{"id":856,"date":"2021-08-02T09:53:43","date_gmt":"2021-08-02T09:53:43","guid":{"rendered":"https:\/\/www.invest19.com\/blog\/?p=856"},"modified":"2021-08-02T09:53:44","modified_gmt":"2021-08-02T09:53:44","slug":"exxaro-tiles-ipo-will-hit-the-primary-market-on-aug-04-should-you-subscribe","status":"publish","type":"post","link":"https:\/\/www.invest19.com\/blog\/exxaro-tiles-ipo-will-hit-the-primary-market-on-aug-04-should-you-subscribe\/","title":{"rendered":"Exxaro Tiles IPO will hit the primary market on Aug 04. Should you subscribe?"},"content":{"rendered":"<div style=\"margin-top: 0px; margin-bottom: 0px;\" class=\"sharethis-inline-share-buttons\" ><\/div>\n<p>The management of Exxaro Tiles has\nchosen August 04 to open its IPO for subscription. Alongwith Exxaro Tiles;\nDevyani Int., Windlas Biotech and Krsnaa Diagnostics are going to open on same\nday. The month of August has started with a lot of IPOs and firms are going to\ngarner Rs. 3,614 cr. from the market. The issue size is a mix of fresh issue\nand offer for sale. Exxaro Tiles is the leading manufacturer of vitrified tiles\nin different sizes. The company has PAN India presence in 27 states of India.\nThe firm has 6 display centers in 6 cities and 2 marketing offices in Delhi and\nMorbi.<\/p>\n\n\n\n<p><strong>Exxaro Tiles Ltd. IPO Details<\/strong><\/p>\n\n\n\n<ul class=\"wp-block-list\"><li>Issuer Company: Exxaro Tiles.<\/li><li>Industry: &nbsp;Ceramics<\/li><li>IPO Size: 161.09 cr.<\/li><li>Price Band: 118-120<\/li><li>Issue Open Date: 04 Aug, 2021<\/li><li>Issue Close Date: 06 Aug, 2021<\/li><li>Listing Date: 17 Aug, 21<\/li><li>Minimum Lot Size: 125 shares<\/li><li>Face Value: 10 Rs. Per share<\/li><li>Employee Discount:&nbsp; NA<\/li><li>Retail Allocation: 35%<\/li><li>Listing Exchange: NSE, BSE<\/li><\/ul>\n\n\n\n<p><strong>Composition\nof Issue Size<\/strong><\/p>\n\n\n\n<p>The issue size of Rs. 161.09 cr. is a\nmix of fresh issue of Rs. 134.23 cr. and offer for sale of Rs. 26.86 cr. at the\nupper price band.<\/p>\n\n\n\n<p>Offer for Sale: The object of the Offer for Sale is to allow Mr. Dixit Kumar Patel to sell an aggregate of up to 2.23 million equity Shares held by them amounting at Rs. 26.86 cr. The company will not receive any proceeds from the Offer for Sale. <\/p>\n\n\n\n<p>Must Read: <a href=\"https:\/\/www.invest19.com\/blog\/windlas-biotech-ipo-will-hit-the-primary-market-on-aug-04-should-you-subscribe\/\">Windlas Biotech IPO will hit the primary market on Aug 04. Should you subscribe?<\/a><\/p>\n\n\n\n<p>Fresh Issue: The company has\nplanned to raise fresh capital comprising an aggregate of 1,11,86,000 equity\nshares having Face Value \u20b910 aggregating up to Rs. 134.23 Cr at the upper price\nband of Rs. 120. Out of the net proceeds<\/p>\n\n\n\n<ul class=\"wp-block-list\"><li>An amount of Rs. 50 cr. will be utilized for\nrepayment\/prepayment of certain borrowings.<\/li><li>An amount of Rs. 45 cr. will be utilized for\nfunding working capital requirements.<\/li><li>Rest will be utilized for general corporate\npurpose.<\/li><\/ul>\n\n\n\n<p><strong>About the\nCompany<\/strong><\/p>\n\n\n\n<p>Exxaro Tiles is engaged in manufacturing and marketing of\nvitrified tiles used majorly for flooring solutions. The company has commenced\nits operations in 2008 as a manufacturer of fit which is one of the raw\nmaterials used in manufacturing of titles. Later on, it diversified and\nexpanded its operations in the manufacturing of vitrified tiles. Their business\noperations are divided into two product categories. 1) Double Charged Vitrified\nTiles: These tiles are fed through a press which prints the pattern with a\ndouble layer of pigment, 3-4 mm thicker than other type of tiles. This process\ndoes not permit complex patterns but results in a long wearing tile surface,\nsuitable for heavy traffic commercial projects. 2) Glazed Vitrified Tiles:\nThese are flat slabs manufactured from ceramic materials such as clay, feldspar\nand quartz and other additives and fired at high temperatures to ensure high\nstrength and low water absorption. These tiles are coated with glaze materials\nprior to the firing process.