Sellowrap Industries
- Sellowrap Industries is coming out with an initial public offering (IPO) of 36,48,000 equity shares in a price band Rs 79-83 per equity share.
- The issue will open on July 25, 2025 and will close on July 29, 2025.
- The shares will be listed on SME Platform of NSE.
- The face value of the share is Rs 10 and is priced 7.90 times of its face value on the lower side and 8.30 times on the higher side.
- Book running lead manager to the issue is Gretex Corporate Services.
- Compliance Officer for the issue is Shrushti Jignyanshu Gandhi.
Profile of the company
Sellowrap Industries is a manufacturing company, headquartered in Mumbai, specializing in the production of customized components for the automotive, non-automotive and white goods industries. Operating in the B2B sector, it offers both adhesive and non-adhesive processed components, delivering solutions that emphasize quality, cost-efficiency, and maximum customer value.
The company has been serving major Original Equipment Manufacturers (OEMs) in India and abroad, by manufacturing components from a wide range of foam and plastic grades. Under the leadership of Sushil Kumar Poddar and Saurabh Poddar, with 32 and 18 years of experience respectively, the company continues to achieve robust growth by integrating innovation, operational efficiency and a customer-centric approach.
With manufacturing facilities operating at Gurugram, Ranipet, Kancheepuram, and Pune spread across around 5 acres of cumulative production area. Its manufacturing units are equipped with latest technology and backed by centralized R&D centers and warehouses, ensuring that its products consistently meet global quality standards. Its R&D laboratory is dedicated to the continuous innovation of new products through rigorous testing and chemical experimentation. The laboratory, serving as an industrial plant, enables it to test processes and techniques before full-scale production, ensuring operational efficiency and product excellence.
Proceed is being used for:
- Capital expenditure towards purchase of plant & machinery, infrastructure development and other auxiliary equipment’s
- Funding the working capital requirements of the company
- General corporate purposes
Industry Overview
The automotive component industry is an important sector of the Indian economy and a major foreign exchange earner for the country. There are around 400 major players in the auto component sector. Most of them are distributed in the north, south, and western parts of India around major Automotive Vehicle Manufacturers (AVMs). These AVMs contributed largely towards the development of component suppliers through technical and or financial collaborations. The automotive component industry manufactures a wide range of parts including castings, forgings, finished, semifinished components, assemblies, and subassemblies for all types of vehicles produced in India. Presently, the Indian automotive component industry is highly fragmented. This industry can be divided into the organized and the unorganized categories of manufacturers. The organized component manufacturers supply components to at least one of the Original Equipment (OE) vehicle manufacturers. They also have access to technology due to their tie-ups with some of the foreign collaborators or through associate AVM.
The automobile component industry turnover stood at Rs 6.14 lakh crore ($74.1 billion) during FY24, registering a revenue growth of 9.8% as compared to FY23. Domestic OEM supplies contributed ~54% to the industry’s turnover, followed by domestic aftermarket (10%) and exports (18%), in FY24. The component sales to OEMs in the domestic market grew by 8.9% to Rs 5.18 lakh crore ($62.4 billion). The aftermarket for auto components grew by 10.0% during FY24 reaching Rs 9.38 lakh crore ($11.3 billion). Over FY16 to FY24, the automotive components industry registered a CAGR of 8.63%, reaching $74.1 billion in FY24. The auto component industry exported $21.2 billion and imported $20.9 billion worth of components during 2023-24, resulting in the trade surplus of $300 million.
The domestic Passenger Vehicle (PV) market is expected to expand by six to nine percent in the current fiscal year compared to the previous year. In concrete numbers, the PV sector is projected to achieve sales of 4.2 million units in the ongoing financial year. The number of charging stations stood at 1,800 in March 2021 and is expected to reach 4 lakh by 2026. This would make it easier for the auto component industry to take advantage of the EV opportunity and expertise in EV components manufacturing, thus helping India on a global scale. The Indian government is exempting imports of capital goods and machinery essential to produce lithium-ion cells used in EV batteries from customs duty. This, coupled with the shift in global supply chains, will help the Indian global automotive component trade to expand 4-5% yearly to $80 billion by 2026. Moreover, the Indian auto component industry is the third largest in the world.
Pros and strengths
Focus on quality control, safety and Zero Defects: The company’s focus on quality and safety has solidified its reputation in the automotive industry. As of now, the company takes immense pride in maintaining a track record of zero defects in its products and no customer complaints. This commitment to precision is the result of rigorous quality control measures and meticulous attention to every detail during the manufacturing process. Its dedication to producing defect-free, reliable, and performance components underscores its role in ensuring customer satisfaction and trust.
