Exxaro Tiles Limited

Incorporated in 2008, Exxaro Tiles Limited engaged in manufacturing and marketing of vitrified tiles used majorly for flooring solutions.The company commenced business as a partnership firm in 2007-08 as a manufacturer of frit, which is one of the raw materials used in manufacturing of tiles and has over the years, diversified, expanded and evolved into a manufacturer for vitrified tiles. Their business operations are broadly divided into two product categories: (i) Double charge vitrified tiles and (ii) Glazed Vitrified tiles. As on date, the company supply products mainly in 6 sizes. They have 1000+ designs in its product basket, which are marketed under the brand 'Exxaro'. The company believes that its well-known brand series include Topaz Series, Galaxy Series, High Gloss Series, etc. The company believes that some of the key product development highlights include:  3D Effect in Double Charge Vitrified Tiles, Replica of Natural Stones in Double Charge Vitrified Tiles and High transparent glaze in weight method for glazed vitrified tiles. Further company also supply wall tiles to certain of its dealers wherein they get the products manufactured on outsourced basis. Company's integrated model has allowed it to develop insights across the entire value chain right from product design, process development, manufacturing to marketing. The company is distinguished by its large dealer network with whom the they have developed long term relationships over the years. As on RHP date, the company has more than 2,000 registered dealers. The company also supply products for large infrastructure related projects. Over its operating history of more than a decade, they have supplied the products for various projects including residential, commercial, educational institutions, hotels, hospitals, government, religious institutions, builders/developers, etc. As per financial performance, Exxaro has posted total income/net profits (loss) of Rs. 221.25 cr. / Rs. 9.14 cr. (FY18), Rs. 244 cr. / Rs. 8.97 cr. (FY19), Rs. 243.96 Cr. / Rs. 11.28 Cr. (FY20) and Rs. 259.85 Cr. / Rs. 15.29 Cr. (FY21). So company has posted average results over the years. In FY21, due to pandemic sales decreased as there was lock down in most of the Indian cities. Company has posted an average EPS of Rs. 3.83 and average RoNW of 10.73% for last three fiscals. Issue is priced at a P/BV of 3.14 as per NAV of 38.2 on 31.03.21. As per FY21 earnings, on fully diluted equity post issue, IPO is priced at P/E of around 35, which looks fully priced. As size of issue is below Rs 250/- Cr, so this IPO will list in T-Group. As per RHP, comparison between listed peers is shown in above table. On BRLM's front, Pantomath Capital Advisors Private Limited has handled around 29 SME IPOs in last three fiscals. From last 10 IPOs, 2 are opened below issue price and remaining are opened above issue on the day of listing. As of now, 8 are trading below and other are trading above issue price. ( As on 30.07.21) As per financials, company has shown average results, RoNW is 11.88% and P/E is around 35, which is fully priced. In current pandemic situation, due to lockdown sales of company declined. If situation normalises, then Real Estate related sectors expected to do well. Performance of BRLM is bad. So, we are giving NEUTRAL rating to this IPO and aggressive investors may apply for very limited listing gains.

• 1 Mr. Mukeshkumar Patel
• 2 Mr. Kirankumar Patel
• 3 Mr. Dineshbhai Patel
• 4 Mr. Rameshbhai Patel