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• Srigee DLM is coming out with an initial public offering (IPO) of 17,14,800 equity shares in a price band Rs 94-99 per equity share.
• The issue will open on May 5, 2025 and will close on May 7, 2025.
• The shares will be listed on SME Platform of BSE.
• The face value of the share is Rs 10 and is priced 9.40 times of its face value on the lower side and 9.99 times on the higher side.
• Book running lead manager to the issue is GYR Capital Advisors.
• Compliance Officer for the issue is Shuchi.

Profile of the company

With end-to-end plastic manufacturing capabilities, Srigee DLM focuses on design-driven production to enhance both functionality and manufacturability. Its capabilities cover the full range of plastic production, serving OEM and ODM clients with services such as material selection, extrusion, mould making, precision injection moulding, and final assembly. For OEMs, the company specializes in converting plastic prototypes - such as those used in consumer electronics and automotive parts - into high-quality, production-ready components. For ODMs, it works closely from concept through to the finished product, ensuring smooth integration of design and manufacturing processes.

Its emphasis on design-led manufacturing is central to its service offerings, particularly for leading home appliance brands in the white goods sector, electrical components, and automotive applications. Building on a foundation in plastic injection moulding, the company has expanded its capabilities to include in-house die design and testing, polymer compounding, and assembly, offering a fully integrated solution under one roof.

The company classifies its business segments into four: Plastic Injection Moulding & Assembly; Tool Room & Die Manufacturing; Job Work- Moulding; and Polymer Compounding & Trading. This integrated approach enables it to facilitate swift and cost-effective mold designing and testing, conferring a distinct competitive advantage over other OEM/ODM entities. It caters to Indian companies and MNC’s in the home appliances, mobile manufacturing, and automotive components industries. 

Proceed is being used for:

• Meeting capital expenditure requirements (i) To set up a manufacturing facility at Plot No. 15, Ecotech - X, Industrial Area, Greater Noida, Gautam Budh Nagar, Uttar Pradesh; (ii) Acquisition of machineries to be installed at proposed manufacturing facility 
• Meeting general corporate purposes
• Meeting issue expenses

Industry Overview

The Indian Consumer Electronics and Appliances (CEA) market has been witnessing sustained double digit growth rate in the past few years. Increasing product awareness, affordable pricing, innovative products and the high disposable incomes have aided in the strong growth in the CEA market in India. Rapidly shrinking replacement cycle for consumer durables is observed as sustaining demand in urban India. The existing low penetration rates and the increasing usage of consumer durables have catapulted rural India to the high demand (30% annual growth) generating segment. The market share in the consumer durables industry is moving from the unorganized to the organized sector. According to estimates, 30% of the total market is still unorganized, which provides listed Indian players with a significant opportunity to further increase their market share going forward.

Artificial intelligence and manufacturing automation will be important future trends as consumer awareness increases regarding technology advancements and their applications across multiple sectors. To increase production efficiency of various consumer durables, Industry 4.0 will stimulate investments in R&D, technology infrastructure, and manufacturing processes. The government anticipates that the Indian electronics manufacturing sector will reach $ 300 billion by 2024–25. By FY22, television industry in India is estimated to reach Rs 1,227.34 billion ($17.56 billion). India’s TV production stood at $4.24 billion in FY21, and is expected to reach $10.22 billion by FY26, at a CAGR of 20%.

Indian appliances and consumer electronics industry stood at $9.84 billion in 2021 and is expected to more than double to reach Rs. 1.48 lakh crore ($21.18 billion) by 2025. Electronics hardware production in the country stood at $63.39 billion in 2021. In FY21, the television production in India stood at $4.24 billion. The total active DTH subscriber base stood at 67.04 million in June 2022.As of 2021, the refrigerator, washing machines and air conditioner market in India were estimated at around $3.82 billion, $8.43 billion and $3.84 billion, respectively. The market size of air conditioners is expected to grow to 165 lakh units by 2025 from 65 lakh units in 2019, while refrigerators’ market size is expected to grow to 275 lakh units by 2025 from 145 lakh units in 2019. Further, India's Consumer Electronics and Appliances Industry is predicted to be the fifth largest in the world by FY25. The Indian Appliances and Consumer Electronics (ACE) market is predicted to nearly double in the next 3 years, reaching approximately $ 7.93 billion (Rs 1.48 lakh crore) by 2025. 

Pros and strengths

Strong relationships with established customer base, with potential to expand its customer base: The company is committed to solidifying and enhancing its enduring relationships with renowned customers across various product verticals. It considers these customers as strategic partners and are dedicated to providing them with high-quality end-to-end product solutions. Its clientele comprises esteemed, long-term players in the industry, and its collaborative associations with them have been instrumental in the continuous development, diversification, and improvement of its product portfolio. This strategic alliance enables it to proactively plan production in anticipation of retail demand and maintain an unwavering focus on product quality.

