Lohia Corp Ltd IPO Overview
Lohia Corp Ltd IPO – The company filed DRHP with market regulator SEBI on September 29, 2022. Lohia Corp limited is coming up with only an Offer for Sale (OFS) of 31,695,000 Equity Shares. The face value of each equity share will be INR 1 per equity share. The promoter of the company Raj Kumar Lohia is selling up to 5,125,000 Equity Shares and Amit Kumar Lohia is selling up to 4,247,000 Equity Shares in the process as OFS. Other promoters such as Ajay Lohia, Gaurav Lohia, Ritu Lohia, and Neela Lohia are also selling some part of their stakes in the company.
Utilization of Net Proceeds from Lohia Corp Ltd IPO
Lohia Corp limited will not receive any amount from the offer for sale. The company will achieve the benefits of listing Equity Shares on the Stock Exchanges. This will enhance the visibility and brand image of the company, and provide liquidity to the Shareholders as well.
Lohia Corp Ltd IPO – Company Overview
The company was incorporated as ‘‘Lohia Starlinger Private Limited in Kanpur, India on October 5, 1981. The name again changed to “Lohia Corp Ltd IPO Limited” on March 7, 2013, and a certificate of change of name was issued by the RoC. The registered office is in Panki Industrial Estate, Kanpur 208 022, Uttar Pradesh, India.
- Lohia Corp Limited is one of the leading global manufacturers of machinery and equipment used in the production of technical textiles.
- The company market share is 17.5% across all Raffia machinery and over 28.7% for machines in machinery used in PP/ HDPE fabric making.
- Lohia Corp limited provides end-to-end manufacturing solutions for the Raffia industry with a market share of more than 80% in terms of value and volume in FY22.
- The company is also a leading manufacturer in India of spin-draw-wind machines that are used in upholstery, filter fabrics, liners, etc.
- Lohia Corp limited manufactures winders and rewinders for high-performance fibers.
- The company operates four machine manufacturing facilities, with three in India and one in the USA.
Lohia Corp Limited Products
Lohia Corp limited products can be categorized under different business verticals.
- The textile machinery business under Lohia Corp provides end-to-end solutions for Polypropylene (PP) and High-Density Polyethylene (HDPE) woven fabric machinery.
- Tape Stretching lines
- Tape winders
- Circular looms
- Extrusion coating lines
- Lohia Advanced Composites: the company designs and manufactures composite products for automotive, mobility, and other industrial applications.
- The company manufactures components used on both electric and fuel-based automotive platforms. Strong opportunities in the Electric vehicle segment.
- Manufactures composite products for engineering applications.
- Lohia Global Solution offers a one-stop solution for all spare parts needs and accessories for machinery operating in the Raffia Industry.
- Manufacturing threads that cater to applications such as automotive, home textile, apparel, leather and footwear, medical applications, etc.
- The company also manufactures engineering plastics for the automotive sector such as Engine & Beauty Covers, Radiator End Tanks, Case Air intakes, Ducts Assy., Door Flapper, etc.
Lohia Corp Limited – Company Founders and Leadership team
Raj Kumar Lohia is one of the Promoters, Chairman, and Managing Director of the group companies. He holds a bachelor’s degree in arts from Kanpur University, Kanpur, India. He has been with the company since its incorporation.
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Lohia Corp Limited Turnover
- The total income of the company has been growing over the years.
- Consistently generated positive cash flows from operating activities
- Strong order book which is growing from INR 4,369.30 million as of March 31, 2020, to INR 16,862.06 million as of March 31, 2022.
- Revenue from the operation is almost double in FY22 from FY21.
- Both EBITDA and PAT have been growing over the years.
- However, Net debt/ equity is quite high for the company which is a risk factor.
Lohia Corp Ltd IPO – Valuation Parameters
Lohia Corp Ltd IPO earns positive net cash flow from operating activities. The Net cash flow from operating activities has increased over the years mentioned. The ROE is ~30% in FY22 while ROCE is around 25% during the same time. Refer to the table below for more financial details.
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Lohia Corp Limited Turnover Details
| All amounts in INR Million (Year ended March 31) | 2020 | 2021 | 2022 |
|---|---|---|---|
| Revenue Operation | 10,845.65 | 13,337.86 | 22,374.80 |
| Total Income | 11,004.63 | 13,659.85 | 22,791.98 |
| Gross Margins | 43.26% | 40.60% | 32.26% |
| EBITDA | 871.24 | 1,947.42 | 2,349.01 |
| EBITDA Margin | 8.03% | 14.60% | 10.50% |
| Profit after tax | 389.31 | 1,207.84 | 1,593.77 |
| Earnings Per Share-Diluted | 3.48 | 10.91 | 13.97 |
| Net Cash from Operating Activities | 888.64 | 4,002.78 | 1,245.37 |
| Net Debt/Equity | 14% | -12.61% | 23.08% |
| Return on Equity Percentage | 7.40% | 22.33% | 30.34% |
| Return on Capital employed | 6.94% | 24.47% | 25.62% |
| Total Borrowings | 1,403.58 | 1,609.34 | 2,485.80 |
| Total Assets | 7,424.06 | 8,100.90 | 8,268.83 |
| Export contribution to Revenue | 45.08% | 31.10% | 24.51% |
Lohia Corp IPO Details: Do you invest?
- The government of India has announced PLI schemes for the textile industry that will support this company.
- The textile industry across the value chain is performing strongly domestically as well as globally.
- Strong order book with consistent financial performance.
- Expanded our business through a combination of organic growth and acquisitions, acquired the lamination/coating machines business for woven fabric from Sundarlam Industries in 2021.
- Consistently focusing on innovation-led research and development with increasing allocation for R&D (INR 337.39 million for FY22).
- However, the company has higher borrowing with net debt/ equity above 20% in FY22.
- The promoters of the company are selling their stake, with no plan for reducing debt. The increasing interest rate will have a significant effect on profitability and cash flows.
- The products of the company are good and need long experience to build and hence strong entry resistance. However, total borrowing / EBITDA is over 1 time in FY22.
- I will wait and watch till the price of each equity share is announced by the company.
Lohia Corp IPO Details
| Lohia Corp IPO Details | Details |
|---|---|
| Subscription Dates | Coming soon |
| Pricing band | Coming soon |
| Allotment date | Coming soon |
| Refunds Initiation date | Coming soon |
| Credit of Shares to Demat Account | Coming soon |
| Listing Date | Coming soon |
| Offer for Sale | 31,695,000 Equity Shares |
| Equity Shares outstanding prior to the Offer | 105,650,000 Equity Shares |
| Equity Shares outstanding after the Offer | 105,650,000 Equity Shares |
| Minimum bid (lot size) | Coming soon |
| Face Value | INR 1 per share |
| Listing on | BSE & NSE |
Lohia Corp Contact Details and Lead managers
| Contact Details | Lead Managers |
| Lohia Corp Ltd. Lohia Industrial Complex, Chaubepur, Kanpur 209 203, Uttar Pradesh, India Tel: +91 512-2593115; Contact Person: Shikha Srivastava, Company Secretary and Compliance Officer; Website: www.lohiagroup.com/lohia-corp; E-mail: cs@lohiagroup.com | 1. ICICI Securities 2. HSBC Securities and Capital Markets (India) Private Limited 3. IIFL Securities Limited 4. Motilal Oswal Investment Advisors Limited |
Lohia Corp IPO Allotment Status
Lohia Corp IPO allotment will be available on Link Intime’s website. To know your allotment status, get ready with your PAN number and click on this link.