Dixon Technologies IPO - Details and review and allotment status

About Dixon Technologies 
Dixon IPO Allotment status

#Dixon Technologies is known as the largest home grown design-focused and solutions company engaged in contract manufacturing products in the consumer durables, lighting and mobile phones markets in India. MOPE (Motilal Oswal Private Equity - IBEF Fund) invested Rs. 40 crore in the company for 24.31% stake in July 2008. 

Dixon IPO Allotment status
Their product portfolio includes - 

(i) consumer electronics like LED TVs; 

(ii) home appliances like washing machines; 

(iii) lighting products like LED bulbs and tubelights, downlights and CFL bulbs; and 

(iv) mobile phones. 

They also provide solutions in reverse logistics i.e. repair and refurbishment services of set top boxes, mobile phones and LED TV panels. As per the Frost & Sullivan Report, they are the leading manufacturer of lighting products of CFL, LED bulbs, LED TVs and semi-automatic washing machines in India. Their key customers include Panasonic India Private Limited, Philips Lighting India Limited, Haier Appliance (I) Pvt. Ltd., Gionee, Surya Roshni Limited, Reliance Retail Limited, Intex Technologies (I) Ltd., Mitashi Edutainment Pvt. Ltd., Dish Infra Services Private Limited. They are a fully integrated end-to-end product and solution suite to original equipment manufacturers (“OEMs”) ranging from global sourcing, manufacturing, quality testing and packaging to logistics. They are also a leading Original Design Manufacturer (“ODM”) of lighting products, LED TVs and semi-automatic washing machines in India. As an ODM, they develop and design products in-house at our R&D centre. They manufacture and supply these products to well-known companies in India who in turn distribute these products under their own brands. 

Key Financials

                                                                         In Crores*

Financial Year	Fy 13	Fy 14	Fy 15	Fy 16	Fy 17
Revenue	726.2	1065	1116.8	1253.6	1645.6
PAT	1.93	10.9	9.81	36.4	46.4
Profit margin	0.3%	1.05%	0.9%	3%	2.8%

About the IPO

• The price band for the offer, fixed at Rs 1,760-1,766, according to RHP
• The issue to open on September 6 and close on September 8
• IPO includes fresh Issue of shares worth 60 crore and offer for sale for 540 crore (for MOPE)
• Market lot – 8 Shares
• The script to be listed in BSE and NSE
• Issue has allocation quota of 50% for QIBs, 15% for HNIs and 35% for retail category

Promoter and Executive Chairman, Sunil Vachani (holding 43.97%) and seven investors are looking to sell 30.5 lakh equity shares, amounting to Rs 540 crore at the upper end of the price band, while 3.4 lakh equity shares worth Rs 60 crore will be in the form of fresh issuance, the draft prospectus said.

IPO Proceeds to be used for –

• Private Equity Firm MOPE to exit with Rs. 540 crore
• To repay debt,
• Set-up an LED manufacturing unit at Tirupati  
• Strengthen the lighting products vertical with backward integration capabilities at Dehradun facility
• Upgrade information technology infrastructure
• General corporate purposes.

Mymoneystreets take–

#DIXON IPO - Dixon is B2B player which works with all leading consumer electronics companies(Phillips, Panasonic, Haier, Dish TV, Gionee has no direct listed competitor to compare with.  It has a leadership position in the segment it works in and holds strong relations with major Consumer durable and Electronics Players. They have strong R&D centre. The majority part of the IPO proceed will go to MOPE, remaining part will be invested in other mentioned areas.

#Dixon Technologies has consistently posted revenue growth and PAT in double digit over 5 years. This is a fully priced IPO, at the P/E of 39 to 47 at the offer price in the lower and higher band assessed on FY17 financials. Companies in this segment run on very thion margin, but have a high and consistent volume growth. The company has good return ratio and high asset turnover. Stellar growth and high-return ratio deserves premium and market historically rewarded such companies with higher PE. 

This IPO is good for investors with medium to high risk appetite and long-term view. Wouldn’t recommend this IPO for listing gains.

