Newjaisa Technologies IPO Review: Newjaisa technologies limited is coming up with its Initial Public Offering. This is an SME (small and medium size enterprise) which is going to be listed on NSE SME. The IPO will open for subscription 25th September 2023, and closes on 27th September 2023.
In this Newjaisa Technologies IPO Review, we will provide an in-depth analysis of the company, including its financials, strengths, and weaknesses. Keep reading for more comprehensive details!
Newjaisa Technologies IPO Review – About The Company
NewJaisa, a technology-driven company, was established in 2020. Specializing in the direct-to-consumer sale of refurbished IT electronics, NewJaisa offers high-quality products at a significant discount compared to new items.
The business model involves an end-to-end reverse supply chain for IT assets, which includes procuring used IT assets such as laptops, desktops, and peripherals, refurbishing them to near-new condition, and selling them directly to end-users – businesses or retail customers.
The primary revenue model revolves around the direct sales of IT products such as laptops, Chromebooks, desktops, Chromeboxes, monitors, and accessories like keyboards, mice, Wi-Fi devices, and speakers.
NewJaisa is primarily focused on the Indian market with a diverse customer base that includes students, home users, small and medium enterprises (SMEs), and working professionals. More than 90% of sales come from e-commerce and online platforms.
NewJaisa has served customers across more than 19,298 pin codes in India from a centralized team and plant located in Bangalore. In terms of product wise sales, laptops and Chromebooks contribute 51.8%, desktops, Chromeboxes, and monitors account for 44.8%, while accessories generate 3.3% of the total sales.
Newjaisa Technologies IPO Review – Industry Overview
The global Information and Communication Technology (ICT) sector is experiencing significant growth, driven by the increasing adoption of advanced products and solutions, as well as the expansion of digital infrastructure.
This growth is further fueled by a high global internet penetration rate and a burgeoning gaming community, which has opened up opportunities for the refurbished computers and laptops market.
In 2023, the refurbished laptops segment is projected to dominate the global market, contributing a substantial 74.2% share. This segment alone is expected to generate opportunities worth US$ 23,782.7 million during the forecast period.
Focusing on India, the refurbished computers and laptops market is anticipated to reach US$1,153.1 million in 2023, with projections indicating a rise to US$ 2,943.8 million by 2033. This represents an estimated Compound Annual Growth Rate (CAGR) of 9.8%.
Among the various products, the refurbished laptops segment is predicted to hold a dominant position in the Indian market with a revenue share of 71.8% in 2023. Additionally, the Windows OS segment is expected to experience the highest growth rate with a CAGR of 10.4%.
The refurbished IT devices market has seen considerable expansion as consumers and businesses seek cost-effective alternatives to new devices. The acceptance and trust in refurbished devices among consumers have been growing.
As vendors enhance their refurbishment processes, improve quality assurance, and offer warranty coverage, buyers are gaining confidence in the reliability and performance of refurbished computers and laptops.
Newjaisa Technologies IPO Review – Financials
The company’s assets have surged from 3.37Cr in March 2021 to 22Cr in March 2023, and revenue has jumped from 9.6Cr in March 2021 to 44.5Cr in March 2023.
The net worth has also grown significantly from 74.3 Lakh in March 2021 to 9.3Cr in 2023, and the Profit After Tax (PAT) has improved from 73.3 Lakh in March 2021 to 6.7Cr in March 2023.
However, the company’s borrowing has also increased from 1.62Cr in March 2021 to 7.4Cr in March 2023. Despite this, the company’s Return on Equity (ROE) and Return on Capital Employed (ROCE) stand at a strong 72.63%.
(Source: RHP of the company)
Competitors of the Company
Newjaisa Technologies is in a competitive market, facing challenges from industry peers like Cerebra and established players such as Apple, Lenovo, HP, and Microsoft. These companies, with their expertise and dedicated sections for authorized refurbished products on their websites, pose a significant threat to Newjaisa Company.