Comprehensive portfolio: It takes pride in offering a comprehensive portfolio of performance components designed to meet the specific needs of both automotive and non-automotive industries. Its product range includes innovative solutions such as Plastic Injection Moulded Parts, Polyurethane Foam Moulding (PU Foam), Foam Components, Stickers and Labels, Screen Sealing Parts, EPP Parts and Other Customized Solutions. Each product is engineered for performance, durability, and functionality, addressing a variety of applications across diverse sectors.
Integrated manufacturing facility: Its manufacturing facilities are designed to meet the standards of quality, efficiency, and technological advancement, ensuring that it consistently deliver products to its customers. Spanning around 5 acre strategic automotive hubs in NCR, Maharashtra and Tamil Nadu, its facilities are strategically located near major OEMs and Tier-1 customers, enhancing operational efficiency and reducing lead times. These plants are equipped with machinery and technology, enabling precision production and meeting the stringent requirements of the automotive industry.
Risks and concerns
Maximum revenue comes from few customers: The company derives a significant portion of its revenue from a concentrated group of top customers, with its top 10 customers contributing a major share of its gross sales for the financial years ending March 31, 2025, March 31, 2024 and March 31, 2023. This heavy reliance on a limited customer base presents a risk of revenue volatility. The loss of one or more of these key customers, or a reduction in the volume of business due to reasons such as non-renewal of arrangements, disputes, adverse economic conditions, changes in customer supply chain strategies, or a shift to competitors, could significantly impact its business operations, financial condition, and cash flows.
Higher debt-equity ratio: The company has higher debt-equity ratio which requires significant cash flows to service its debts obligations. The company has a debt equity ratio of 0.81, 0.96 and 1.11 in FY25, FY24 and FY23 respectively. The company’s ability to meet its debt service obligations and repay its outstanding borrowings will depend primarily on the cash generated from its business, which depends on the timely repayment by its customers. Its financing agreements and instruments contain certain restrictive covenants that limit its ability to undertake fund raising activities, any of which could adversely affect its business, results of operations and financial condition.
Automotive Industry is highly competitive with limited market players: The automotive industry where price competitiveness is crucial for retaining key customers and expanding its market share. To secure bulk orders, it may need to offer price reductions or discounts on certain products. While such strategies can help increase overall sales volume, they may also compress profit margins, potentially impacting on its financial stability and future growth prospects. At times, it is required to reduce prices to retain key customers or expand its market share within existing client relationships. However, any reduction in its product prices impacts on its profit margins, potentially leading to material adverse effects on its financial condition, operational results, and long-term business prospects.
Outlook
Sellowrap Industries engages in the manufacturing of components for the automotive and white goods sectors. The company provides adhesive and non-adhesive components, focusing on quality, cost-efficiency, and customer value. The company focuses on quality control, safety and Zero Defects. The company has portfolio of components for automotive and non-automotive industries. On the concern side, the company depends on a limited number of customers for a significant portion of its revenues. The loss of a major customer or significant reduction in demand from any of its major customers may adversely affect its business, financial condition, results of operations and prospects. Moreover, the company has higher debt-equity ratio which requires significant cash flows to service its debts obligations, and this, together with the conditions and restrictions imposed by its financing arrangements, fluctuations in the interest rates may limit its ability to operate freely and grow its business.
The company is coming out with a maiden IPO of 36,48,000 equity shares of Rs 10 each. The issue has been offered in a price band of Rs 79-83 per equity share. The aggregate size of the offer is around Rs 28.82 crore to Rs 30.28 crore based on lower and upper price band respectively. On performance front, the company’s revenue from operations increased from Rs 13,802.40 lakh for the financial year ended on March 31, 2024 to Rs 16,245.01 lakh for the financial year ended on March 31, 2025 representing a rise of 17.70%. Moreover, its profit after tax for the year increased from Rs 594.52 lakh for the financial year ended on March 31, 2024, to Rs 997.16 lakh for the financial year ended on March 31, 2025, representing an increase of 67.73%.
The company’s expansion strategy focuses on a combination of organic growth and inorganic growth through strategic partnerships and joint ventures. Collaborating with companies that offer complementary strengths allows it to scale operations quickly, broaden its market reach, and unlock new growth opportunities. These alliances help it to maximize synergies, improve overall performance, and reinforce its industry leadership. Its geographical expansion efforts prioritize penetrating underserved regions to expand its footprint and connect with new customer segments. By customizing its marketing and product strategies to meet the unique demands of these areas, it aims to capture untapped market share. This localized approach strengthens its presence, drives sustained growth, and positions it to achieve long-term market success.
