On Door Concepts IPO: Issue Opens on October 23, Issue Price Fixed at Rs 208 | Complete Details Inside

On Door Concepts IPO

The IPO of On Door Concepts, a prominent omni-channel retailer, is generating considerable buzz in the financial market.

With its subscription period set to begin on October 23, this IPO is making waves due to its attractive features and the company’s promising financial outlook.

Here, we delve into every aspect of this IPO, providing you with a comprehensive understanding of what On Door Concepts has to offer to potential investors.

Key Details about On Door Concepts IPO:

The On Door Concepts IPO is slated to open for subscription on October 23, 2023. The company aims to raise a total of Rs 31.18 crore through this public offering.

The offer price for each share has been fixed at Rs 208. Investors have the opportunity to invest in this IPO until October 27, providing a limited window of opportunity for those interested in acquiring shares of this growing omni-channel retailer.

A total of 14.98 lakh fresh equity shares will be issued under this IPO. It’s worth noting that the initial issue size was reduced after the company raised Rs 7.39 crore through a pre-IPO placement of 2,85,200 shares at a price of Rs 259 per share.

Despite the reduction in the issue size, On Door Concepts is poised to be the fifth company to debut in the SME (Small and Medium-sized Enterprises) segment in October.

Details Related to the IPO:

The company has made certain allocations for different categories of investors. Out of the total shares on offer, 86,400 shares are reserved for market makers, while the remaining 14,12,400 shares are designated for the net issue.

Retail investors and high net worth individuals have an allocation of 7,06,200 shares. Investors are required to bid for a minimum of 600 shares and can subsequently invest in multiples of this minimum amount. For retail investors, this implies a minimum investment of Rs 1,24,800.

Utilization of Funds:

The primary use of the funds raised through this IPO is as follows: On Door Concepts intends to utilize Rs 20.43 crore to meet its working capital needs, with the remaining Rs 7.24 crore allocated for general corporate purposes.

In its prospectus, the company stated, “Taking into account the current and future growth, the total net working capital requirement of our company on an internal basis is expected to reach Rs 22.01 crore for FY24.”

This reflects the company’s forward-looking approach and its intention to facilitate further growth and expansion.

About On Door Concepts:

On Door Concepts is a regional omni-channel retailer with a strong focus on groceries and household essentials. The company embarked on its journey with the opening of its first store in Bhopal in January 2015.

Since then, it has expanded its footprint and reached a significant milestone, operating 17 stores. It’s worth noting that a portion of these stores operates through a franchise model, indicating the company’s willingness to adopt various strategies for growth and expansion.

Financial Position of On Door Concepts:

One of the key factors that make this IPO intriguing is the financial turnaround On Door Concepts has achieved. In FY23, the company reported a profit of Rs 0.06 crore, a remarkable shift from a loss of Rs 5.4 crore in the previous year.

This impressive transformation indicates a positive trajectory for the company. Additionally, revenue from operations increased from Rs 173.1 crore to Rs 180.1 crore during the same period, underlining the company’s growth in terms of sales.

The company’s EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) has displayed significant improvement over the last few years.

In FY23, it grew by an impressive 189.5% year-on-year, reaching Rs 4.03 crore. Even in FY22, it displayed an 88% increase to Rs 1.39 crore. These figures indicate a strengthening financial performance, showcasing the potential for sustainable growth.

For the five-month period ending August 2023, the company reported a profit of Rs 0.56 crore and an EBITDA of Rs 2.23 crore on revenue of Rs 70.26 crore.

This indicates that the positive financial momentum is continuing into the current fiscal year, which can be seen as an encouraging sign for potential investors.

Listing Date and Gray Market Premium:

The IPO journey does not end with subscription; there are key dates and milestones to consider. The company plans to allot shares to successful investors until November 1, 2023.

Subsequently, these shares will be credited to the demat accounts of successful investors by November 3, 2023. Trading of On Door Concepts shares on the NSE Emerge platform is set to commence on November 6, 2023.

As for the gray market premium, it’s currently estimated at 12% over the offer price. This indicates strong demand and interest from investors even before the shares are listed on the stock exchange.

However, it’s important to note that gray market premiums can fluctuate and are influenced by various market factors. This is a dynamic aspect of the IPO process that potential investors should closely monitor.

IPO Management Team and Advisors:

To gain a more comprehensive understanding of any company going public, it’s essential to take a closer look at its management team and advisors.

The success and performance of a company often depend on the experience and expertise of its leadership.

In the case of On Door Concepts, the company is expected to benefit from a dedicated management team and a group of advisors with extensive knowledge of the industry.

Investment Considerations and Potential Risks:

As with any investment opportunity, it’s important for potential investors to consider both the advantages and risks associated with On Door Concepts’ IPO. Here are some key considerations:

Advantages:

1. Growth Potential: The company has demonstrated impressive financial growth, turning profitable and achieving substantial revenue growth.
2. Unique Business Model: On Door Concepts operates as an omni-channel retailer, catering to the demand for groceries and household essentials, which are fundamental and evergreen needs.
3. Positive Industry Trends: The focus on groceries and essential items has been accentuated by the COVID-19 pandemic, making this sector particularly appealing.
4. Experienced Management: With an experienced management team and advisors, the company is well-positioned for continued growth.
5. Gray Market Demand: The initial gray market premium of 12% suggests strong interest from investors.

Potential Risks:

1. Market Volatility: As with any investment, there’s always a level of market risk. Stock prices can be subject to volatility and can be influenced by market conditions and external factors.
2. Competition: The retail sector is highly competitive, and On Door Concepts will need to continue to differentiate itself to maintain its growth trajectory.
3. Operational Challenges: Scaling a retail business can be challenging, and the company will need to effectively manage its operations to sustain its growth.
4. Regulatory Changes: Changes in regulations or government policies can impact the retail industry.
5. Consumer Behavior: Shifts in consumer behavior and preferences can affect the performance of retail companies.
6. Gray Market Premium: The gray market premium is subject to change and may not accurately reflect the actual market performance.

Key Advisors and Service Providers:

• Merchant Banker: First Overseas Capital is the appointed merchant banker for the IPO. Merchant bankers play a crucial role in the IPO process, guiding the company through the regulatory and financial aspects of the offering.
• Registrar to the Offer: BigShare Services has been appointed as the registrar to the offer. Registrars are responsible for processing share applications, allotment, and refunds.

Final Thoughts:

The On Door Concepts IPO represents an exciting opportunity for investors to be part of the growth story of a regional omni-channel retailer with a focus on essential products.

The company’s financial performance has shown a remarkable turnaround, which is particularly appealing for potential investors.

However, as with any investment, there are risks involved, and market conditions can change. It’s essential for prospective investors to conduct their own due diligence and consult with financial advisors if necessary to make informed investment decisions.

The gray market premium is currently indicative of strong demand, but it’s subject to change, and investors should consider this dynamic aspect of the IPO process.

The subscription period for the On Door Concepts IPO begins on October 23, 2023, and investors have until October 27, 2023, to participate.

The company’s shares are expected to be credited to demat accounts by November 3, and trading will commence on NSE Emerge on November 6.

The success of this IPO and the future performance of On Door Concepts will undoubtedly be a subject of interest and observation in the financial market.