HappyLoan – to facilitate dreams come true

View on the industry – Consumer electronic markets including – lights, waching machines, TV industry, is seeing a huge growth over a decade. The growth in the consumer electronics market in India has interestingly brought about gradual but radical change in the suppliers composition. The market which was dominated by tier-I players witnessed increasing share of tier-II players. The factor behind their increasing acceptance has been the availability of technology and regional presence. India is experiencing a positive change in producing locally an advantage over Chinese imports in many of the segments under discussion. The industry in discussion is expected to see considerable growth over next 5 years.

Book Running lead managers -

IIFL Holdings, IDFC Bank, Motilal Oswal Investment Advisors and Yes Securities are the book running lead managers to the issue. Four merchant bankers associated with this issue have handled 22 public issues in past three years out of which 8 issues closed below the IPO on listing date.

Some of the Risk factors would be as follow us - 

Risk Factor 1. They are highly dependent on certain key customers for a substantial portion of their revenues. Loss of relationship with any of these customers may have a material adverse effect on their profitability and results of operations. 

• Action undertaken by the government to tax the business of theirs or that of their customers 
• Reduced consumer spending on discretionary items in their customers’ key markets
• Recession in India in which their  key customers’ operate their businesses 
• Loss of market share of our key customers’ products which are manufactured by us; 
• Failure of key customers’ products to gain widespread commercial acceptance; 
• Key customers’ inability to effectively manage their operations or also seeing a change in their management or constitution which may render us not being a preferred choice for manufacturing products for them; and 
• Changes in laws affecting their customers to operate profitably

Risk Factor 2. They do not obtain firm and long-term volume purchase commitments from their customers. If their customers choose not to renew their agreements with us or continue to place orders with them, their business and results of operations will be adversely affected.

Risk Factor 3.The markets in which their customers compete are characterized by consumers and their rapidly changing preferences, advancement in technology and other related factors including lower manufacturing costs and therefore as a result their Company may be affected by any disruptions in the industry

Risk factor 3: They may, from time to time, they look for opportunities to enter strategic alliances, acquire businesses or enter into joint venture arrangements. Any failure to manage the integration of the businesses or facilities post such acquisition or joint venture may cause profitability to suffer

Risk factor 4: They may be subject to financial and reputational risks due to product quality and liability issues which may have an adverse effect on their business, financial condition and results of their operations

Disclaimer - This review is not to be taken as recommendation to BUY. This should be used for information purpose only

HappyLoan – to facilitate dreams come true

#DixonTechnologiesIPO
Dixon IPO Allotment status

HappyLoan – to facilitate dreams come true

Partner for Indian MSME industry - ArthImpact

#happyloan #digitalloans #paperlesss loans #arthimpact

Financial services in India is witnessing a significant growth in the area of investments and lending. The avenues and the methods are increasingly getting easy and affordable with digital disruptions. Start-up ecosystem of India is contributing significantly to this revolution. One of such revolution I would like to talk here about is digital lending to the unserved population of India.

‘Digital lending’ concept initially began with lead generation, now is evolved to complete end to end paperless solution. One of the pioneer of this segment is “Happy Loans”, launched to address the needs of small businesses, they lend from Rs. 2000 to 1 lakh with flexible tenure and an attractive rate of 2% per month which is almost at par with the personal loans provided by Banks and much better than informal lending. “Happy Loans”, a micro-lending initiative of #ArthImpact, a self-funded start-up by Mr. Manish Khera and Gautam Ivatuary. HappyLoan mostly served the un-served and underserved Indians. They have taken up alternate channels and method to determine the repayment capacity of individuals. “Happy loans” is a microfinance initiative with presence in 100 cities in India, also helps borrowers building a credit history by disciplined repayment approach.

Manish Khera is known to be a serial entrepreneur, and one of the early movers in financial inclusion and digital banking. Manish Khera’s two decades of corporate journey began at ICICI Bank, where he played a crucial role in setting up the institution’s Alternate Channels Group, after which he moved on to found FINO Paytech in the year 2006, which has served over 70 million customer. He then joined Airtel Payments Bank as CEO. Through his journey of banking, he realized the demand gap for lending to customers with formal credit history and steady income source is huge. The acquisition cost of Banks is too high to address the small borrowers. So, to address the need of these 600 mn people who do not have access to mainstream credit facility in India, he launched Arth Impact. The organization is bound by its vision of financial inclusion. Arth Impact is more focused towards a solution that could ease the everyday cash flow problems.

