What You Must Know About QVC Exports IPO: Price ₹86 per share

About QVC Exports

QVC Exports Limited was established in August 2005 and trades ferroalloys, including ferro silicon, high-carbon ferromanganese, low-carbon ferro manganese, and high-carbon ferro chrome. As of March 31, 2024, 82.95% of the company's revenue came from its export business.

As of January 31, 2024, the company exported to some nations, including Afghanistan, Korea, Italy, Ukraine, the United Kingdom, Belgium, and Oman. It has also been exported to Japan, Bangladesh, Vietnam, Thailand, and Afghanistan. The organization adheres to the ISO 9001:2015, ISO 14001:2015, and ISO 45001:2018 management system standards.

The company will employ 15 people as of August 6, 2024.

The Objective of the Issue

• Repayment of Unsecured Loans: QVC Exports aims to utilize part of the IPO proceeds to repay unsecured loans. This repayment will strengthen the company's financial stability by reducing debt, improving creditworthiness, and freeing up resources for future growth and operational needs.
• Working Capital Requirements: The company must allocate funds to meet its working capital needs. This will ensure smooth day-to-day operations, support business expansion, and enable QVC Exports to maintain adequate inventory levels, manage cash flow effectively, and seize new business opportunities.
• General Corporate Purposes: QVC Exports plans to use some IPO proceeds for general corporate purposes. This may include enhancing business infrastructure, investing in new technologies, and supporting other strategic initiatives that contribute to the company's overall growth and long-term success.

Highlights of QVC Exports IPO

QVC Exports IPO is set to launch with a fixed price issue of ₹24.07 crores. The issue comprises a fresh issue of ₹ 20.5 lakh shares amounting to ₹17.63 crores with an offer-for-sale of 7.49 lakh shares aggregating to ₹ 6.44 crores. Here are the key details of the IPO:

• The IPO opens for subscription on August 21, 2024, and closes on August 23, 2024.
• The allotment is expected to be finalised on Monday, August 26, 2024.
• Refunds will be initiated on Tuesday, August 27, 2024.
• Credit shares to Demat accounts are also expected on Tuesday, August 27, 2024.
• The company will tentatively list on BSE SME on Wednesday, August 28, 2024.
• The price is fixed at ₹86 per share.
• The lowest lot size for the IPO application is 1600 shares.
• Retail investors need to invest a minimum of ₹137,600.
• The minimum investment for High-Net-Worth Individuals (HNIs) is 2 lots (3,200 shares), amounting to ₹275,000.
• Khandwala Securities Limited is the book-running lead manager for the IPO.
• Cameo Corporate Services Limited serves as the registrar.
• Aftertrade Broking is the market maker for the issue.

QVC Exports IPO - Key Dates

The overall timeline for the QVC Exports IPO is as follows:

QVC Exports IPO Issue Details/Capital History

There is a fixed price issue of Rs 24.07 crores for QVC Exports. The issue consists of an offer to sell 7.49 lakh shares, valued at Rs 6.44 crores, and a new issuance of 20.5 lakh shares, valued at Rs 17.63 crores.

The QVC Exports IPO subscription period commences on August 21, 2024, and ends on August 23, 2024. The allocation for the QVC Exports IPO is anticipated to be completed on Monday, August 26, 2024. The proposed listing date for the QVC Exports IPO is Wednesday, August 28, 2024, on NSE SME.

QVC Exports IPO Allocation & Minimum Investment Lot Size

The IPO shares of the company are distributed as follows:

A minimum of 1600 shares, as well as multiples of those shares, are up for bid. The minimum and maximum share and amount of investments made by HNIs and retail investors are shown in the table below.

SWOT Analysis: QVC Exports IPO

Strengths

• Strong reputation in the export market with a solid track record of delivering quality products.
• Established relationships with international clients, ensuring a steady demand for their goods.
• Diverse product portfolio catering to various market segments, reducing dependency on a single product line.
• Experienced management team with deep industry knowledge and expertise in global trade

Weaknesses

• The company is highly dependent on a few key markets for revenue, making it vulnerable to economic changes in those regions.
• Limited brand recognition in domestic markets compared to international presence.
• Fluctuations in raw material prices can impact profit margins.
• High logistics and shipping costs due to international operations

Opportunities

• Expansion into emerging markets with growing demand for export goods.
• Increasing global demand for sustainable and ethically produced products, aligning with their offerings.
• Potential to diversify product lines further and explore new market niches.

Threats

• Currency fluctuations impact profitability due to international trade.
• Global economic downturns affecting demand in key export markets.
• Intense competition from both local and international players in the export industry.
• Regulatory changes and trade policies in key markets could challenge business operations

Financial Highlights: QVC Exports IPO

QVC Exports Limited has exhibited remarkable financial growth over the past three fiscal years, showcasing its robust performance and strategic expansion efforts. The company's assets have significantly increased, rising from ₹5,461.44 lakhs in FY22 to ₹9,386.23 lakhs in FY24, reflecting substantial investments and scaling operations. This expansion is further supported by a dramatic increase in revenue, which surged from ₹12,782.5 lakhs in FY22 to ₹45,462.68 lakhs in FY24. This 112% revenue growth between FY23 and FY24 underscores the company’s effective market strategies and growing product demand.

The Profit After Tax (PAT) has also shown impressive growth, climbing from ₹90.54 lakhs in FY22 to ₹392.76 lakhs in FY24. This represents a 129% increase in PAT between FY23 and FY24, highlighting improved operational efficiencies and profitability.

Regarding net worth, QVC Exports Limited has strengthened its financial position, rising from ₹2,668.09 lakhs in FY22 to ₹3,407.9 lakhs in FY24. The reserves and surplus have steadily grown from ₹2,208.79 lakhs in FY22 to ₹2,567.73 lakhs in FY24, further solidifying the company's financial health.

However, the company’s total borrowing increased from ₹2,159.43 lakhs in FY22 to ₹4,981.73 lakhs in FY24. This suggests that while QVC Exports Limited is leveraging debt to fuel its expansion, it also reflects a higher financial risk that the company needs to manage carefully.