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Salient features of the IPO:

* S.J.S. Enterprises Ltd. (SJS), a decorative aesthetics product company, is coming up with an IPO to raise Rs. 800cr, which opens on 1st Nov. and closes on 3rd Nov. 2021. The price band is Rs. 531 - 542 per share.

* The offer represents around 48.49% of its post issue paid-up equity shares of the company.

* The issue comprises of only OFS portion. Thus the company will not receive any proceeds from the issue.

* Promoter currently holds 98.86% stake in the company and post-IPO this will come down to 50.37%. Public holding will increase from current 1.14% to 49.63%.

Key competitive strengths:

* Leading aesthetics solution provider with an extensive suite of premium products in a growing industry

* Strong manufacturing capabilities supported by an established supply chain and delivery mechanism

* Strong innovation & product design and development capabilities

* Long-standing customer relationships

* Strong financial position and track record of financial performance

* Experienced and qualified management team

Risk and concerns:

* Continued slowdown in the global auto sector

* Revenue concentration risk

* Raw material cost pressure

* Difficulty in integrating new acquisition

* Business seasonality

* Competition

Below are the key highlights of the company:

* According to the Crisil, the domestic aesthetics products market was Rs. 1,990cr in FY21 and is projected to grow at 20% CAGR to reach at around Rs. 4,920cr by FY26. The global aesthetics product market is also expected to follow a similar trend. In FY21, the domestic demand of aesthetics was led by decals, stickers and aluminum badges (forming around 34-36% of demand), followed by chrome plated parts (23-25%), IMD/IML (12-14%) and appliques (9-11%). 

* 2Ws and PVs will continue to dominate the demand accounting for approximately 45-47% of the decorative aesthetic market each in FY26, whereas consumer durables will contribute approximately 8-9% to the overall demand. Demand for decorative aesthetics is expected to grow fastest in PVs at around 25% CAGR over FY21-26, followed by a 19% and 16% CAGR growth in consumer durables and 2Ws, respectively.

* Based on FY20 revenue, SJS was the third largest players in the Indian decorative aesthetics market. According to Crisil, the company is a “design-to-delivery” aesthetics solutions provider, offering widest range of products across decorative aesthetics pertaining to major vehicle segments such as 2Ws, PVs and consumer appliances. In addition, through its subsidiary the company also manufactures a wide range of aesthetics products catering to the requirements of the CVs, medical devices, farm equipment and sanitary ware industries.

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