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EXXARO TILES IPO

  • Writer: The Shareholder
    The Shareholder
  • Aug 3, 2021
  • 2 min read



IPO Details:




Price Band: 118-120

Cutoff Price: 120


About Company:


Exxaro is engaged in manufacturing and marketing of vitrified tiles used majorly for flooring solutions. Company had commenced business as a partnership firm in 2007-08 as a manufacturer of frit, which is one of the raw materials used in manufacturing of tiles and has over the years, diversified, expanded and evolved into a manufacturer for vitrified tiles. Company mainly deals in two product categories, i.e. Double Charged Vitrified Tiles and Glazed Vitrified Tiles. As on date, company supply products mainly in 6 sizes. They have 1000+ designs in our product basket, which are marketed under our brand “Exxaro”.


Competitive Strengths:

  1. State-of-the-art manufacturing facilities with a strong focus on design and quality;

  2. Widespread sales and dealers network;

  3. Wide product portfolio comprising 1000+ designs;

  4. Experienced management and dedicated employee base.


Strategies:

  1. Strengthen our brand value;

  2. Expand dealer network in existing markets and increase our export presence;

  3. Increase our sales by enhancing manufacturing capacities and procuring materials on outsourced basis;

  4. Continue to improve operating efficiencies through technology enhancements and setting up own gas station.


Financial Performance:








Company's Revenue has increased for last fiscal year. Net Profit and EPS are increasing year on year. With EPS of 4.54, the company's P/E is 26.4.


Objects of the Issue:


The Net Proceeds from the Issue are proposed to be utilised in the following manner:

  1. Funding Working Capital Requirement

  2. Prepayment/repayment of borrowings

  3. Offer for Sale

Competitors Comparison:

Exxaro Tiles IPO seems to be undervalued based on the P/E ratio and Price to book value.


Grey Market Premium:


Our view: GMP of the IPO is less and also the price is undervalued after comparing it with listed competitors. We can expect this IPO to list at premium or flat and hence I would be applying for this IPO only for one lot.


Disclaimer: Views are shared for an educational purpose. Please consult your financial advisor or planner before taking any action based on the views or facts shared on this blog.


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