EPACK Durable Limited

EPACK Durable Limited -IPO DETAILS 

Company Overview 

EPACK, India's second-largest air conditioner Original Design Manufacturer (ODM), supplies its products to prominent brands such as Blue Star, Daikin, Carrier Midea, and Voltas. Originally operating as an Original Equipment Manufacturer (OEM) in 2003, the company later shifted its strategy to become an ODM. Unlike an OEM, which manages the entire process from design to marketing and quality control, an ODM focuses solely on manufacturing the product for another company based on their design and branding. This specialization allows the ODM to concentrate exclusively on the manufacturing aspect without the need to handle design and marketing.  

While primarily focused on air conditioner manufacturing in 2013, EPACK expanded its portfolio to include Small Domestic Appliances (SDA) for companies like Bajaj Electricals and Usha Electricals. With three manufacturing facilities located in Dehradun, Uttarakhand, and Rajasthan, the company has a substantial production capacity. Collectively, these facilities can annually manufacture 1.1 lakh water dispensers, 12 lakh induction cooktops, and 3 lakh mixer grinders. This indicates a diversified manufacturing capability, showcasing the company's presence not only in air conditioner production but also in the production of essential household appliances. To gain a more in-depth understanding of the company's position in the industry, it is essential to delve further into its market dynamics, competition, and overall industry trends. 

Objective of the IPO 

Here are a few quick reasons why company is going public:  

1. The company plans to allocate Rs. 230 Cr for extensive capital expansion, a strategic initiative scheduled to be executed until FY26.  

Additionally, Rs. 80 Cr has been earmarked for the purpose of repaying existing borrowings, reflecting a commitment to financial stability.  

3. The residual funds will be dedicated to meeting general corporate needs, 

Company Financials 

Key Performance Indicator 

Pros 

1. EPACK has cultivated enduring relationships with prominent brands such as Daikin and Voltas, boasting an impressive average partnership duration of 8.7 years. As the second-largest player in the Original Design Manufacturer (ODM) segment for Room Air Conditioners, the company holds a significant position in an industry marked by continuous growth and sustained demand.  

2. The company has achieved advanced vertical integration by developing capacities across its three manufacturing units, enabling it to control a majority of the supply chain necessary for the production of Room Air Conditioners (RAC) and Small Domestic Appliances (SDAs). 

3.  With a robust background in product development, EPACK stands out as a pioneer in designing and manufacturing Air Conditioners. 

4.  The company's innovation extends to the production of cutting-edge components such as 5 mm heat exchangers and the use of R32 Refrigerant, showcasing its commitment to staying at the forefront of technological advancements in the industry.

Cons 

1. EPACK's revenue concentration is notable, with its top 5 customers contributing a substantial 82.66% of its FY23 revenue, indicating a reliance on a limited client base for a significant portion of its income. 

2.  The absence of long-term agreements poses a potential vulnerability, especially during unforeseen events like the Covid pandemic, which could disrupt orders and impact the company's stability. 

3.  The need for constant redevelopment underscores the dynamic nature of the market, as EPACK must continuously adapt to evolving customer preferences. Failure to do so could have severe repercussions on its business. 

4.  In a competitive landscape, EPACK faces strong competition in the Room Air Conditioner (RAC), Mixer Grinder, Induction Cooktops, and Water Dispenser segments. The company's earnings are susceptible to the market dynamics, with innovative products or more competitive pricing strategies from rivals posing a significant threat to its financial performance. 

How to Apply for this IPO 

1. Go to https://ipo.adityatrading.in/ 

2. Enter your Client ID 

3. Enter the OTP received in your registered mobile number. 

4. Choose the IPO and click on apply button. 

5. Enter the UPI ID, Quantity, and Cut off the price. 

6. Click on submit button 

7. Confirm the mandate request received on your phone by entering the UPI Pin. 

You can also watch our youtube video on “How to Apply on IPO” by clicking on the link “https://www.youtube.com/watch?v=1qOI8dCpl1I&ab_channel=ATS”