Epack Durable IPO Ignites Investor Interest: Retailers Lead Day 1 Charge, What's the Latest GMP?

The eagerly awaited Initial Public Offering (IPO) of Epack Durable, a prominent leader in the original design manufacturing (ODM) sector for room air conditioners, successfully concluded its opening day on January 19. The issue saw an overall subscription of 0.81 times, signaling a promising start.

While institutional and non-institutional investors adopted a more cautious stance, it was the enthusiastic participation from retail individual investors (RIIs) that truly set the pace, showcasing robust confidence in the company's future trajectory.

As Day 1 drew to a close, the data highlighted that the retail investor segment was notably oversubscribed by an impressive 1.13 times, underscoring significant individual investor appetite.

In contrast, the Non-Institutional Investor (NII) portion garnered a subscription of 0.65 times, and Qualified Institutional Buyers (QIBs) registered an initial interest level of 0.01 times. The IPO window remains open until January 23, offering prospective investors ample opportunity to join in.

Epack Durable has strategically set its IPO price band between Rs 218 and Rs 230 per equity share, with a minimum application lot size of 65 shares.

This structure translates to a minimum investment of Rs 14,950 for a single lot, based on the upper end of the price band. Prior to the IPO's public opening, the company successfully raised a substantial Rs 192 crore from a diverse and influential group of anchor investors. This esteemed list included global powerhouses such as Abu Dhabi Investment Authority (ADIA), CLSA Global Markets PTE, Eastspring Investments India, alongside several leading domestic mutual funds, a clear endorsement of Epack Durable's potential from institutional giants.

The total offer size for Epack Durable's IPO is pegged at Rs 640.05 crore.

This comprises a fresh issue of Rs 400 crore and an Offer For Sale (OFS) amounting to Rs 240.05 crore by existing shareholders. The capital generated from the fresh issue is strategically allocated towards pivotal growth initiatives. These include funding crucial capital expenditure for expanding manufacturing capabilities, the repayment or pre-payment of certain outstanding borrowings, and general corporate purposes, all designed to fortify the company's financial health and enhance its operational prowess.

As a leading ODM for room air conditioners in India, Epack Durable has successfully diversified its product portfolio to encompass a range of small home appliances.

The company boasts a significant market share coupled with a robust and expansive manufacturing infrastructure. From a financial perspective, Epack Durable has demonstrated an impressive growth trajectory, with its revenues achieving a Compound Annual Growth Rate (CAGR) of 44.97% between fiscal years 2021 and 2023.

However, the company did report a decline in profit for FY23, a situation primarily attributed to the prevailing increase in raw material costs and elevated interest expenses, challenges commonly encountered by manufacturing entities in the current economic landscape.

In the unofficial grey market, the Grey Market Premium (GMP) for Epack Durable's shares was observed ranging from Rs 20-25.

This figure suggests an anticipated listing gain of approximately 8.7% over the upper end of the IPO price band. While GMP serves as an informal indicator, it frequently offers an early gauge of market sentiment regarding a company's potential performance on its listing day. Investors will undoubtedly be closely monitoring the developments over the coming days as the IPO progresses towards its closing date, keenly anticipating whether Epack Durable can sustain and build upon its initial retail-driven momentum.