Kitchenware and home appliances manufacturer Greenchef Appliances Ltd. has issued a fresh offering of 61,63,200 shares. Priced in the range of Rs. 82 - 87 per share, the company aims to raise Rs. 53.62 crore through its initial public offering (IPO).
The subscription for the IPO will open on June 23 and the bidding process will end on June 27. The company's shares will be listed on NSE Emerge, a dedicated platform for small and medium enterprises.
Based in Bengaluru, the company specializes in manufacturing and marketing kitchen appliances in the brown goods segment of consumer durables.
Greenchef primarily produces LPG gas stoves, pressure cookers, non-stick cookware, and wet grinders in the kitchen utensils category. It has recently expanded into the production of induction cooktops and irons, among other home appliances.
According to its annual report, the company operates three manufacturing units in Karnataka and one in Himachal Pradesh. It sells its products through 107 authorized dealers across 15 states, as well as through e-commerce platforms such as Flipkart India Private Limited, Jiomart, Bigbasket, and Amazon Seller Services Private Limited. Additionally, it reportedly has marketing agreements with Hindustan Petroleum Corporation Limited, Indian Oil Corporation Limited, and Bharat Petroleum Corporation Limited.
In FY22, Greenchef's revenue from operations increased to Rs. 335.78 crore from Rs. 238.99 crore in FY21. However, the EBITDA margin for FY22 declined to 2.17 percent compared to the previous year, and the profit after tax (PAT) also decreased to Rs. 76.54 lakh from Rs. 2.51 crore in FY21.
In the brown goods segment, Greenchef Appliances Ltd. faces competition from domestic kitchenware and appliance majors such as TTK Prestige, Stove Craft, Hawkins, and Butterfly Gandhimathi.
Although a significant portion of Greenchef's revenue in FY22 came from the sale of gas stoves, accounting for 41.63 percent of earnings, the company ranked fifth in the stoves and hobs segment, lagging behind its peers.
The company's consolidated inventory for FY22 increased and was valued at Rs. 67.06 crore, compared to Rs. 42.75 crore and Rs. 36.10 crore in the previous financial years. The prospectus also reveals that the company borrowed a total of Rs. 43.77 crore from banks, resulting in an increased debt-to-equity ratio of 1.29 in FY22, up from 1.02 in FY21.
As mentioned in the prospectus, Greenchef Appliances intends to utilize the proceeds from the IPO to fund capital expenditure for additional plant and machinery, construct a factory building, and meet working capital requirements.
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