Strengths of the Company
- Newjaisa Technologies is a tech-driven D2C IT electronics brand that provides quality bespoke refurbished electronics at a significant discount compared to new products. This unique business model allows Newjaisa to offer customers high-quality products at a lower price, while also reducing environmental waste.
- The company offers a wide range of refurbished IT electronics products, including laptops, desktops, monitors, and accessories from the Brands like Dell, Mac book, Asus,Lenovo, Acer, and HP. It also offers a variety of services, such as data recovery, repair, and warranty support.
- The company has a unique business model that directly acquires IT equipment from corporate clients and recyclers. This equipment undergoes a rigorous refurbishment process to ensure quality and reliability. The refurbished products are then made available to consumers through various online e-commerce platforms, their own website, and direct inquiries. This streamlined process significantly reduces procurement costs, enabling New Jaisa to offer competitively priced, high-quality refurbished products.
- Newjaisa’s strength lies in its robust online presence, facilitated by a diverse range of marketing strategies. The company’s significant presence on e-commerce platforms enables it to distribute its products and services across all states in India, thereby reaching a broad customer base. The company’s marketing strategies include online marketing, paid and organic marketing on various e-commerce and social media platforms like Google and Facebook, as well as their own website.
Weaknesses of the Company
- The company’s supply chain is concentrated, with the top 10 suppliers contributing 85% of total revenue as it doesn’t have long-term agreements with its suppliers, and this could lead to problems if the suppliers are unable to provide the desired quality, quantity, or timeliness of IT supplies.
- The company has difficulty managing its inventory. The prices of used computers, laptops, and other related products can fluctuate due to demand and supply factors. This can affect the profitability of the business.
- The company provides guarantees and warranties on its products. A significant increase in returns and activation of warranty provisions by customers could impact the business. This includes the cost of delivery, freight, and risk of fraud returns. In some cases, the returned inventory is not suitable for resale, which further impacts the company’s overall margins.
- The company requires a significant amount of working capital to fund the cost of procurement of used IT inventory in advance. The inventory is then passed through the refurbishment process including internal test and controls before it is ready for sales and dispatch. The company has not made any alternate arrangements for meeting capital requirements, and this could adversely affect its results of operations.
Newjaisa Technologies IPO Review – GMP
Currently GMP is not available, we shall update the article once we receive the information.
Newjaisa Technologies IPO Review – Key IPO Information
|Opening Date||25th september 2023|
|Closing Date||27th septemebr 2023|
|Face Value||₹5 per share|
|Price Band||₹44 to ₹47 per share|
|Lot Size||3000 shares|
|Minimum Lots||1 (3000 shares)|
|Maximum Lots||1 (3000 shares)|
|Listing Date||9th October 2023|
Promoters: Mr. Vishesh Handa and Mr. Mukunda Raghavendra are the company’s promoters.
Book Running Lead Manager: Indorient financial services limited
Registrar to the Offer: Bigshare services private limited
The Objective of the Issue: The company intends to utilize the net proceeds from the issue towards the funding of the following objects:
- Expansion of refurbishment facility and purchase of plant, machinery, and equipment.
- Investment in technology development, Branding and marketing, and Funding Working Capital requirement.
- Repayment of Bank facilities and General Corporate purposes.
Newjaisa Technologies commitment to reducing e-waste and extending the life of IT assets is a key focus, by offering high-quality refurbished electronics at affordable prices.
This approach not only addresses the growing e-waste problem but also caters to the vast demographic in India with low personal computing ownership. With the anticipated rise in demand for refurbished products, the commitment to quality and affordability positions NewJaisa Technologies favorably to capitalize on this trend.
However it is an SME IPO where the minimum investment amount is 1,41,000 Which is higher than mainline IPO.
What do think about the company? Are you applying for the IPO? Let us know in the comments below.
Written by Niharika Jadhav
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