Punjab based Amber Enterprises India Limited (Incorporated in 1990) is manufacturer of air conditioners and its component in India. With the market share of 55.4%, Amber is the market leader in the Room Air Conditioner . The company manufactures RAC’s for 8 out of the 10 top RAC brands in India including Daikin, Hitachi, LG, Panasonic, Voltas and Whirlpool. These 8 brands have over 75% of market share in India.The Company has 10 manufacturing facilities across seven locations in India.
Super anchor book! Sold 20.8 lakh equity shares to 15 anchor investors for Rs. 178.71 crore
Abu Dhabi Investment Authority
Blackrock India Equities Mauritius Limited
Goldman Sachs India Limited
Kuwait Investment Authority Fund
ICICI Prudential Business Cycle Fund Series 2
ICICI Prudential Value Fund – Series 10
HDFC Small Cap Fund
SBI Magnum Multicap Fund
Reliance Small Cap Fund
Aditya Birla Sun Life
List of Anchor Investors :
The Product portfolio includes :
1. Room Air Conditioners : This includes window air conditioners and indoor units and outdoor units of split air conditioners.
2. RAC Components : Critical components such as heat exchangers, motors and multi-flow condensers.
3. Other Components : Other related components including case liners for refrigerator, plastic extrusion sheets for consumer durables and automobile industry, sheet metal components for microwave, washing machine tub assemblies and for automobiles and metal ceiling industries.
The Company has a dedicated R&D centre at its Rajpura facility which is equipped and is accredited by National Accreditation Board for Testing and Calibration Laboratories (NABL) with ISO/IEC 17025:2005 certification and facilities for 3D modelling, quality and product testing.
IPO Opens on : 17th Janaury 2018
IPO Closes on : 19th January 2018
Issue Type: Book Built Issue IPO
Issue Size:[.] Equity Shares of Rs 10 aggregating up to INR 600.00 Cr
#Fresh Issue of [.] Equity Shares of Rs 10 aggregating up to INR475.00 Cr
#Offer for Sale of [.] Equity Shares of Rs 10 aggregating up to INR 125.00 Cr
Face Value: INR 10 per Share
Price Band: INR 855-859 Per Equity Share
Minimum Order Quantity:17 Shares
Listing will at: NSE,BSE
Finalisation of Allotment : 24 January 2018
Refund : 25 January 2018
Transfer of Shares to Demat A/c:29 January 2018
Listing Expected on 30 January 2018
Objects Of The Issue:-
- Prepayment or repayment of all or a portion of certain borrowings – INR400 crore
- General Corporate purposes – remaining amount
Edelweiss Financial Services Limited
IDFC Bank Limited
SBI Capital Markets Limited
Registrar to the IPO:
Karvy ComputerShare Private Ltd
Promoters Of the Company:-
- Jasbir Singh
- Daljit Singh
Global Air Conditioner Market – Split by Segments
Global RAC Volume Market Size and Forecast (Million Units)
RAC Market Penetration – Select Asian Countries and Global
1. Market leadership in the RAC OEM/ODM industry in India.
2. One stop solutions provider for the RAC industry with high degree of backward integration.
3. Strong customer relationships with the majority of leading RAC brands in India.
4. R&D and product design capabilities leading to high proportion of ODM business.
5. Track record of financial performance.
6. Economies of Scale.
7. Culture of innovation and highly experienced management.
Market Penetration of Consumer Durables, India vs. Global (%), Fiscal 2015
Evolution of Room Air Conditioners in India
- Amber Enterprises net worth, as of Sept. 30, was close to Rs 363 crore, translating into book value of Rs 115 a share after fresh issuance.
- Its revenue has been growing at an annualised rate of 17 percent, while net profit rose at 9 percent in five years to March 2017.
- For the first half ended September, revenue and net profit stood at Rs 938 crore and Rs 27 crore, respectively.
- Earnings before interest, tax and depreciation and amortisation grew at a CAGR of 23.5 percent, while Ebitda margins expanded 150 basis points in the last five years to 7.8 percent.
- For the first half ended September, Ebitda and margins stood at Rs 84 crore and 9 percent, respectively.
- The company has a total debt of close to Rs 554 crore, which would fall it looks to use Rs 400 crore from the IPO proceeds to pare debt.
Market Structure – RAC
Market Share Analysis – RAC
Expansion of existing product portfolio with a focus on ODM.
Expand domestic customer base and grow export sales.
Continuing innovation and strengthening the R&D capacity.
Pursue selective acquisitions, partnership opportunities and inorganic growth.
Continue to focus on increasing efficiency and profitability.
Amber’s business is dependent on certain principal customers and the loss of, or a significant reduction in purchases by, such customers could adversely affect its business, financial condition, results of operations and future prospects.
If its customers do not continue to outsource manufacturing, or if there is a downward trend in OEM/ODM business, its sales could be adversely affected.
Any slowdown in the RAC industry may adversely impact its business, results of operations, financial condition and cash flows.
Amber’s inability to identify and understand evolving industry trends, technological advancements, customer preferences and develop new products to meet its customers’ demands may adversely affect its business.
Amber do not have firm commitment agreements with its customers. If its customers choose not to source their requirements from us, its business and results of operations may be adversely affected.
Amber have experienced growth in the past few years and if company are unable to sustain or manage its growth, its business and results of operations may be adversely affected.
Amber failure to compete effectively in the highly competitive RAC and equipment manufacturing industry could result in the loss of customers, which could have an adverse effect on its business, results of operations, financial condition and future prospects.
Pricing pressure from customers may adversely affect its gross margin, profitability and ability to increase our prices.
Amber manufacturing capacity may not correspond precisely to customers’ demands which may affect its results of operations.
Amber Enterprises and its Subsidiaries are involved in certain legal proceedings, which, if determined against us could have a material adverse effect on its financial condition, results of operations and its reputation.
Amber have undertaken and may continue to undertake strategic investments and alliances, acquisitions and mergers in the future, which may be difficult to integrate and manage. These may expose us to uncertainties and risks, any of which could adversely affect its business, financial condition and result of operations.
Amber Enterprises has no listed competitors. Dixon Technologies Ltd. has a similar business model but caters to a different market—an equipment vendor for makers of washing machines, LED televisions, lighting products and mobile phones.
“At the higher end of the price band of Rs 859, the issue is valued at 96.8 times price to earnings (PE) on FY17 basis (post dilution) and 49.4 times on first half of FY18 (annualized) basis. While the company holds leadership position , it is difficult to justify its valuation due to lack of clarity of the growth trend in the financial performance.
“Single digit earnings before interest, taxes, depreciation, and amortization (EBITDA) margin, average of 8% for last 5 years and return on equity is 10%.
Grey market premium
GMP is 575, Kostak is 550, Subject to Rs. 6000/-
Investors may consider for short to medium term gain.
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