End-to-end solutions provider with a dedicated design and development team: Since its inception, the company has not only expanded its product portfolio but has also diversified its customer base. This journey has sharpened its technological expertise in the intricate field of designing and manufacturing plastic injection molding. At the heart of the company's philosophy is the belief that the integration of design, manufacturing, and a robust service infrastructure is the key to unlocking customer satisfaction. This approach not only cultivates unwavering customer loyalty but also lays the groundwork for enduring relationships.

Flexible and cost-effective manufacturing capabilities: With a proven track record in meeting the diverse product requirements of its customers, it is committed to continually enhancing the efficiency of its manufacturing processes in terms of cost, time, quality, and scale. Its manufacturing facilities maintain flexibility through measures such as multifunctional training and equipment standardization. The scale of its operations, coupled with extensive manufacturing experience, an in-house tool room, timely raw material sourcing, and access to skilled and unskilled manpower, enables it to provide cost-effective solutions to its customers while safeguarding its margins.

Risks and concerns  

Substantial portion of revenues comes from limited customers: The company is dependent on certain customers who have contributed to a substantial portion of its total revenues. In the aggregate, its top ten customers accounted for 93.00%, 88.40%, 94.43% and 87.07% of its revenue from operations for the nine month period ended December 31, 2024 and for the financial years ended March 31, 2024, 2023 and 2022, respectively. There is no guarantee that it will retain the business of its existing key customers or maintain the current level of business with each of these customers. Reliance on a limited number of customers for its business may generally involve several risks. These risks may include, but are not limited to, reduction, delay or cancellation of orders from its significant customers; failure to renegotiate favourable terms with its key customers; the loss of these customers; all of which would have a material adverse effect on the business, financial condition, results of operations and future prospects of the company.

Geographical constrain: A significant percentage of its revenue is generated from operations in the state of Uttar Pradesh. Any adverse developments in this region, including but not limited to economic slowdowns, changes in government policies, labour disruptions, infrastructure challenges, or natural disasters, could negatively impact its ability to conduct business effectively. If it experiences prolonged disruptions or difficulties in these operations, it could materially and adversely affect its financial performance and future growth prospects.

Dependent on few suppliers for purchases of products: The company’s top ten suppliers contribute 43.67%, 38.66%, 47.82% and 46.14% of its revenue from operations for the nine month period ended December 31, 2024 and for the financial year ended on March 31, 2024, 2023, and 2022, respectively based on restated financial statements. It cannot assure that it will be able to get the same quantum and quality of supplies, or any supplies at all, and the loss of supplies from one or more of them may adversely affect its purchases of stock and ultimately its revenue and results of operations.

Outlook

Srigee DLM is engaged in design-led manufacturing and assembly services, specializing in plastic injection moulding, tool room & die manufacturing, mobile phone sub-assembly, and polymer compounding & trading. The company is expanding its footprint with a new facility at Ecotech-10, Greater Noida, focused on electronics, electrical assembly, and advanced plastic moulding. On the concern side, the company is highly dependent on certain key customers for a substantial portion of its revenues. Loss of relationship with any of these customers may have a material adverse effect on its profitability and results of operations. Moreover, significant revenue is generated from operations in Uttar Pradesh. Any disruption in these operations, whether due to regulatory changes, economic conditions, or unforeseen events, could significantly impact its financial performance and future prospects.

The company is coming out with a maiden IPO of 17,14,800 equity shares of Rs 10 each. The issue has been offered in a price band of Rs 94-99 per equity share. The aggregate size of the offer is around Rs 16.12 crore to Rs 16.98 crore based on lower and upper price band respectively. On performance front, the revenue from operations of the company for fiscal year 2024 was Rs 5,442.73 lakh against Rs 4,714.48 lakh for Fiscal year 2023. An increase of 15.45% in revenue from operations. This increase was due increase volume of sale of goods from its home appliance manufacturing activities. Moreover, profit after tax for the Fiscal year 2024 was at Rs 309.54 lakh against profit after tax of Rs 281.17 lakh in fiscal year 2023. An increase of 10.09%. This increase registered primarily due to decrease in other expenses, finance cost and employee benefit expenses.

Currently, the company’s manufacturing portfolio encompasses the production of Plastic Injection Moulding components and the assembly of plastic-molded components, catering to major home appliances, automotive component manufacturers, and cellular phones. The company’s strategic roadmap involves a continued expansion of offerings within its existing product verticals. It aims to tap into segments that, according to its management, exhibit attractive growth prospects and higher return ratios, leveraging its distinctive competence and presenting compelling value propositions.