Amkay Products Private Limited IPO 

Amkay Products Private Limited IPO

OVERVIEW OF THE INDUSTRY:  The medical devices sector in India comprises large multinationals, small and midsized companies. The size of the Indian medical devices market is estimated at Rs. 90,000 Crore (US$ 11 billion) in 2022 and is expected to grow to US$ 50 billion by 2030 with a CAGR of 16.4 %. The Indian medical device market share in the global market is estimated to be 1.65%. India is the 4th largest Asian medical devices market after Japan, China, and South Korea, and among the top 20 medical devices markets globally. 

Amkay Products Private Limited IPO Background:

Our Company was originally incorporated as “Amkay Products Private Limited” on October 25, 2007 Kashyap Pravin Mody and Pravinchandra Vrajlal Mody were the initial subscribers to the Memorandum of Association of our Company.

OUR BUSINESS STRATEGY Amkay Products Private Limited:

• Continue to improve quality standards  
• Global and geographical presence.  
• Enhancing branding, promotional and digital activities  
• Continue to strive for cost efficiency & invest in capital expenditure  

Key Points:

• Top alcohol swab manufacturers supply to many MNCs and Indian pharma companies.
• Largest manufacturer of Blood Lancet Needles – Steel/Plastic in India.
• Leading manufacturer of Surgical Masks, N95 Masks, Gown and many more products
• 500+ PRODUCT USED EVERY MINUTE
• 100+ TEAM STRENGTH
• 50+PRODUCT SKU’S
• 1000+DEALERS NETWORK

Products of Amkay Products Private Limited:

• We manufacture, assemble & market a comprehensive portfolio of medical devices, disposables and other Healthcare Products like Face Mask, Alcohol Swabs, Lancet Needles, Nebulizer, Pulse Oximeter, surgeon cap etc. used by healthcare centers, hospitals/clinics, nursing homes etc. widely spread across India. In addition, we are also engaged in branding and marketing of some of the products like Diapers, Plastic Gloves, Suction Machines etc. 
• Our product portfolio comprises of wide array of healthcare products and medical devices, manufactured and marketed by our company, as follows:
  • Surgical Disposables
  • Home Healthcare Products  Respiratory Disease Related Medical Devices.
  • Medical Device
  • Medical Disposables
  • Home Care
  • Kits
  • Surgical
  • Diaper

CATEGORY-WISE REVENUE BREAKUP

PARTICULARS	Period Ending Dec-23	% to Total Sales	FY 2022- 23	% to Total Sales	FY 2021- 22	% to Total Sales	FY 2020- 21	% to Total Sales
Plastic Lancet	365.36	16.06	284.19	10.20	221.30	6.06	140.55	3.45
Rubber Gloves	171.44	7.54	41.04	1.47	72.74	1.99	17.90	0.44
Face Mask	146.52	6.44	324.94	11.66	1,171.22	32.09	1,271.22	31.23
Alcohol SWAB	121.76	5.35	213.40	7.66	193.19	5.29	146.11	3.59
Nebulizer	120.94	5.32	134.70	4.83	140.02	3.84	53.87	1.32
Steel Lancet	119.53	5.25	115.41	4.14	106.77	2.92	78.88	1.94 Paramount Forge: A Risky Bet in a Volatile Market
Cap_Group (Surgeon_Bouffant)	117.39	5.16	145.60	5.23	202.98	5.56	557.20	13.69
Diaper	99.09	4.36	99.14	3.56	73.29	2.01	87.72	2.16
Amkay Hot Bag	86.27	3.79	62.02	2.23	44.76	1.23	26.67	0.66
Amkay Air Bed	72.78	3.20	114.34	4.10	72.03	1.97	18.26	0.45
Other	853.53	37.52	1,251.65	44.92	1,352.07	37.04	1,671.57	41.07
Total	2,274.62	100.00	2,786.42	100.00	3,650.37	100.00	4,069.95	100.00

