Labelkraft IPO subscription is opening on 13th March 2023. According to the prospectus, the IPO consists of a fresh issue of 864,000 shares of ₹10 aggregating up to ₹4.75 Cr. There is no offer for sales in the IPO issue. The Equity Shares have a face value of Rs 10 each. The retail allocation is 50% of the total size.
Labelkraft IPO – The Company Business Description
Labelkraft is engaged in the business of providing barcode code solutions, catering to many different segments of industries including FMCG, logistics service providers, chemicals, garments, etc.
The company supplies barcode printers, software, scanners, mobile computers, etc. Labelkraft is also engaged in the business of manufacturing the regular consumables required for the barcode printers such as barcode ribbons, self-adhesive barcodes, and product labels in roll and sheet forms.
- Supplies self-adhesive, tissue tapes, masking tapes, etc. to various industries across the country for their packaging needs.
- Engaged in supplying ID card printers, consumables, patient identification wristbands, automatic label applicator machines, satin, and taffeta rolls for garment companies, and self-adhesive tape products.
- Labelkraft has a long list of reputed clientele that includes companies like Wipro GE Healthcare Private Limited, Titan Company Limited, ITC Ltd, and Indian Oil Corporation.
- The company is also in the business of trading duty credit scrips required to pay customs duty by the importers.
- It is a well-known brand in India in the barcode market.
Labelkraft Founders and Leadership team
Mr. Ranjeet Kumar Solanki is the promoter and Managing Director of the company and proprietor of erstwhile M/s Solanki Enterprises. He has about 25 years of experience in the business related to equipment used in bar-code printing and scanning and duty scrips trading.
Labelkraft Revenue and Profit
The group firm M/s Solanki Enterprises has not performed well in terms of revenue over the last three years mentioned. The total revenue from the operation of the group company has declined from Rs. 8329.74 in FY 2020 to Rs. 5293.06 in FY 2022.
Labelkraft as a separate entity has published revenue for one year for the period ending November 30, 2022, where the total revenue was Rs. 68.68 lakhs. The profit after tax for the period ending November 30, 2022, as per Restated Financial Statements was Rs. 4.09 Lakhs.
Labelkraft IPO Review : Financial Snapshot
| All amounts in INR Lakhs (Year ended November 30) | November 30 , 2022 |
| Revenue Operation | 67.94 |
| Total Income | 68.68 |
| Profit After Tax | 4.09 |
| Earnings Per equity Share-Diluted | 0.17 |
| Net Cash from Operating Activities | (334.53) |
| Debt/Equity Ratio | 7.37 |
| RoE % | 0.45 |
| ROCE (%) | 0.07 |
Objective Behind the Labelkraft IPO
- Out of the net proceeds of this IPO, the company is planning to spend INR 180.69 lakhs to fund Capital Expenditure towards the installation of additional plant and machinery.
- The company would utilize the rest of the net proceeds to meet the Working Capital Requirements and general corporate purpose.
Labelkraft IPO Review: Do you invest?
- Labelkraft parent company has not been performing well financially over the last three years.
- Labelkraft has not shared complete financial data in the RHP document to have a historical comparison.
- The company is in the business of barcodes which has a low entry barrier and high competition. The profit margin of the business is relatively low.
- Higher interest rate is slowing down global economic growth is forecast over 2023 and 2024. That will reduce all economic activities including the growth of the travel industry, FMCG industry, etc. where we need a barcode.
- According to a market report, the global Barcode Printer market is expected to reach USD 2800 million by the end of 2026, growing at a CAGR of 3.5 percent during 2021-2026.
- Hence, a slowdown in the global economy is bound to affect the business of this company.
- Looking at the financials and factors mentioned above, I would prefer to avoid this SME IPO as a retail investor.
Labelkraft IPO Details
| Labelkraft IPO Details | Labelkraft IPO Date, Price and other details |
| Labelkraft IPO Date | Mar 13, 2023 to Mar 15, 2023 |
| IPO Price | ₹55 per share |
| IPO Allotment date | Mar 20, 2023 |
| Refunds Initiation date | Mar 21, 2023 |
| Credit of Shares to Demat Account | Mar 22, 2023 |
| IPO Listing Date | Mar 23, 2023 |
| Offer for Sale | Nil |
| IPO Issue Size (Fresh Issue) | 864,000 shares of ₹10 (aggregating up to ₹4.75 Cr) |
| Minimum bid (lot size) For retail investor | 1 lot of 2000 shares Investment of ₹110,000 |
| Maximum bid (lot size) For retail investor | 1 lot of 2000 shares Investment of ₹110,000 |
| Retail Shares Offered | Not less than 50% of the Net Offer |
| Minimum bid (lot size) HNI investor | 2 lot of 2000 shares (4000) Investment of ₹220,000 |
| NII (HNI) Shares Offered | Not less than 50% of the Net Offer |
| Face Value | INR 10 per share |
| Listing on | BSE SME |
| Promoters | Mr. Ranjeet Kumar Solanki is the promoter |
Labelkraft IPO: Lead Managers and Contact
| Contact Details | Global Surfaces IPO Lead Managers |
| Labelkraft Technologies Limited 14/12, Jayachamarajendra Road, Bengaluru – 560002 Phone: +91 080-40927665 Email: cs@labelkraft.com Website: http://www.labelkraft.com/ | 1. HEM SECURITIES LIMITED |
Labelkraft IPO Allotment Status
Labelkraft IPO Allotment status will be available on BIGSHARE SERVICES PRIVATE LIMITED. To know your allotment status, get ready with your PAN number and click on this link. You may also reach out to Phone: +91-22-6263 8200, Email: ipo@bigshareonline.com
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