Brief Summary
Okay ji, here's a quick rundown of the IPO reviews from Sunday Investing. They've looked at Ganesh Consumer, Atlanta Electricals, Seshaasai Technologies, and Justo Realfintech. Key takeaways include:
- Ganesh Consumer: Regional FMCG player, apply for listing gains.
- Atlanta Electricals: Transformer manufacturer, apply and hold long-term.
- Seshaasai Technologies: Payment solutions, interesting niche sector, apply.
- Justo Realfintech: Real estate mandate company, apply at IPO price.
Opening Remarks
The host welcomes everyone to the primary market chatter by Sunday Investing, focusing on the IPOs for the week of September 4th. They acknowledge being on the road and slightly underprepared, urging viewers to conduct their own research. They clarify that the discussion isn't qualified advice and remind viewers to do their due diligence. The agenda includes reviewing Ganesh Consumer, Seshaasai Technologies, Atlanta Electricals, and Justo Realfintech IPOs.
Ganesh Consumer (Mainboard)
Ganesh Consumer, incorporated in 2000, offers a range of consumer staples like wheat flour, maida, suji, and packaged snacks, primarily in the retail FMCG segment. It's a Kolkata-based company with a strong presence in eastern India. The IPO is ₹409 crores, with ₹130 crores fresh issue and ₹270 crores OFS. The market cap is ₹1300 crores, implying a 30% dilution. FY25 financials show a top line of ₹855 crores and a bottom line of ₹35 crores, resulting in a PE of around 38. The lead managers are DAM Capital and Motilal Oswal.
Sachin adds that Ganesh Consumer has a 90-year legacy and dominates eastern India in staples. They are the third largest ata brand in the organized space and number one in maida, suji, and dalia in West Bengal with a 41% market share. They have around 42 products with 250 SKUs. 77% of revenue comes from staples, with the rest from value-added flours and spices. 77-78% of revenue is from B2C customers, ensuring direct cash generation. They have 28-30 carry and forwarding agents and 1000+ distributors. They operate seven automated plants with a capacity of 1300 metric tons per day, all ISO certified.
In FY23, revenues were ₹614 crores with a 9% EBITDA margin, growing to ₹855 crores in FY25 with similar margins and a 5% PAT margin. A 16-17% growth is expected in FY26. Positives include being in the FMCG sector and dominating the East India region. Post-IPO, they plan to consolidate plants and expand geographically. The cash conversion cycle is also a benefit. Risks include the lack of pan-India presence and intense competition.
The OFS includes promoters selling shares and One India Business Excellence Fund exiting. Promoters will repay ₹40 crores of loans from the OFS proceeds. From the fresh proceeds, ₹60 crores will be used to repay loans, reducing interest burden, and ₹45 crores will be used to set up a gram flour plant in Diling. The IPO is priced at 33-34 times trailing earnings and 27-28 times forward earnings. Peer comparison includes Patanjali (49-50x), Adani Wilmar (27-28x), and ITC Foods (35-40x). The anchor list includes ভালো names like Shopcom Ventures and Bengal Finance. Sachin concludes that they will be applying for the IPO.
The host asks about Ganesh's famous products, which are ata and different varieties of satu. Ata and suji contribute around 40% of their sales. The host says he will apply for listing gains if the IPO isn't heavily subscribed.
Atlanta Electricals (Mainboard)
Atlanta Electricals, incorporated in 1988, manufactures power, auto, and inverter duty transformers. As of March 31, 2025, their portfolio includes six products. The IPO is ₹687 crores, with ₹400 crores fresh issue and ₹300 crores OFS. The market cap is ₹5800 crores, indicating around 15% dilution. FY25 financials show revenue of ₹1250 crores and PAT of ₹118 crores. The lead managers are Oswal, Motilal Oswal, and Axis Capital.
Sachin explains that Atlanta Electricals is a Gujarat-based manufacturer of electrical transformers with over three decades of history. They offer a broad portfolio, including power transformers up to 220 KV, auto transformers, inverter duty transformers, and furnace transformers. They cover transformation, generation, transmission, and industrial uses. After a recent acquisition, they can manufacture larger rating units up to 500 MVA and 765 KV. They have five facilities, with four fully functional in Gujarat and Bengaluru. The fifth facility is being commissioned in Gujarat. These plants have a production capacity of 6360 MVA per annum.
They have a diversified customer base of 200+ clients, including GETCO and renewable energy developers, supplying transformers to 19 states and three UTs. 21 customers are public sector entities and 187 are private sector entities. There are very few players in their segment. Key peers include CG Power, Hitachi, and Voltamp Transformers. Voltamp trades at extreme valuations of 70x, while Transformer and Rectifiers trades at 25-30x.
The IPO is priced high, almost 50-55 times FY25 earnings. From the fresh issue of ₹400 crores, ₹300 crores will be used to repay debt, making them net debt-free, ₹100 crores for working capital needs, and ₹287 crores is offer for sale and ₹111 crores for general corporate purposes. The order book is ₹1600 crores, 1.3 times FY25 revenue. The company projects revenue of ₹3800-4000 crores by FY28, with 40-50% from higher KVA transformers. The plan is to leverage operating leverage, with revenue growth, stable interest costs, product portfolio changes, and margin expansion of 200-300 basis points over the next two years. Despite the high IPO price, Sachin suggests applying and holding long-term.
