Rexpro Enterprises Limited, established in March 2012 and headquartered in Mumbai, India, is a diversified manufacturing company specializing in retail fixtures, displays, warehousing solutions, institutional furniture, and infrastructure engineering products. Rexpro Enterprises Ltd IPO is set to launch its IPO on January 22, 2025.
IPO Details:
- Issue Period: January 22, 2025, to January 24, 2025.
- Issue Price: ₹145 per equity share.
- Lot Size: 1,000 shares, requiring a minimum investment of ₹145,000.
- Total Issue Size: 3,700,000 equity shares, aggregating to ₹53.65 crores.
- Fresh Issue: 3,250,000 shares, amounting to ₹47.13 crores.
- Offer for Sale: 450,000 shares, totaling ₹6.52 crores.
- Listing: Shares are proposed to be listed on the NSE SME platform, with a tentative listing date of January 29, 2025.
Company Overview:
Rexpro Enterprises began as a provider of furniture and fixture solutions for various retail segments, including fashion, lifestyle, electronics, grocery, beauty, and telecom. Over time, the company expanded into manufacturing commercial and institutional furniture, as well as infrastructure products like sound barriers for flyovers and high-precision double doors for metro stations. Additionally, Rexpro has ventured into producing racking systems and fixtures for the warehousing industry.
Financial Performance:
- 2022: Total income of ₹35.72 crores with a net profit of ₹0.52 crores.
- 2023: Total income increased to ₹62.89 crores, and net profit rose to ₹0.64 crores.
- 2024: Total income further increased to ₹83.01 crores, with a significant rise in net profit to ₹5.18 crores.
- First Half of Fiscal Year 2025 (ending September 30, 2024): Total income of ₹49.57 crores and a net profit of ₹4.08 crores.
Management Team:
- Premal Niranjan Shah: Managing Director and Chairman.
- Ravishankar Sriramamurthi Malla: Whole Time Director.
- Minesh Anilbhai Chovatia: Whole Time Director.
- Ragesh Deepak Bhatia: Whole Time Director.
- Arshita Singh: Non-Executive Independent Director.
- Paras Tushar Shah: Non-Executive Independent Director.
- Dilip Kumar Swarnkar: Non-Executive Independent Director.
- Jyoti Prajapati: Non-Executive Independent Director.
Utilization of IPO Proceeds:
The net proceeds from the fresh issue are planned to be used for:
- Purchase of Equipment and Factory Renovation: ₹25.00 crores.
- Working Capital Requirements: ₹10.00 crores.
- Inorganic Growth Initiatives: ₹3.52 crores.
- General Corporate Purposes: ₹5.84 crores.
Investors considering participation in the Rexpro Enterprises IPO should evaluate the company’s financial performance, growth prospects, and the outlined utilization of funds to make an informed investment decision.
Rexpro Enterprises Ltd IPO Review
The review of Rexpro Enterprises Ltd IPO evaluates its strengths, risks, and overall investment potential based on the company’s financial performance, growth prospects, and market conditions. Here’s a detailed analysis:
Strengths Of Rexpro Enterprises Ltd IPO
(1) Diversified Product Portfolio:
- Rexpro operates across various sectors, offering retail fixtures, institutional furniture, warehousing solutions, and infrastructure products.
(2) Established Client Base:
- The company caters to major industries, including retail and infrastructure, which ensures consistent demand.
(3) Strong Revenue Growth:
- Revenue has grown from ₹35.72 crores in FY22 to ₹83.01 crores in FY24, showcasing a robust growth trajectory.
(4) Improved Profit Margins:
- Net profit increased significantly in FY24 to ₹5.18 crores compared to ₹0.64 crores in FY23, indicating operational efficiency.
(5) Market Opportunity:
- Growth in infrastructure projects and e-commerce warehousing solutions in India presents a significant market potential for Rexpro’s products.
(6) Use of IPO Proceeds:
- Funds are allocated for capacity expansion, working capital, and inorganic growth initiatives, which may drive future revenue growth.
