Unveiling Rashi Peripherals: Navigating the ICT Distribution Landscape
Introduction to Rashi Peripherals: A Glimpse into the ICT Distribution World
In the dynamic realm of Information and Communication Technology (ICT) distribution, a new player is set to grace the IPO stage – Rashi Peripherals. Founded in 1989, this company has carved a niche for itself, operating in a vast network of 680 locations across India. As the IPO gears up to open tomorrow, let's delve into the intricacies of Rashi Peripherals' business model, aspirations, and financial outlook.
The IPO Unveiling: Crucial Details
The stage is set for Rashi Peripherals' IPO, scheduled to open on Friday, offering shares in the price band of ₹299 to ₹311. The IPO amounts to a substantial ₹600 crores, with the entire sum constituting a fresh issue. Notably, the upper price band sets the company's market cap at an intriguing juncture.
Exclusive Studio Conversation: Insights from the Top Brass
In an exclusive studio session, we are joined by two distinguished guests – Mr. Kapal Pansari, the Managing Director, and Mr. Rajesh Goenka, the CEO of Rashi Peripherals. Their combined experience and expertise promise a deep dive into the company's operations, financials, and future outlook.
Understanding the Business: A Dialogue with Mr. Pansari
Mr. Pansari elucidates Rashi Peripherals' role as a leading player in the IT industry, boasting a commendable Compound Annual Growth Rate (CAGR) of 23% over the past two decades. The company operates in two key departments: Lifestyle and IT Essentials, encompassing computer parts and accessories, and Personal Computing Enterprise and Cloud Solution, dealing with laptops, desktops, servers, and storage products.
Unraveling the Business Model: B2B Dynamics
Rashi Peripherals operates as a value-added distribution company, sourcing cutting-edge technology products globally and collaborating with 52 global technology brands. Mr. Pansari emphasizes the B2B nature of their operations, supplying to approximately 8,400 customers across 680 towns in India. The company's focus on maintaining zero bad debts, even with a credit-based model, underscores its robust financial management.
Inception and Growth: A 34-Year Legacy
The discussion takes an insightful turn as Mr. Pansari shares the company's origin story. Founded by Kishan Chaudhary and Suresh Pansari, both Chartered Accountants, the company commenced its journey by manufacturing printer ribbons and cartridges. Over the years, the company expanded its operations, opening branches with service centers and warehouses in 50 cities, fostering enduring relationships.
Financial Insights: Debt, Margins, and Future Plans
As the conversation pivots to financials, Mr. Goenka sheds light on the company's debt restructuring strategy. With a current debt of Rs. 1065 crores, the IPO aims to raise Rs. 600 crores, primarily to repay existing loans. The infusion of equity aims to bolster the working capital and reduce the debt-equity ratio.
Margin Dynamics and Cash Flow: Navigating Challenges
An intriguing aspect of the discussion revolves around operating margins, which experienced a temporary decline during the challenging times of 2021 and 2022 due to the global disruptions caused by COVID-19. Mr. Goenka explains the unique circumstances that led to margin fluctuations and assures that the company's standard margins have remained consistent over the years.
Growth Projections and Future Endeavors
Mr. Pansari outlines Rashi Peripherals' growth strategy, focusing on maintaining a CAGR akin to its historical performance. The company plans to introduce new verticals, products, and solutions every second or third year. Emphasizing the untapped potential in India's PC market, Mr. Pansari envisions sustained growth, supported by the company's expansive infrastructure and commitment to digitalization.
Financial Viability and Tax Liabilities
The conversation delves into the company's cash flow, which has shown negative trends in recent years. Mr. Goenka acknowledges the current situation and expresses the company's intent to work towards achieving positive cash flow within the next two to three years. Addressing tax liabilities, Mr. Goenka assures transparency, attributing the contingent liabilities to ongoing government investigations.
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Conclusion: A Journey into Rashi Peripherals' Future
As we conclude this in-depth studio interaction, Rashi Peripherals emerges as a formidable player in the ICT distribution sector, armed with a rich legacy, strategic vision, and a commitment to technological evolution. The impending IPO beckons investors to join the journey of a company poised for growth in India's dynamic IT landscape.
[Note: This analysis is for informational purposes only, and readers are advised to consult financial experts before making investment decisions.]