AKI India is engaged in the business of manufacturing and export of leather and leather goods. It is a Kanpur based company. At the end of the article, we will state AKI India IPO Review but before that let’s check the issue details of the company.
AKI India IPO Review Issue Details :
For AKI India IPO Review, the issue detail is important.
- IPO Opens on – September 28, 2018.
- IPO Closes on – October 03, 2018.
- Issue Type – Fixed Price Issue IPO.
- Face Value – Rs.10 per Equity Share.
- Issue Price – Rs. 11 Per Equity Share.
- Min Order Quantity – 10000 Shares.
- Market Lot – 10000 Shares.
- Issue Size – 2,800,000 Equity Shares of Rs. 10 aggregating up to Rs. 3.08 Cr.
- Listing Exchange At – BSE SME Exchange.
- Draft Prospectus – Download.
Objectives of the issue of the Company :
- To Meet working capital requirement of this company.
- The Expenses of Issue of AKI India Limited.
- To meet the general corporate purpose of this company.
About The Company –
- AKI India is incorporated in 1994.
- This company manufactures saddlery products, footwear as well as leather.
- AKI India is an ISO 9001:2008 certified company.
- This company operates through two business verticals, retail, and distribution.
- AKI India’s retail business operates through exclusive stores while the distribution vertical operates through multi-brand outlets.
- This company has 16 full-time employees and 27 contracted labors.
- AKI India Limited is a medium sized company with the expertise and agility to develop.
- This company delivers quality products based on customer requirements, lead times, engineering changes and schedule changes.
- AKI India Limited is outstanding customer service is the backbone of a successful company and their customers appreciate the knowledge, experience, and flexibility of their staff.
Products of AKI India :
Saddlery Division :
- Brow bands.
- Chaps and Gaitors.
- Driving Harness.
- Head Collars.
- Saddle Girth.
Footwear Division :
- Countryside Footwear.
- Slippers and Sandles.
- Casual Shoes.
Tannery Division :
- Bag Leather.
- Belt Leather.
- Footwear Leather.
- Harness Leather.
- Upholstry Leather.
Chemical Division :
- Leather Chemicals.
SWOT (Strength, Weakness, Opportunity, Threat) Analysis of the Company :
- The existence of productive capacity in the tanning of AKI India.
- One of the strength is the easy availability of the low cost of labor.
- The Management of this company with the business background.
- Another strength of this company is the comfortable availability of raw materials and other inputs.
- Cordial relations with customers of this company.
- The main weakness is the low level of labor productivity due to inadequate formal training / unskilled labor of this company.
- The highly unhygienic environment of AKI India.
- Another weakness is environmental problems.
- Changing preferences and trend of people towards leather products are the main opportunities of this company.
- The opportunity is abundant scope to supply finished leather to multinationals setting up shop in India which is getting this company.
- Product diversification of AKI India.
- One of the opportunity is the rising disposable income of middle-class families.
- The main threat is an entry of multinationals in the domestic market.
- Stiff competition from other countries of this company.
- Another threat of AKI India improving quality to adopt the stricter international standards.
- Fast changing fashion trends are difficult to adapt to the Indian leather industries of this company.
The promoter of AKI India :
- Mr. Asad Kamal Iraqi, aged 52 years, is the Promoter of this company.
- Mr. Anwar Kamal Iraqi, aged 52 years, is Production Head of the company.
The Board of Directors of this company :
- Mr. Osama Anwar Iraqi, aged 26 years, is one of the Whole Time Director of this company.
- Mrs. Samina Asad Iraqi, aged 40 years, is the Whole Time Director of this company.
- Mr. Aslam Saeed, aged 63 years, is Independent Director of this company.
- Mr. Javed Iqbal, aged 53 years, is Independent Director of this company.
- Mr. Rajkrishna Agarwal, aged 46 years, is Independent Director of this company.
Competitive Strengths of AKI India :
- Experienced Promoters supported by their professional and experienced management of AKI India Limited.
- The main strength of this company is a brand presence.
- Domain expertise and technical excellence of AKI India Limited.
- Cordial relationship with customers is one of the plus points of this company.
- Comfortable availability of raw materials and other inputs are the strengths of AKI India Limited.
Business Strategies for this company :
Enhancement of Brand Recognition :
AKI India Limited is not a well-established brand among large leather companies. This company will be making the necessary arrangements for their brand reorganization.
Expanding This company’s Clientele Network by Geographic expansion :
AKI India Limited growth in other states in the country can fetch us new business expansion and opportunities. This company presence is in the state of Uttar Pradesh. These companies intend to establish their presence in a few locations in the country. AKI India emphasis is on scaling up of their operations in other markets which will provide with attractive opportunities to grow their client base and revenues.
Continue to enter and expand their retail business in the domestic and international market :
This company believes there are significant opportunities for additional growth within their existing client base and to enter into the retail business. The fashion-oriented nature of the products of this company which are sold through their Promoter Group.
Company Financials :
AKI India IPO Review :
Let’s come to the main focal point of the article, AKI India IPO Review. The company has revealed both standalone as well as consolidated financial information regarding the profit-loss statement. The snapshots of restated standalone and consolidated profit-loss data are attached here. As per the data, the company’s profit growth level was not good in the previous years. Suddenly, we can see a huge rise in the profit in 2018. This is quite doubtful. Before concluding the judgment, let’s go through the DRHP (draft red herring prospectus)of the company. The company states basic and diluted (both standalone and consolidated) earnings per share are 0.77 and 0.54 respectively. Based on basic and diluted EPS, price to earnings ratio are 32.35 and 45.83 respectively. Return on Net Worth (RoNW) is 2.31 and 1.76 percent (Standalone and consolidated in 2016.17). Net Asset Value per Share is 7.66 in the financial year 2017. As you can see, the available data is not reason enough. Therefore, AKI India IPO Review is NEGATIVE. There is a caution about it. Investors should be aware, otherwise, invest at their own risk.
Categories: IPO Review