<\/p>\n\n\n\n<p>The product basket of the company has 1000+ designs which are\nmarketed under the brand \u2018Exxaro\u2019. The brand series of the company include:\nTopaz Series, Galaxy Series and High Gloss Series. The company has PAN India\npresence and supply in over 12 countries.<\/p>\n\n\n\n<p>&nbsp;<strong>Industry Growth Drivers<\/strong><\/p>\n\n\n\n<ul class=\"wp-block-list\"><li>Rising disposable income from Indian households\npossess enough opportunities for the ceramic industry to grow.<strong><\/strong><\/li><li>Government schemes on housing and infrastructure\nwill boost the demand of ceramics in the upcoming years.<strong><\/strong><\/li><li>Indian government is on the road of revival and\nceramics industry is expected to grow further.<strong><\/strong><\/li><li>Indian ceramics industry expected to grow at a\nhealthy rate of around 12%-14% in next two years.<strong><\/strong><\/li><li>Exports from India has doubled in last three\nyears and expected to deliver similar growth further.<strong><\/strong><\/li><li>Real estate slowdown is over and NBFCs are\nflooded with funds. This may boost the sales of tiles industry.<strong><\/strong><\/li><li>Government had imposed anti-dumping duty on\nChina to restrict imports of cheap tiles from China for five years in July\n2017.<strong><\/strong><\/li><li>Falling interest rates, stamp duty charges and\nfiscal stimulus from government will push the realty sector which may further\nadvance the demand of tiles industry.<strong><\/strong><\/li><\/ul>\n\n\n\n<p><strong>Peers\nComparison<\/strong><\/p>\n\n\n\n<p>The company has a wide list of listed peer s such as Kajaria\nCeramics, Asian Granito, Somany Ceramics, Orient Bell and Murudeshwar Ceramics.\nAmong the listed peers, Kajaria Ceramics has highest Return on Net Worth at\n11.88%. Orient Bell has the highest P\/E ratio at 61.2x.<\/p>\n\n\n\n<p><strong>Financials<\/strong><\/p>\n\n\n\n<p><strong>Sale of Products\ngeographically (Rs. in millions)<\/strong><\/p>\n\n\n\n<figure class=\"wp-block-image size-large\"><img loading=\"lazy\" decoding=\"async\" width=\"464\" height=\"303\" src=\"https:\/\/www.invest19.com\/blog\/wp-content\/uploads\/2021\/08\/Screenshot-185.png\" alt=\"\" class=\"wp-image-858\" srcset=\"https:\/\/www.invest19.com\/blog\/wp-content\/uploads\/2021\/08\/Screenshot-185.png 464w, https:\/\/www.invest19.com\/blog\/wp-content\/uploads\/2021\/08\/Screenshot-185-300x196.png 300w\" sizes=\"auto, (max-width: 464px) 100vw, 464px\" \/><\/figure>\n\n\n\n<p><strong>Observations<\/strong><\/p>\n\n\n\n<ul class=\"wp-block-list\"><li>Revenues of the company have risen marginally by\n3.19% in last two years.<\/li><li>As on FY21, company is generating 86% of their\nrevenues from selling products domestically.<\/li><li>Revenues from domestic sales have grown 6% in\nFY21.<\/li><li>While, revenues from exports have increased by\n8.7% in last two years.<\/li><\/ul>\n\n\n\n<p><strong>Financial Statements<\/strong><\/p>\n\n\n\n<figure class=\"wp-block-table\"><table class=\"\"><tbody><tr><td>\n  Income Statement (In Millions)\n  <\/td><td>   \u00a0   FY21<\/td><td>   FY20  <\/td><td>   FY19   <\/td><\/tr><tr><td>\n  Gross Operating Income\n  <\/td><td>\n  2598.53\n  <\/td><td>    2439.64   <\/td><td>\n  2440.06\n  <\/td><\/tr><tr><td>\n  Cost of Employee &amp; Inventory\n  <\/td><td>\n  1036.63\n  <\/td><td>       978.28   <\/td><td>\n  1241.98\n  <\/td><\/tr><tr><td>\n  Other Expenses\n  <\/td><td>  1041.36   <\/td><td>\n  999.53\n  <\/td><td>\n  802.24\n  <\/td><\/tr><tr><td>\n  EBITDA\n  <\/td><td>\n  520.54\n  <\/td><td>\n  461.83\n  <\/td><td>\n  395.84\n  <\/td><\/tr><tr><td>\n  Depreciation\n  <\/td><td>\n  136.34\n  <\/td><td>\n  142.97\n  <\/td><td>\n  140.81\n  <\/td><\/tr><tr><td>\n  Interest \n  <\/td><td>\n  212.6\n  <\/td><td>\n  197.18\n  <\/td><td>\n  178.28\n  <\/td><\/tr><tr><td>\n  Profit Before Tax\n  <\/td><td>\n  171.6\n  <\/td><td>\n  121.68\n  <\/td><td>\n  76.75\n  <\/td><\/tr><tr><td>\n  &nbsp;Tax\n  <\/td><td>\n  19.37\n  <\/td><td>\n  9.09\n  <\/td><td>\n  -12.42\n  <\/td><\/tr><tr><td>\n  Profit After Tax\n  <\/td><td>   \u00a0152.23<\/td><td>   112.59  <\/td><td>   89.17   <\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<ul class=\"wp-block-list\"><li>Company\u2019s revenue is marginally increased by 3.19% in last two years.