketing raw materials such as street furniture, site fixtures and fittings and other consumables are required and accordingly deployed. In this regard, for the year ended March 31, 2023, 2022 and 2021, its top 10 suppliers contributed around 57.32%, 47.48% and 46.50% respectively of its purchases. In the event of a delay and/ or inadequacy or default in deliveries and /or non-adherence to quality requirements by any of its vendors, it may not be able to source the raw materials at all or in a timely manner and / or on commercially acceptable terms. In such a scenario, it could adversely affect ability to meet its customers’ requirements, its business, results of operations and financial conditions.
Outlook
Graphisads is an integrated marketing, advertising, and communications agency providing 360-degree solutions to its wide array of clients. It provides advertising services on the work orders received by the Government sector, Private sector and Public sector entities. The company also offers high-end ecosystem and end-to-end ad-tech communication solutions platform for advertising media services consisting of Brand Strategy, Communication Strategy, Creative Services, Media Planning, Media Buying and Media Release services which cover advertisement modes such as Newspapers, Magazines, Radio, and TV, Events & Exhibitions, Digital Media, Brochures Printing, and display of Outdoor Hoardings, Digital screens and street furniture. The company’s Promoter has extensive market knowledge and has contributed significantly to the company's steady growth. Its management and staff pool their knowledge and experience to make plans for the future growth of its business. On the concern side, the sales of the company is widely dispersed throughout India and any failure to maintain such dispersion may impact sales, revenues, and consequently, the financial performance of the company. Further, any failure in expanding its geographical presence within India may lead to loss of opportunity in earning higher revenue thereby effect its growth and profit in the company.
The company is coming out with an IPO of 48,12,000 equity shares of Rs 10 each at a fixed price of Rs 111 per share to mobilize Rs 53.41 crore. On performance front, the total income of the company for fiscal year 2023 was Rs 9904.81 lakh as against Rs 8972.49 lakh total income for Fiscal year 2022. Profit after tax for the Fiscal 2023 was at Rs 556.62 lakh as against Rs 558.19 lakh in fiscal 2022, a 0.2% decrease. Meanwhile, the company’s main goals are to have more customer relationships and more relationship managers to take care of such relationships. Its goal is to develop more customer connections, which it will subsequently use to its advantage to introduce a full line of media goods. Having more client ties will stabilise the company’s revenue during market downturns. In order to utilise its current group offers and attract new client connections, it also intends to expand its sales force as part of this.