The attractive features and benefits of Happy Loans are as follows-

·       Lends Rs. 2000 – Rs. 1 lakh ( for ex - you may take the loan to re-do your shop/ buy some new items)

·       Flexible tenure of repaying the loan beginning 30 days

·       Loans are disbused within few hours

·      No physical filing of documents required

·      Complete end to end digital process to seal any leakages

·      Low cost, as the complete lending is digital, minimizing the operational cost

·     Customer without credit history, can build credit history by taking loan from Happy Loan

     

Loans are not bad, we need to be responsible with it

   Moneystreets Take – Besides structured microfinance Industry, Arth Impact promoted “Happy Loans” stands out with its low cost structure, easy interest repayment, and flexible tenure makes it a convenient option. The background of the promoters is credible and note-worthy which ensures a superior experience. With end-to-end digital solution, it is new-age product with best experience for the customers.

#happyloans #digitalloans #paperlesss loans

Loans are not bad, we need to be responsible with it

#Loan and the peril of the compounding

The topics on savings and investing through various means and modes have become quite popular, thanks to the conscience of regulatory bodies and growing numbers of personal finance experts. Before we go into any other diacussion, we need to appreciate that Indians are known for their savings habbit with more than 30% of their income goes into savings. In Investing, wide range of financial products have been introduced through last three decades. Mutual fund industry alone trebled their assets under management with Indian retail investors in last decade. Concept of SIP and power of compounding is already doing the magic. However, the overall financial behavior is yet to mature. 

The term "risk" doesnt go well with our especially middle class elders. The younger generation however are more experimental given their high disposable income and less family responsibility and small family structure. In last 100 years Indian economy  has gone through massive change, so is the socio-economic behavior. But due to lack of adequates and inherent orientation, the new earning fraternity is often found clueless and spoilt for choice on the financial front. 

Loan is one of those frowned terms in Indian households as the equity investing has been. Thanks to evergrowing mutual funds industry, it has turned around the conservative indian investors by beating market returns and with superior offering. But, loan is still a forbidden word owing to our paternalistic regulators and still conservative experts. Its high time, that we look at Loan more rationally. This is not neccesarily an evil. The evil is caused because of irresponsibility, which is result of low or no understanding of the product. Loan as a financial instrument is one of the oldest financial products in the world. If we have to define loan in simple terms, when we are depositing money in the bank, we are lending our money to bank and bank in returns is giving us predecided interest depending on the tenure. Same way bank lends out with a predecided term and interest rate. The difference is bank being a large institution with huge establishment and loan repayment capacity, it offers us lower interest when we lend to the bank and it charges a higher interest rate from the customers, as it runs higher risk on its capital by lending to individuals. 

Decade ago things were little different. Especially India had a practice of "sahukar", the informal lending channel, which ruined many households with malpractice for centuries. The trauma and fear has been carried as burden by generations. Even post independence, untill 1990s, the interest rates were very high in the banks and with the compounding effect, cost of loan was very high. But, with lowering the interest rates and competitive environment, loans are available at much lower cost. 

However, no way I mean that one should take a loan without any rhyme or reason. The way investment has a purpose, loan should be taken 1. If it is absolutely neccesary 2. You have enough money to pay and just want to ease the cash crunch. Lending beyond repayment capacity will create huge trouble.

The way investing early is applauded because of power of compounding, for loans it is exactly opposite, we may call ot as "peril of compounding". If one misses out loan repayment instalments, the interest would be added to the outstanding amount and the interest will be calculated on the whole outstanding ruther than the principal in the next instalment onwards.

Given all the facts, India is waking upto the reality of modern financial system of the world, and doors have opened for new age loan products especially in the personal loan space like peer to peer lending, short term small loans lending, credit line addition to our ever evil Credit Cards. Thanks to prudent approach of RBI and CIBIL history, loan industry is well regulated. In all likelyhood, loans will be mire accepted product and will be used very responsibly by us