<\/li><li>EBITDA margins of the company stood at 20.03% in FY21 increased from 19% in FY20. <\/li><li>Company has very less cash flows at Rs. 2.18 cr. however; the net proceeds of Rs. 45 cr. from fresh issue to augment working capital requirements will help in operating functions smoothly.<\/li><li>The firm has reduced their long-term borrowings by Rs. 14 cr. last year and proceeds from fresh issue for payment of borrowing will reduce cost of debt that will increase PAT margins further.<\/li><li>PAT grew by 35% in FY21.<\/li><li>Debt\/Equity ratio of the company is 0.5x.<\/li><li>Return on Equity or Net Worth is 11.88% while Kajaria Ceramics claims highest RONW at 16.48% among listed peers.<\/li><li>Considering the upper price band at Rs. 120 and FY21 Earning Per Share (EPS) of Rs. 4.54, the company is demanding a P\/E multiple of 28.30x, much lower than the Industry P\/E of 48.75x.<\/li><\/ul>\n\n\n\n<p>Also Read: <a href=\"https:\/\/www.invest19.com\/blog\/tatva-chintan-ipo-has-doubled-the-investors-wealth-what-investors-should-do-now\/\">Tatva Chintan IPO has doubled the investor\u2019s wealth. What investors should do now?<\/a><\/p>\n<div class='epvc-post-count'><span class='epvc-eye'><\/span>  <span class=\"epvc-count\"> 4,319<\/span><\/div><div class=\"pld-like-dislike-wrap pld-template-1\">\n    <div class=\"pld-like-wrap  pld-common-wrap\">\n    <a href=\"javascript:void(0);\" class=\"pld-like-trigger pld-like-dislike-trigger \" title=\"\" data-post-id=\"856\" data-trigger-type=\"like\" data-restriction=\"ip\" data-ip-check=\"0\" data-user-check=\"1\">\n                        <i class=\"fas fa-thumbs-up\"><\/i>\n                    <\/a>\n    <span class=\"pld-like-count-wrap pld-count-wrap\">4    <\/span>\n<\/div><\/div>\n\n","protected":false},"excerpt":{"rendered":"<p>The management of Exxaro Tiles has chosen August 04 to open its IPO for subscription. Alongwith Exxaro Tiles; Devyani Int., Windlas Biotech and Krsnaa Diagnostics [&hellip;] <span class=\"read-more-link\"><a class=\"read-more\" href=\"https:\/\/www.invest19.com\/blog\/exxaro-tiles-ipo-will-hit-the-primary-market-on-aug-04-should-you-subscribe\/\">Read More<\/a><\/span><\/p>\n","protected":false},"author":1,"featured_media":859,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[70,2,7],"tags":[],"class_list":["post-856","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-ipo","category-stock-market","category-investment"],"_links":{"self":[{"href":"https:\/\/www.invest19.com\/blog\/wp-json\/wp\/v2\/posts\/856","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.invest19.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.invest19.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.invest19.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.invest19.com\/blog\/wp-json\/wp\/v2\/comments?post=856"}],"version-history":[{"count":1,"href":"https:\/\/www.invest19.com\/blog\/wp-json\/wp\/v2\/posts\/856\/revisions"}],"predecessor-version":[{"id":860,"href":"https:\/\/www.invest19.com\/blog\/wp-json\/wp\/v2\/posts\/856\/revisions\/860"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.invest19.com\/blog\/wp-json\/wp\/v2\/media\/859"}],"wp:attachment":[{"href":"https:\/\/www.invest19.com\/blog\/wp-json\/wp\/v2\/media?parent=856"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.invest19.com\/blog\/wp-json\/wp\/v2\/categories?post=856"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.invest19.com\/blog\/wp-json\/wp\/v2\/tags?post=856"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}