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Exxaro Tiles IPO Today: GMP, Price Band, Lot Size, Key Details. Should you Subscribe?

Exxaro Tiles plans to use the proceeds from the issue to fund the repayments and pre-payments of the company borrowings.

Exxaro Tiles plans to use the proceeds from the issue to fund the repayments and pre-payments of the company borrowings.

Analysts have noted that the company is seeking to expand its already vast network and also reduce the external dependency which will improve its margins.

Exxaro Tiles is opening its initial public offering (IPO) on August 4. The issue will remain open for three days for subscription and it will close on August 6, Friday. The price band of the IPO is listed as Rs 118 to Rs 120 per equity share. The anchor investments for the issue took place on August 3 and the company managed to raise Rs 23.68 crore from the anchor investors ahead of the Exxaro Tiles IPO.

The company’s issue had a grey market premium of Rs 22 on August 4, at approximately 11:00 IST. This indicated that the shares were trading at Rs 140 to Rs 142 on the unlisted grey market on Wednesday.

The issue size is Rs 161.09 crore with 13,424,000 equity shares. The public offering is made up of a fresh issue worth Rs 134.23 crore with 11,186,000 equity shares as well as an offer for sale (OFS) worth Rs 26.86 crore that carries 2,238,000 equity shares.

The Exxaro Tiles IPO has a lot size of 125 shares on the lower end that will cost investors Rs 15,000 to put in an application. On the higher end, the lot size stands at 13 lots with 1,625 shares that carry an application cap-off amount of Rs 195,000.

The objective of the IPO is to use the proceeds from the issue to fund the repayments and pre-payments of the secured borrowings that were availed by the company. The rest of the funds will be directed towards aiding the working capital requirements as well as some general corporate purposes.

The promoters for the company in this issue are Mukeshkumar Patel, Kirankumar Patel, Dineshbhai Patel, and Rameshbhai Patel.

Exxaro Tiles was incorporated in 2008 as a manufacturer and marketer of vitrified tiles. It has a product portfolio of around 1000 different tile designs that come in six different sizes. Topaz Series, Galaxy Series, and High Gloss Series are some of the popular products of the company. Its main target audience is large infrastructure projects such as residential, educational, commercial, hotels, hospitals, government, builders or developers and religious institutions to name a few. The company also has international ties as it exports tiles to countries such as Poland, Bosnia and the US amongst others.

Should You Subscribe to Exxaro Tiles IPO?

Ajit Mishra the VP of Research from Religare Broking said in a note, “Over the years, Exxaro Tiles have gradually diversified and expanded from a manufacturer of frit (one of the raw materials) to manufacturing vitrified tiles which have helped the company to grow its business and cater to different customer needs. Along with having a strong product portfolio and large dealer network, the company’s focus on innovation and quality products aided to gain a higher market share.”

Exxaro Tiles stands out for its diverse product portfolio. Its strengths as a company lie in the fact that it has a variety of vitrified tiles design choices in different sizes. It also has a large network of dealers. Currently, the company has around 2,000 plus dealers as part of its network. Along the same lines, it has a strong presence across India as it is active in 27 states. On the other side of that coin, it also has a strong international presence in more than 13 countries.

In the note, Mishra mentioned that the company is planning to expand its brand visibility by expanding its already large network. Exxaro Tiles also plan to reduce the external dependency of the company which will help improve its operating margins.

Adding his analysis for the company going forward he said, “On the financial front, the company’s performance has been stable. We have a positive view on the company from the long-term perspective.”

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first published:August 04, 2021, 11:32 IST