IKIO Lighting IPO Review: IKIO Lighting Limited is coming up with its Initial Public Offering. The IPO will open for subscription on 6 June 2023, and close on 8 June 2023. In this article, we will look at the IKIO Lighting IPO Review 2023 and analyze its strengths and weaknesses. Keep reading to find out! 

IKIO Lighting IPO Review – About The Company

The company was incorporated as Ikio Lighting Private Ltd on March 21, 2016, having an industry presence of over 6 years. Initially, the company began operations in manufacturing refrigerator lights, before transitioning to various LED lighting solutions.

The company is largely an Original Design Manufacturer that designs, manufactures and supplies products to customers. They produce LED lighting products, across their four manufacturing plants present between NCR and Uttarakhand, India. The company has a combined manufacturing presence of over 18 million fixtures on an annual basis, with 58,000 final products being assembled every 12 hours. 

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Services Provided by the Company

IKIO Lighting Ltd has a diversified products portfolio which includes:

  • LED lighting
IKIO Lighting Products

(Source: RHP of the company)

  • ABS Piping used in recreational vehicles
  • Refrigerator LED lighting
  • Fan Regulators and Switches
  • LED Spare Parts & Others 

IKIO Lighting IPO Review – Financial Highlights

If we look at the financials of IKIO Lighting IPO we find out that their assets have grown from Rs.144.83 crores in March 2020 to Rs.335.50 crores in December 2022. 

Similarly, the company has even witnessed significant growth in its revenue, it has grown from Rs. 221.83 crores in March 2020 to Rs. 334.00 crores in March 2022. As of December 2022, the company’s revenue stood at Rs 332.79 crores for FY23 which is close to the FY22 earnings and also a clear indication of the company exceeding its revenue once again. 

The profits of the company have also followed a similar trend. Their profits have grown from Rs. 21.41 crores in March 2020 to Rs. 50.52 crores in March 2022. As of December 2022, the company’s profits stand at Rs 51.35 crores for FY23 which is already exceeding the net profit of the previous financial year.  

It is also important to note that the company’s borrowing has increased from Rs. 46.86 crores In March 2020 to Rs.136.33 crores on December 22.

IKIO Lighting IPO Review - Financials

(Source: RHP of the company)

IKIO Lighting IPO Review – Competitors

IKIO Lighting IPO Review - Competitor

(Source: RHP of the company)

Strengths

  • The company is well-positioned to capture growth in the LED market, which is driven by various factors some of which include a rise in smart city/ infrastructure projects and an increased demand for energy-efficient lighting 
  • The company offers a diverse range of products ranging from LED lighting to ABS pipings which help the company spread into different industries. This helps them capture customers from different segments allowing them to increase their market share.
  • The company has supplied its products to almost 900 customers and 16 international customers. The company also has relationships with leading industry customers like Signify (Philips), Western Refrigeration Private Limited, Panasonic Life Solutions India Private Limited and Novateur Electrical & Digital Systems Private Limited
  • The R&D department generates ODM designs independently, as well as evaluates and develops OEM designs obtained from clients, and converts such designs into deliverable products by enhancing the designs, suggesting suitable raw materials, and testing the trial products
  • Apart from the diodes and resistors used in for LED lighting products, all mechanical components are manufactured by the company with their in-house tool room.

Weaknesses

  • A significant portion of the company’s revenue is gained through Signify Ltd and 85% of its revenue is gained through 20 of its top customers. Any delay or reduction in the demand or termination of the relationship by any of the key customers will disrupt the flow of business.
  • The company does not have a long-term agreement with any of its customers. This means that the company operations will be adversely affected if the customers do not renew their contracts.
  • For its components, supplies, and stock-in-trade, as well as customer support services such as product repairs and returns, the firm relies on a different of third-party suppliers. Any shortfalls on the part of the suppliers can lead to a negative impact on the company.
  • The company also imports various raw materials required to run its operations from other countries. Any disruption relating to the raw material supply or its costs can disrupt the operations of the company.
  • The company requires a significant sum of working cash to capital for its continued operation and growth. The inability to satisfy working capital requirements might have a negative impact on operating performance and financial position.

IKIO Lighting IPO Review – GMP

The shares of IKIO Lighting traded at a premium of 14.04% in the grey market on June 2nd, 2023. The shares tarded at Rs 325. This gives it a premium of Rs 10 per share over the cap price of Rs 40.

IKIO Lighting IPO Review – Key IPO Information

ParticularsDetails
IPO Size₹607 Cr
Fresh Issue₹350.00 Cr
Offer for Sale (OFS)9,000,000 shares (Approx ₹256.5 Cr)
Opening dateJune 6th, 2023
Closing dateJune 8th, 2023
Face Value₹10 per share
Price BandRs 270 to Rs 285 per share
Lot Size52 Shares
Minimum Lot Size1 (52 Shares)
Maximum Lot Size13 (676 Shares)
Listing DateJune 16th, 2023

Promoters: Hardeep Singh and Surmeet Kaur

Book Running Lead Manager: Motilal Oswal Investment Advisors Limited

Registrar to the Offer: KFin Technologies Limited

The Objective of the Issue

The net proceeds from this issue will be utilized for the following purposes:

  • Repayment/ prepayment of certain borrowings availed by the company and its subsidiaries in full or in part.
  • Investing in its wholly-owned subsidiary, IKIO Solutions Private Limited, in order to set up a new facility in Noida, Uttar Pradesh.
  • General corporate purposes

IKIO Lighting IPO Review – GMP

As of now there is no GMP available, we will update the article once we get an update on it.

In Closing

In this article, we looked at the details of IKIO Lighting IPO Review 2023. Analysts remain divided on the IPO and its potential gains. This is a good opportunity for investors to look into the company and analyze its strengths and weaknesses. That’s it for this post.

Are you applying for the IPO? Let us know in the comments below.

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