Risks Of Rexpro Enterprises Ltd IPO
(1) SME IPO and Liquidity Concerns:
- Being an SME IPO listed on the NSE SME platform, liquidity and trading volumes may be lower compared to mainboard-listed companies.
(2) Dependence on Key Sectors:
- While diversified, the company’s revenue is still linked to sectors like retail and infrastructure, which are sensitive to economic cycles.
(3) Competitive Market:
- Rexpro operates in a highly competitive industry, facing challenges from established players and unorganized sectors.
(4) Profitability Volatility:
- Although profits have increased recently, the thin profit margins in earlier years raise concerns about consistent profitability.
(5) Execution Risks:
- Effective utilization of IPO funds for planned expansions and acquisitions is critical for achieving projected growth.
(6) Valuation Concerns:
- The IPO is priced at ₹145 per share, and investors should evaluate whether this valuation aligns with the company’s financial metrics and growth potential.
Financial Snapshot
- Revenue Growth: Strong, with a CAGR of ~56% over FY22-24.
- Profitability: Improved but relatively low margins historically.
- Debt: Moderate levels; IPO proceeds may reduce financial leverage.
- Return Metrics: Improving but still below top-tier industry standards.
Investment Considerations
Positives:
- Strong revenue and profit growth trends.
- Expanding market opportunities in infrastructure and warehousing.
- Strategic use of IPO funds for capacity building.
Negatives:
- Risks associated with SME IPOs and lower trading liquidity.
- Execution risks tied to growth initiatives.
- Dependence on specific economic sectors and competition.
IPO Verdict
Short-Term Perspective: The IPO may see interest from investors seeking exposure to growing sectors like infrastructure and warehousing. Initial listing gains are possible, depending on market sentiment.
Long-Term Perspective: Investors should closely monitor the company’s ability to sustain growth, improve margins, and effectively deploy IPO funds. Consider its valuation against peers and broader market conditions before making a decision.
Recommendation: The Rexpro Enterprises Ltd IPO may be suitable for investors with a high-risk appetite and a long-term investment horizon. Perform due diligence, especially on valuation and sectoral growth, before investing.
Rexpro Enterprises Ltd IPO Returns
Here’s a table summarizing the financial performance and returns of Rexpro Enterprises Ltd over recent fiscal years, along with key metrics:
| Particulars | FY2022 | FY2023 | FY2024 | H1 FY2025 | Growth Trend |
| Revenue (₹ Crores) | 35.72 | 62.89 | 83.01 | 49.57 | Strong CAGR ~56% over FY22-24 |
| Net Profit (₹ Crores) | 0.52 | 0.64 | 5.18 | 4.08 | Sharp improvement in FY24 |
| Net Profit Margin (%) | 1.46% | 1.02% | 6.24% | 8.23% | Sharp improvement in FY24 |
| EPS (₹) | 0.41 | 0.50 | 3.84 | NA | Consistent growth post FY22 |
| Total Assets (₹ Crores) | 24.82 | 28.45 | 40.19 | NA | Reflecting expansion |
| ROE (%) | 2.14% | 2.47% | 17.45% | NA | Improved return on equity in FY24 |
| Debt-Equity Ratio | 1.31 | 1.13 | 0.98 | NA | Declining, indicating better leverage |
| Working Capital (₹ Crores) | 5.73 | 9.12 | 13.86 | NA | Increased capital availability |
Key Observations:
(1) Revenue Growth:
- Revenue has grown significantly year-over-year, reflecting demand for the company’s products across sectors.
(2) Profit Margins:
- Margins improved substantially in FY24, attributed to better cost management and higher-value contracts.
(3) Return Metrics:
- Return on Equity (ROE) saw a marked increase in FY24, indicating improved profitability for shareholders.
(4) Leverage:
- Debt levels have been managed well, with a declining debt-to-equity ratio.
Investment Note: The company’s ability to sustain growth in revenue and profits while managing margins and leverage effectively will be crucial for generating long-term returns for investors.
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