Epack Prefab Technologies IPO: 10 Key Things To Know Before You Bid — Read Anand Rathi's Report

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Anand Rathi Report

Epack Prefab Technologies' initial public offering will open for subscription today and will conclude on Sept. 26.

Here are the 10 things to know before investing

1. The Epack Prefab Technologies' initial public offer will launch today and the offer closes for subscription on Sept. 26.

2. The pre-engineered, pre-fab steel building and packaging solution provider has fixed the price band between Rs 194 and Rs 204 per equity share.

3. Investors can place bids starting from a minimum of 73 shares and in multiples thereafter.

4. The Rs 504-crore IPO comprises a fresh issue of 1.47 crore shares worth Rs 300 crore and an offer-for-sale of one crore shares amounting to Rs 204 crore.

5. Monarch Networth Capital Ltd. is the book running lead manager and KFin Technologies Ltd. is the registrar of the issue.

6. Shares of Epack Prefab Technologies are expected to be listed on the BSE and NSE on Oct. 1.

7. Objects of the Issue:

   Financing the CapEx requirements for new manufacturing Facility at Ghiloth and existing facility at Mambattu.

   Repayment of borrowings and General Purpose.

8. Strengths:

   Strong and diverse market presence with comprehensive offerings in the growing pre-engineered steel buildings industry.

   Strategically located manufacturing facilities and strong in-house design and engineering capabilities give us a significant cost advantage.

   Long-standing relationships with customers across a diverse set of industries.

   Strong financial performance and Order Book.

   Experienced Promoters and Management team with extensive domain knowledge.

9. Key Strategies:

   Increase installed capacity through proposed expansions to capitalize on the rapid growth of the pre-engineered steel building industry.

   Deepen geographical footprint for the Pre–Fab business to cater to strategic markets domestically while also expanding internationally.

   Increase wallet share from existing customers as well as expand customer base.

   Continue to invest in technology infrastructure and design capabilities to enhance in-house design, engineering and manufacturing capabilities.

   Leverage growing demand for environment friendly structures.

10. Key Risk:

    Legal and Regulatory Risk: The company must comply with various laws, including environmental regulations. Currently, the Uttar Pradesh Pollution Control Board has filed a complaint against it for violating the Commission for Air Quality Management Act, 2021. If penalties or unfavorable decisions are imposed by regulators, it could harm the company’s results.

    Customer Concentration Risk: A large portion of the company’s EPS Packaging revenue comes from its top 10 partners 80.1% in FY23, 76.0% in FY24, and 71.0% in FY25. Losing one or more key customers, a drop in demand, or a reduction in fees can adversely impact its financial performance.

    Geographic Concentration: Most of the company’s revenue (57.2% in FY23, 75.6% in FY24, and 64.8% in FY25) comes from North, Central, and Western India, with major manufacturing facilities in Greater Noida and Rajasthan. Any regulatory, economic, or industry changes in these regions could negatively affect the company.

Valuation:

Epack Prefab technologies established in pre-engineered, Pre-fab building model and packaging business making it niche player in infrastructure segment.

Over the years, it has built strong and long-standing client relationships with marquee clients. In EPS packaging, it holds ~8% domestic market share.

The company expertise lies in cost-effective, high-quality pre-engineered steel building solutions has positioned it as a reliable partner across sectors.

The company is well placed for future growth, backed by strong customer relationships, successful completion of over 4,400 projects for nearly 2,000 clients during FY23–FY25, and clear capacity expansion plans of 24,000 MTPA in Pre-Fab and 8,00,000 sq. meters in sandwich panels.

On the valuation front, based on annualized FY25 earnings, the company is seeking a P/E of 34.5 times and EV/Ebitda of 15.4 times, and a post-issue market capitalization of approximately Rs 20,492 million, making the issue appears to be aggressively priced.

The company leverages process innovation and advanced technology to enhance efficiency and customization, while cost competitiveness enables prefab solutions that balance affordability and functionality, driving sustainable growth in long run.

Hence, we assign Subscribe for long term rating for the issue.

Click on the attachment to read the full IPO report:

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