On Door Concepts IPO opens October 23, issue price fixed at Rs 208

The initial public offering (IPO) for omnichannel retailer On Door Concepts will open for subscription on October 23, with an issue price of Rs 208 per share.

On October 27th, the IPO will conclude with a completely new issue of 14,98,800 equity shares. After raising Rs 7.39 crore through pre-IPO sale of 2,85,200 shares at Rs 259 each, the offering size was lowered.

The decrease from the pre-IPO price to the issue price is roughly 20%. If successful, this would be October’s seventh initial public offering from a small or medium-sized business.

Lot Size

The grocery and home goods retailer in Madhya Pradesh has set aside 86,400 shares for the market maker, leaving 14,12,400 for the net issue, with retail investors and high net worth persons each receiving 7,06,200 shares.

Investors can place bids starting at 600 shares and increasing in multiples of 600 shares. Since retail investors can only bid on one lot of 600 shares (since their investment limit is at Rs 2 lakh), the application size for them would be Rs 1,24,800.

Objectives of IPO

Working capital requirements will be funded with Rs 20.43 crore of the net issue proceeds by On Door Concepts. The remaining Rs 7.24 crore will be used for general corporate purposes.

“Considering the existing and future growth, the total net working capital needs of our company, as assessed based on the internal workings is expected to reach Rs 22.01 crore for FY24,” the corporation stated in its prospectus.

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About the company

Ondoor is a regional omni-channel retailer specializing in domestic necessities and groceries. Since its inaugural establishment in January 2015 in Bhopal, the company has grown to hold 55 percent of its stores in Madhya Pradesh as of March 2023.

One-seven stores are owned and operated by the corporation, with the remaining locations being managed via the franchisee model.

Financials

The company finally earned a profit in FY23, when it reported a profit of Rs 0.06 crore (before unusual item), compared to a deficit of Rs 5.4 crore the year before. The company’s operational revenue grew from Rs 173.1 crore to Rs 180.1 crore over the same time period.

Over the years, EBITDA has increased, from Rs 1.39 crore in FY22 to Rs 4.03 crore in FY23 (a year-over-year increase of 189.5 percent).

Profit for the five months ending in August 2023 was Rs 0.56 crore on revenue of Rs 70.26 crore and EBITDA of Rs 2.23 crore.

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Listing date and grey market premium

By November 1st, Ondoor will have finalized the basis for allocating IPO shares, and by November 3rd, successful investors will have seen those shares credited to their demat accounts.

The stock’s debut on the NSE Emerge is set on November 6.

Analysts, speaking anonymously, suggested the share could be purchased on the gray market for a premium of 12% over the offer price. Before an initial public offering (IPO) is officially listed for sale, investors may trade in the shares on the grey market.

The issue’s merchant banker is First Overseas Capital, while the offer’s registrar is Bigshare Services.