Sahasra Electronic Solutions is offering its IPO between September 26 and September 30, 2024, with an issue size of ₹186.16 crore. The IPO provides investors a chance to enter the electronics system design and manufacturing (ESDM) space, a rapidly growing sector. Sahasra’s products include printed circuit board assemblies (PCBAs), LED lighting solutions, and IT hardware.
About Sahasra Electronic Solutions
Sahasra Electronic Solutions, founded in 2023, is a key player in the ESDM industry. The company provides products across three major categories:
- Printed Circuit Board Assemblies (PCBAs): Used across industries such as automotive, medical, IT, and consumer electronics.
- LED Lighting Solutions: Offering LED components like chips, power supplies, and circuit boards.
- IT Hardware: Motherboards, laptops, tablets, and related accessories.
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Strengths and Competitive Advantages
- Certifications: Sahasra holds EN 9100:2018 certification for quality management systems, recognized as equivalent to AS 9100D and JISQ 9100:2016, including ISO 9001:2015.
- Advanced Manufacturing: The company operates four surface mount technology (SMT) lines and uses state-of-the-art equipment like lead-free wave soldering machines and high-speed compact modular mounters.
- Technology Integration: Sahasra has implemented an ERP platform to maintain customer-specified quality standards across its manufacturing facilities.
Risks and Challenges
While Sahasra presents promising growth prospects, there are notable risks:
- Customer Concentration: Sahasra’s top 10 customers contributed 95.78% of revenue in FY24. Any loss of these key customers would severely impact operations.
- PCBA Revenue Dependency: PCBAs accounted for 87.18% of revenue in FY24. A decline in demand or failure to maintain product quality could significantly hurt financial performance.
- Export Risks: A large portion of Sahasra’s revenue comes from exports, with 83.57% of revenue from exports in FY24. Any adverse changes in global market conditions could negatively affect the company’s operations.
- Single Manufacturing Facility: The company relies on a single manufacturing unit. Disruptions at this facility could impact production and finances.
- Legal Proceedings: Sahasra is involved in legal proceedings, and adverse judgments could be detrimental to its business.
- Secured Loans: As of March 31, 2024, Sahasra had secured loans of ₹21.72 crore. Any difficulty in repaying these loans could affect the company’s financial stability.
Financial Overview
Sahasra Electronic Solutions has demonstrated robust growth in both revenue and profit in the last fiscal year.
| Financial Metric | FY23 | FY24 |
|---|---|---|
| Revenue (₹ Cr) | 10.43 | 101.00 |
| Total Assets (₹ Cr) | 48.20 | 108.00 |
| Profit After Tax (₹ Cr) | 2.30 | 32.63 |
Key Performance Indicators (KPI)
| Metric | Value |
|---|---|
| Return on Equity (ROE) | 54.09% |
| Return on Capital Employed (ROCE) | 42.50% |
| Debt/Equity Ratio | 0.36 |
| Profit After Tax Margin | 32.26% |
| Market Capitalization | ₹707.3 Cr |
IPO Application Details
Investors can apply within the price band of ₹269 to ₹283 per share. The minimum investment is for 400 shares, making the minimum investment ₹113,200 for retail investors.
| Application Type | Price Band | Apply Upto |
|---|---|---|
| Regular | ₹269 – ₹283 | ₹2 Lakh |
| High Networth Individual (HNI) | ₹269 – ₹283 | ₹2 – 5 Lakh |
Sahasra Electronic Solutions IPO Lot Size
| Application | Lots | Shares | Amount |
|---|---|---|---|
| Retail (Min) | 1 | 400 | ₹113,200 |
| HNI (Min) | 2 | 800 | ₹226,400 |
IPO Promoter Holdings
Promoters Amrit Lal Manwani, Arunima Manwani, and Varun Manwani currently hold 95% of the company’s shares, which will decrease to 69.90% post-issue.
IPO Objectives
The funds raised from the IPO will be utilized for:
- Capital Expenditure: Installation of additional machinery at the Bhiwadi, Rajasthan manufacturing facility.
- Subsidiary Investment: Financing the capital expenditure requirements of Sahasra Semiconductors Private Limited.
- Working Capital: Meeting the company’s working capital needs.
- General Corporate Purposes: Covering IPO-related expenses and other corporate purposes.
IPO Details
| IPO Date | September 26, 2024 – September 30, 2024 |
|---|---|
| Face Value | ₹10 per share |
| Price Band | ₹269 to ₹283 per share |
| Lot Size | 400 Shares |
| Total Issue Size | 6,578,000 shares (₹186.16 Cr) |
| Fresh Issue | 6,078,000 shares (₹172.01 Cr) |
| Offer for Sale | 500,000 shares (₹14.15 Cr) |
| Listing At | NSE SME |
IPO Reservation
| Investor Category | Shares Offered |
|---|---|
| Anchor Investors | 329,000 |
| QIB | 1,972,000 |
| NII (HNI) | 1,479,000 |
| Retail Investors | 3,296,000 |
Analyst Review
According to Dilip Davda, Sahasra Electronic Solutions has experienced significant growth in both revenue and profit margins in FY24, sparking concerns over the sustainability of these figures. The issue appears fully priced based on FY24 earnings. While the company operates in a competitive industry, well-informed investors may consider parking moderate funds for medium-term gains, especially given the company’s promising growth potential in the ESDM sector.
Conclusion
Sahasra Electronic Solutions is an exciting prospect in the electronics design and manufacturing sector, with strong financial performance in FY24. The company’s focus on advanced technologies and international markets could provide long-term growth opportunities. However, potential investors should be mindful of the risks associated with customer concentration, revenue dependency on PCBAs, and global export markets.
For more information, you can reach the IPO registrar:
Bigshare Services Pvt Ltd
Phone: +91-22-6263 8200
Email: ipo@bigshareonline.com
Website: Bigshare IPO Status
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