Naman In-Store (India) coming with IPO to raise upto Rs 25.35 crore

Naman In-Store (India) 

• Naman In-Store (India) is coming out with initial public offering (IPO) of 28,48,000 shares of Rs 10 each in a price band Rs 84-89 per equity share.  
• The issue will open for subscription on March 22, 2024 and will close on March 27, 2024.
• The shares will be listed on NSE Emerge Platform.
• The face value of the share is Rs 10 and is priced 8.40 times of its face value on the lower side and 8.90 times on the higher side.
• Book running lead manager to the issue is GYR Capital Advisors.
• Compliance Officer for the issue is Ritik Madnani.

Profile of the company

The company is one of the prominent display and retail furniture & Fixture Company with a broad spectrum of offerings and in-store solutions to various industries and retail stores. Further, it manufactures modular furniture for offices, beauty store, low-housing kitchens, educational institution as well as supermarket shelving solutions. The company specializes in the design and execution of turnkey projects by bringing together under the same roof all of the resources necessary to meet the needs of any fit-out project. It specialises to provide one-stop solutions across multiple retail stores and industries as all engineering and shop drawing is performed in-house, under one roof. 

It manufactures in-store customised furniture and fixtures in wood, metal and plastic and in respect of kiosks, full shops, Countertop Units (CTU), Countertop Display Unit (CDU), Point of Sales Merchandising (POSM), etc. it operates on a B2B (Business-to-Business) model. Its range of fixtures is designed to enhance the visual appeal and functionality of retail spaces. It has a diverse clientele spanning different geographies, industry verticals, and service offerings. It understands the customer needs, market trends mapping and provide value for money products. It is consistent in supplying of quality products round the year as customized products are made available to them as per their requirement and market demand. 

As on September 30, 2023 it has served around 32 retail customers and their franchises and 04 industrial customers. It has a team of highly experienced professionals and skilled manpower. The company and its executives have developed the skill and expertise in designing and innovation of customised display and in-store furniture & fixtures solutions through its in house technical and design team to provide turnkey solutions and its implementation. It has a team of experienced designers dedicated to design products and to keep pace with the constantly changing times and the demand. The company has its manufacturing facilities located at Vasai, Maharashtra. The company has well established and high-tech manufacturing equipments and design facility to manufacture the various combination and size products as per the design and specification of clients. 

Proceed is being used for:

• Funding capital expenditure of the company to acquire land on leasehold basis at Butibori, MIDC and proposes to shift the existing manufacturing facilities of the company.
• Construction of factory building.
• General corporate purposes.

Industry overview

India’s retail sector is experiencing robust growth driven by several factors. The country is experiencing a steady increase in national wages, rapid urbanization and the emergence of the digital economy. Lower-tier cities no longer have to rely solely on physical stores, as an expanding network of last-mile logistics suppliers enables access to preferred brands through online platforms. The retail landscape in India offers a wide array of choices, including global e-commerce platforms, single-brand shopping websites, multi-retail apps, and social media sellers. Furthermore, discretionary spending power is on the rise, with the average per capita income in India surpassing $2000 and projected to exceed $12,000 by 2047.

India has the third-highest number of e-retail shoppers (only behind China, the US). The new-age logistics players are expected to deliver 2.5 billion Direct-to-Consumer (D2C) shipments by 2030. Online used car transaction penetration is expected to grow by 9x in the next 10 years. According to recent industry reports, the e-commerce industry witnessed a phenomenal 36.8% YoY growth in terms of order volumes. As consumers prefer to shop online throughout the year, this fast-changing consumer preference for online shopping reveals the mature status acquired by e-commerce brands in India.

As per latest provisional estimate published on 31st May 2023, India’s per capita Net National Income (NNI) at constant (2011-12) prices increased by 35.12% from Rs 72,805 in 2014-15 to Rs 98,374 in 2022-23. In 2023, consumer spending is expected to grow at a rate of 7.1 percent annually. While inflationary pressures have impacted post-pandemic spending recovery, discretionary purchases and non-essential spending are predicted to bounce back in 2024. The retail sector of India is one of the most important emerging sectors, and therefore, Foreign Direct Investment (FDI) in the retail sector plays a very crucial role in the economic growth and development of the country. At present, FDI in single-brand retailing is permitted up to 100%, whereas in multi-brand retailing, it is allowed uptill 51% only.

