Amkay Products Limited IPO, GMP, Review

Amkay Products Limited IPO Review: Amkay Products Limited’s IPO consisted of a fresh offering of 22,92,000 lakh shares valued at INR 12.61 crore. The corporation intends to invest in machinery, boost working capital, and achieve basic corporate objectives.

Amkay Products Limited IPO – Important Dates

Amkay Products IPO Date	April 30, 2024 to May 3, 2024
Amkay Products IPO Listing Date	May 8, 2024
Amkay Products IPO Price	INR 52-55 per share
Amkay Products IPO Lot Size	2000 shares
Amkay Products IPO Total Issue Size	INR 12.61 crores
Amkay Products IPO Basis of Allotment	May 6, 2024
Amkay Products IPO Initiation of Refunds	May 7, 2024
Amkay Products IPO Credit of Shares to Demat	May 7, 2024
Amkay Products IPO Issue Type	Book Built Issue IPO
Amkay Products IPO Listing At	BSE, SME

Amkay Products Limited IPO – Company Profile

Amkay Products Limited manufactures and distributes medical devices, disposables, and healthcare products across the country, including face masks, nebulizers, and branded items such as diapers and suction machines.

They began in 2008 in Mumbai with a single product and rapidly expanded to larger units. In 2012, they added a 20,000-square-foot manufacturing facility to their portfolio. They continued to grow and bought other units for expansion.

The company sells more than 30 medical products, including respiratory equipment, surgical disposables, and home healthcare supplies. Their 26,000-square-foot facility is ISO 9001:2015 certified, ensuring that manufacturing and testing operations run smoothly.

Amkay Products Limited IPO Financials

Amkay Products’ financial analysis shows a mixed result. Revenue originally climbed but then decreased. Profitability and equity improved, while RoNW declined, showing mixed performance despite prospective development.

Revenue Trend: The revenue dropped from ₹3,650.37 lakhs in March 2022 to ₹2,786.42 lakhs in March 2023. The revenue for the current year’s nine-month period ending December 2023 is INR2,274.62 lakhs, which falls short of the previous year’s benchmark.
Equity and Liabilities: Equity has consistently increased over time, indicating potential growth and expansion.
Profitability: The profit after tax (PAT) has increased from ₹146.71 lakhs in March 2022 to ₹215.34 lakhs in December 2023. This increase in profitability could boost investor confidence.
Earnings per Share (EPS): The diluted EPS increased from ₹2.31 in March 2022 to ₹3.38 in December 2023, indicating better earnings per share for investors.
Return on Net Worth (RoNW): The RoNW has fallen from 23.64% to 21.82%, suggesting a deterioration in the company’s capacity to create returns on shareholder equity.
Financial Position: Total assets have risen, indicating future business growth.

Amkay Products Limited IPO Fundamental Analysis

Particular	As of 31 March 2022	As of 31 March 2023	As of 31 December 2023
Revenue (₹ in lakhs)	3,650.37	2,786.42	2,274.62
Equity (₹ in lakhs)	620.60	771.62	986.96
Expenses (₹ in lakhs)	3,475.93	2,591.32	2,109.60
Profit and Loss After Tax (₹ in lakhs)	146.71	151.02	215.34
Diluted EPS (₹)	2.31	2.37	3.38
Return on Net Worth (%)	23.64	19.57	21.82
NAV per Equity Share (₹)	9.75	12.13	15.51
Total Assets (in lakhs)	1,580.64	1,563.77	1,887.52
Total Liabilities (in lakhs)	960.04	792.16	900.56

Amkay Products Limited IPO Peer Comparison

Amkay Products Limited provided many financial measures. Hemant Surgical Industries Limited experienced significant growth, whilst QMS Medical Allied Services Limited maintained solid profitability despite decreasing revenues.

Company	CMP (₹)	Face Value (₹)	P/E (₹)	EPS (₹)	RoNW (%)	Book value per share (₹)	Total Income (₹)
Amkay Products Limited	NA	10	NA	2.37	19.57	12.13	2,825.05
Hemant Surgical Industries Limited	149.95	10	14.59	10.28	32.42	30.73	1,1149.68
QMS Medical Allied Services Limited	103.45	10	26.53	3.90	9.06	39.44	1,0478.19

Amkay Products Limited IPO Objective

Amkay Products Limited’s primary goal is to carefully deploy funds for capital expenditures, particularly for the installation of additional machinery, while also ensuring adequate liquidity to fulfill working capital requirements, so promoting long-term growth and operating efficiency.

Funding Capital Expenditure towards the installation of additional machinery: The company intends to spend INR 50.20 lakhs on capital investment, specifically the installation of a Blood Lancet-Making Machine, in order to capitalize on rising demand and improve capacity and sales efficiency.
To Meet Working Capital Requirement: The business intends to use INR 800.00 lakhs from the net proceeds of the issuance to meet working capital requirements, primarily for trade receivables, inventories, and payments to trade payables, supplemented by borrowings as needed.
General Corporate Purpose: The balance funds will be used to achieve broad corporate goals such as operating expenses and development costs, developing business capabilities, and satisfying exigencies.

Amkay Products Limited IPO Risks and Challenges

Amkay Products Limited’s vulnerabilities include a high reliance on Maharashtra for sales and manufacturing, reliance on third-party manufacturers, and a lack of long-term contracts with suppliers, which impedes operations and growth.

They depend largely on Maharashtra for domestic sales and production. Geographical concentration creates dangers from local variables. Expansion may meet obstacles from local competitors, necessitating cautious planning.
They rely on third-party manufacturers for production, which presents problems like as compliance, supply chain disruptions, and the need for rigorous quality control and vendor selection to maintain smooth operations and product consistency.
They deal in a variety of medical equipment and disposables but do not have long-term commitments with any of their suppliers. Dependence on top suppliers increases the risk of delays or failure to satisfy demand, which is worsened by factors such as volatility in raw material availability and pricing.

Amkay Products Limited IPO – Industry & Market Potential

India’s healthcare sector, which includes hospitals and medical devices, has expanded fast, with both public and private components. Its competitive edge is based on well-trained experts and low costs, which drive medical tourism and R&D activity.

India’s medical devices business, which includes both huge international corporations and smaller firms, was valued at Rs. 90,000 crore in 2022 and is predicted to reach US$50 billion by 2030. Export data indicate significant development potential.

India intends to lessen its dependency on medical equipment imports through programs such as the NITI Aayog roadmap. It is expected to grow to a $50 billion market by 2025-26, with a focus on domestic manufacture and innovation.

Amkay Products Limited IPO Allotment Structure

Amkay Products would allocate 50% to Qualified Institutional Buyers (QIB), 35% to Non-Institutional Investors (NII), and 15% to Retail Individual Investors (RII), in accordance with SEBI requirements.

● Qualified Institutional Buyers (QIB): According to SEBI norms, 50% of the shares offered in the IPO would be reserved for Qualified Institutional Buyers. These include banks, mutual funds, and insurance businesses.

● Non-Institutional Investors (NII): 35% of the shares will be reserved for non-institutional investors. These often include corporate entities or individuals who invest more than Rs.2 lakhs.

● Retail Individual Investors (RII): The remaining 15% of the shares will be allocated to retail individual investors. These individual investors apply for shares worth less than Rs. 2 lakh.

Amkay Products Limited IPO GMP

IPO OPEN TO CLOSE DATE	IPO PRICE	LATEST GMP	ESTIMATED LISTING GAIN
30 April to 3 May 2024	55	25	80 (45.45%)

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Note: The information associated with the IPO is for educational purposes only. Consider with your financial advisor before investing in an IPO.