S J S Enterprises Limited IPO. Is it Worth Subscribing?

Business Introduction:

SJS is a market leader in India’s decorative aesthetics industry. The company is a provider of ‘design-to-delivery’ aesthetics solutions for the automobile and consumer appliance industries.

The company’s product line includes decals and body graphics, 2D appliques and dials, 3D appliques and dials, 3D lux badges, domes, overlays, aluminum badges, in-mold labels, and decoration components, lens mask assembly, and chrome-plated printed and painted injection-molded plastic parts.

Exotech, the company’s subsidiary, meets the demand for chrome-plated, printed, and painted injection-molded plastic parts in the two-wheeler, passenger car, consumer durables/appliances, farm equipment, and sanitary ware industries.

The company operates manufacturing facilities in Bengaluru and Pune, with an annual production capacity of 208.61 million and 29.50 million products, respectively, as of March 31, 2021. The company and its subsidiary manufactured 91.94 million and 15.60 million goods, respectively, in the fiscal year 2021. The company operates on a global scale, having provided over 115 million parts to around 170 customers in 20 countries in the fiscal year 2021.

About founders:

  1. Evergraph holds 77.8%
  2. K.A. Joseph holds 20.7%

S J S Enterprises Limited IPO Details:

Sl. NoParticularsInformation
1IPO Issue opens onNovember 1, 2021
2IPO Issue closes onNovember 3, 2021
3Issue TypeFixed Price Issue IPO
4Face ValueRs. 10 per equity share
5IPO PriceRs. 531 - 542 per equity share
6Minimum Order Quantity1 lot = 27 Shares, Amounting Rs. 14,634
7Maximum Order Quantity13 lot = 351 Shares, Amounting Rs. 1,90,242
8Listing AtNSE and BSE
9Issue SizeAmount aggregating up to Rs. 800 crore
10Fresh Issue-
11Offer for SaleAmount aggregating up to Rs. 800 crore
12Allotment dateNovember 10, 2021
13Initiation of RefundsNovember 11, 2021
14Credit of share to Demat AccountNovember 12, 2021
15IPO Listing dateNovember 15, 2021

Financial Information:

Particulars (In crores)Jun-21FY21FY20FY19
Total Assets416.23383.54332.25304.04
Revenue from operations75.29251.6216.1237.2
Net profit9.9647.741.237.6

Company Opportunity & Strength:

  • One of the top suppliers of ornamental aesthetics, offering a diverse selection of items.
  • supplied with a well-developed supply chain and delivery mechanism.
  • capable of creativity, design, and development of products.
  • a demonstrated track record of financial success
  • Customer relationships that are well developed
  • Increase the emphasis on premium items by leveraging market leadership.
  • Enhance capabilities for product style, customization, design, and development.
  • Construct, innovate, and create new products.
  • intend to concentrate on increasing penetration in Asia’s two-wheeler automotive segment.
  • Take measures toward integrating the operations of subsidiary companies.
  • Expansion of the business via strategic inorganic growth prospects
  • Expanding geographical reach and exports

Company Threats & Weakness:

  • Any competition-related loss of significant clients and contracts would be a disaster.
  • Fluctuations in the automotive and consumer appliance industries’ performance

Management Analysis:

Management includes Mr. Ramesh Chandra Jain (Chairman and Independent Director. He previously worked with Eicher for 25 years, retiring as group vice-chairman. Prior to joining Eicher, he worked at Hindustan Aeronautics Limited.

K.A. Joseph is the Managing Director of the Company. 

Risk Factors:

  • Inability to obtain raw materials at reasonable costs.
  • High reliance on the automotive sector, which accounts for 70% of revenues.
  • Inability to handle inventory accurately
  • Counterparties may make payments late or fail to execute contractual obligations.

Industry Overview:

Automobile and consumer durables manufacturers work diligently to deliver value-for-money items to the market in order to maintain and expand their market shares. While product features and price are crucial, product aesthetics play a critical role in helping original equipment manufacturers (“OEMs”) build brand value. Consumers seek products that are not just economical but also visually appealing. For discretionary consumption products such as vehicles and consumer durables, aesthetic superiority is critical.

In consumer discretionary items, decorative aesthetic components include logos, stickers, decals, appliques, overlays, chrome-plated parts, IML/IMD, and IME. Several components, such as appliques, overlays, and optical polymers, are also used for their practical properties in addition to their aesthetic value-adding properties.

The aesthetics market as a whole is quite extensive, and aesthetic items are used in a wide variety of industries, as shown below. Only the aesthetics opportunity has been examined across the 2W, photovoltaic, and major consumer durables industries. Thus, total demand for aesthetics will exceed the opportunity assessed by CRISIL Research, owing to aesthetics applications that extend well beyond 2W, photovoltaic, and major consumer durables.

Conclusion:

Company designers conceptualize and co-develop innovative concepts for customers in its Bengaluru facility’s design studio, which is equipped with the latest technology. SJS has in-house design, development, and engineering capabilities, which will foster innovation and increase manufacturing process efficiency.

The company’s product portfolio is varied and aims to create a variety of aesthetic goods for two-wheelers, passenger vehicles, commercial vehicles, consumer durables and appliances, medical devices, farm equipment, and sanitary ware. SJS offers decals and body graphics, 2D appliques and dials, 3D appliques and dials, 3D lux badges, domes, overlays, aluminum badges, in-mold label or decoration, lens mask assembly, and chrome-plated, printed, and painted injection-molded plastic parts.

IPO Ratings:

Sl. NoParticularsRating (Out of 10)
1Business Prospects8
2Financial Information9
3Company Performance9
4SWOT8
5Overall8.5

How to apply for – IPO?

Steps to be followed to apply for β€œS J S Enterprises Limited” via Zerodha console:

Step 1: Visit the Zerodha website and log in to Console.

Step 2: Go to Portfolio and click the IPOs link.

Step 3: Go to the β€œS J S Enterprises Limited” row and click the β€˜Bid’ button.

Step 4: Enter your UPI ID, Quantity (In lots), and Price.

Step 5: β€˜Submit’ IPO application form.

Step 6: Visit the UPI App (net banking or BHIM) to approve the mandate.

Do not have a brokerage account? Apply for Zerodha – India’s top brokerage service.

Disclaimer: All the information on this website is published in good faith and for general information purpose only.

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