Pros and strengths

Skilled and dedicated manpower: The Company is managed by a team of experienced personnel. The team comprises of personnel having technical, operational and business development experience. Its management team‘s experience and their understanding of the industry enable it to continue to take advantage of both current and future market opportunities. It takes pride in relating its success to its employees for their consistent efforts and dedication they have shown towards the Company. It requires application of high levels of technology at key stages of design and manufacturing processes. 

Integrated manufacturing facilities: It provides one stop solutions to its customer as per their requirement. Therefore, it does continuous endeavour to maintain the requisite infrastructure and technological up gradation for the smooth running of the manufacturing process as well as to cope with the changing market demand situation. 

Strong & Long term relationship with clients: Customer satisfaction and long-standing relationship with clients is the key to success for any organization. It’s on time delivery and quality product helps it maintains strong relationship with its customers and also gives the company competitive strength against its peers. It constantly tries to address customer needs which help it to maintain a long term working relationship with its customers and improve its customer retention strategy.

Risks and concerns

Maximum revenues are derived from few geographical regions: A significant portion of its revenue from operations is derived from its services offered to customers in Maharashtra. For six months period ended September 30, 2023, Fiscals ended 2023, 2022 and 2021 its revenue generated from operations in Maharashtra was Rs 4096.77 lakh, Rs 5828.34 lakh, Rs 3147.98 lakh and Rs 595.55 lakh respectively, which represented 51.72%, 38.90%, 61.73% and 44.51% of its revenue from operations for such periods respectively. Any decrease in revenue from Maharashtra, including due to increased competition or supply, or reduction in demand, or its inability to extend or renew subsisting contracts at commercially viable terms, may have an adverse effect on its business, cash flows, results of operation and financial condition.

Dependent on third party transportation providers: The Company uses third party transportation providers for supply of raw material and delivery of its goods. Though its business has not experienced any disruptions due to transportation strikes in the past, any future transportation strikes may have an adverse effect on its business. In addition, goods may be lost or damaged in transit for various reasons including occurrence of accidents or natural disasters. There may also be delay in delivery of products which may also affect its business and results of operation negatively. An increase in the freight costs or unavailability of freight for transportation of its raw materials may have an adverse effect on its business and results of operations.

Do not entered into long-term contracts with customers: It does not have any long-term or exclusive arrangements with any of its customers. In the event its competitors’ products offer better margins to such customers or otherwise incentivize them, there can be no assurance that its customers will continue to place orders with the company. Most of its transactions with its customers are typically on a purchase order basis without any commitment for a fixed volume of business. There can also be no assurance that its customers will place their orders with it on current or similar terms. In the event of frequent cancellations of purchase orders, the same could have a material adverse effect on its business, financial condition, results of operations and cash flows.

Outlook

The company is one of the prominent display and retail furniture & Fixture Company with a broad spectrum of offerings and in-store solutions to various industries and retail stores. Further, it manufactures modular furniture for offices, beauty store, low-housing kitchens, educational institution as well as supermarket shelving solutions. The company specializes in the design and execution of turnkey projects by bringing together under the same roof all of the resources necessary to meet the needs of any fit-out project. On the concern side, Any decrease in revenue from Maharashtra, including due to increased competition or supply, or reduction in demand, or its inability to extend or renew subsisting contracts at commercially viable terms, may have an adverse effect on its business, cash flows, results of operation and financial condition. 

The company is coming out with an IPO of 28,48,000 equity shares of face value of Rs 10 each. The issue has been offered in a price band of Rs 84-89 per equity share. The aggregate size of the offer is around Rs 23.92 crore to Rs 25.35 crore based on lower and upper price band respectively. On performance front, the total income of the company for fiscal year 2023 was Rs 14,993.50 lakh against Ra 5,109.30 lakh total income for Fiscal year 2022. An increase of 193.46% in total income. Profit after tax for the Fiscal 2023 was at Rs 381.71 lakh against profit after tax of Rs 21.24 lakh in fiscal 2022, a 1696.78% increase. Meanwhile, it intends to leverage its existing business model and reach new customers and also reach new geographies, such as USA with the aid of its marketing strategy which is to participate in various domestic and international exhibitions, direct interaction with prospective customers on the receipt of enquiries and also market its products to its existing customers.