The host says he will apply for listing gains and then see in the long term. He expects listing gains of 5-10%.
Seshaasai Technologies (Mainboard)
Seshaasai Technologies, incorporated in 1993, is a technology-driven solution provider specializing in payment solutions and communication services, primarily catering to the BFSI industry. The IPO size is ₹83 crores, with ₹480 crores fresh issue and ₹350 crores OFS. The market cap is ₹6800 crores, implying a 12% dilution. FY25 financials show a top line of ₹1475 crores and a bottom line of ₹222 crores, resulting in a PE of around 32-33 times trailing. The lead managers are ICICI Securities and SBI Capital Markets.
Sachin elaborates that Seshaasai Technologies, based in Maharashtra, operates in secure payment and communication solutions for both BFSI and non-BFSI sectors. They manufacture debit cards, credit cards, prepaid cards, gift cards, checkbooks, bank statements, and insurance policies. They also provide IoT-enabled products like NFC tags, e-SIMs, and RFID tags. Payment solutions form 63% of revenues, with 92 million cards supplied in FY25. The remaining 30% comes from statements, policies, ID cards, and information via SMS and email. The final 7% comes from EV chargers, FASTag, and NFC/RFID tags.
They have 700+ clients, including 15-16 public sector banks and 10 private banks. 95% of their revenues are recurring due to long-term relationships with banks. They have a 32% market share in the debit card sector as of FY25. Over 65% of their clients have been with them for 10+ years. They have 24 manufacturing units across India, all certified. The average utilization of their card capacity is 44-45%, but during festivals, it goes above 80%.
In FY23, they had ₹1153 crores of revenues with 12% EBITDA. In FY24, revenues were ₹1557 crores with 15% EBITDA, including a one-time order of ₹150 crores. In FY25, revenues fell to ₹1474 crores, but EBITDA increased to 24% and PAT to 15% due to better raw material prices, staff cuts, and a shift to IoT products. Normalizing for the one-off order, growth was around 6-7%. The debit card industry is expected to grow around 12%. Sachin expects Seshaasai to grow 12-13% due to diversification into IoT.
Positives include high entry barriers due to regulations and certifications. AITA to cash conversion is also good at 50-55%. Risks include the rise of virtual cards and UPI. Management claims they are not concerned with card usage but with card issuance. Growth outlook for the card business is not very good, hence the diversification. Market share has fallen from 35-36% to 31-32%. Chips for the cards are imported from Korea and Europe.
A pre-IPO round of ₹120 crores included Tata, IG, and Valuecast India. In the main issue, ₹330 crores is offer for sale, with promoters selling 5.5% stake, resulting in 82% post-IPO promoter holding. From the fresh issue, ₹300 crores will be used to repay debt, including ₹70 crores from the pre-IPO round. Post-IPO, debt will be ₹50-60 crores. ₹1908 crores will be used to increase manufacturing facilities. The IPO is priced at 30 times trailing earnings. Normalizing margins, it's around 35 times trailing. Factoring in growth and interest cost savings, it could be 26-27 times forward. The anchor list includes ভালো names like Nippon, Optimix, and Motilal Oswal. There are no listed peers. Sachin concludes that they will be applying personally.
The host mentions a similar company with a pre-IPO round and expresses interest in figuring out the market. He will also be applying, citing the niche sector.
Justo Realfintech (SME)
Justo Realfintech, incorporated in 2019, is a full-services real estate mandate company offering advisory, sales strategy, marketing, and CRM services. The IPO is ₹63 crores, all of which is a fresh issue. The market cap is ₹239 crores, implying a 26% dilution. FY25 financials show revenue of ₹81 crores and PAT of ₹15 crores, resulting in a PE of 15. The lead manager is Vivro Financial.
The host explains the business model: Justo Realfintech outsources sales and marketing for real estate companies, allowing them to focus on building. They act as channel partners, using software to build and send mandates to people. They also facilitate loans. Their income comes from a percentage of the top line they sell for builders. The GMV till date is ₹88,000 crores.
The industry is unfragmented, with many unorganized players. JLL also does this, but more on the B2B side. The promoter has experience in real estate and was the CFO of Bombay Dyeing. A risk is the potential for a down cycle, leading to inventory issues. The host hopes the promoter has learned from past experiences.
Considering it's a Vivro issue and the anchor book is good, the host feels confident applying at the IPO price. He will also probably hold for some time. Promoter holding is low at 51%. It's an unorganized play, so it can go in any direction. He compares it to a Nicis where the market was unsure how to rate it. He will look for the management commentary to understand the reason for FI24 bottom line decrease.
Closing Remarks
The host concludes the episode, mentioning that it will be posted the next morning due to editing. They may not cover the remaining companies. Viewers are encouraged to read more about the companies and form their own opinions. They thank everyone for watching and ask for feedback in the comments. They acknowledge time constraints but will continue posting updates on their YouTube channel.