Our revenue from top ten geographies in India in last three years is as follows

Name of State	For the period and financial year ended on
	Dec 31, 2023	% to Total Sales	FY 2022-23	% to Total Sales	FY 2021-22	% to Total Sales	FY 2020-21	% to Total Sales
Maharashtra	569.53	25.04	1,048.63	37.63	1,281.17	35.10	2,235.89	54.94
Gujarat	277.44	12.20	200.96	7.21	223.37	6.12	141.13	3.47
Meghalaya	140.63	6.18	1.45	0.05	1.73	0.05	1.26	0.03
Assam	130.44	5.73	84.59	3.04	180.59	4.95	130.61	3.21
Karnataka	91.77	4.03	141.28	5.07	194.51	5.33	162.00	3.98 Pelatro IPO: Is the Aggressive Hype Over?
Odisha	90.18	3.96	72.13	2.59	80.12	2.19	33.40	0.82
Delhi	85.65	3.77	91.70	3.29	118.38	3.24	103.38	2.54
Rajasthan	83.96	3.69	123.33	4.43	184.16	5.04	163.19	4.01
Kerala	78.74	3.46	120.44	4.32	154.98	4.25	92.79	2.28
Tamil Nadu	77.84	3.42	108.03	3.88	144.75	3.97	121.10	2.98
Total	1,626.18	71.49	1,992.54	71.51	2,563.76	70.23	3,184.74	78.25

Manufacturing Factories of Amkay Products Private Limited:

• Manufacturing Unit-I: Amkay House, Plot No. 27, Achhad Industrial Estate, Village-Achhad, Taluka- Talasari, Dist. Palghar, Thane- 401606, Maharashtra, India.
• Manufacturing Unit-II: Plot No. 39, Achhad Industrial Estate, Village-Achhad, Taluka- Talasari, Dist. Palghar, Thane- 401606, Maharashtra, India. 
• Warehouse Plot No. 57, Achhad Industrial Estate, Village-Achhad, Taluka -Talasari, Dist. Palghar. Thane- 401606, Maharashtra, India.  

PRODUCTION AND INSTALLED CAPACITY

(Numbers in hundred)

Product	Installed Capacity	Unit	FY 2020-21		FY 2021-22		FY 2022-23		December 31, 2023
			Actual Production	%	Actual Production	%	Actual Production	%	Actual Production	%
Face Mask	450,000	Pcs	420,456	93.43%	438,773	97.51%	314,180	69.82%	146,566	32.57%
Swab	750,000	Pcs	417,000	55.60%	551,000	73.47%	609,000	81.20%	136,045	18.14%
Surgeon Cap	240,000	Pcs	197,798	82.42%	140,531	58.55%	101,960	42.48%	57,292	23.87%
Bouffant Cap	300,000	Pcs	84,771	28.26%	60,227	20.08%	43,697	14.57%	63,143	21.05%
Non-woven Shoe Cover/PE Shoe Cover Deccan Transcon Leasing IPO: Is This IPO a Alienated Dud?	150,000	Pairs	50,256	33.50%	51,809	35.54%	28,985	19.32%	14,141	9.43%
Urine Bag	6,600	Pcs	245	3.72%	1,070	16.21%	2,055	31.13%	5,208	78.90%
Apron, Bedsheet, Bio Bag	150,000	Pcs	18,002	12.00%	15,355	10.24%	23,885	15.92%	81,280	54.19%
N 95 Mask	24,000	Pcs	20,000	83.33%	18,000	75.00%	6,000	25.00%	550	2.29%
Injection Moulding Machine Set	15,000	Pcs	2,000	13.33%	5,930	39.53%	5,460	36.40%	5,434	36.22%

 KEY MARKET TRENDS: 

• The era of hyper-globalisation in global manufacturing.
• Recent events in the Red Sea may have brought back concerns over reliance on global supply chains, further aggravating the slower growth in global trade in 2023. In other words, exporting one’s way to growth will not be easy. This reinforces the need to lower logistics costs and invest in product quality to hold on to and expand market share in areas where India has an advantage.
• Third and arguably the most important is the energy transition challenge
• The Indian economy is better placed than ever to take on these three key challenges because of the policies adopted and implemented in the last decade. The Union government has built infrastructure at a historically unprecedented rate, and it has taken the overall public sector capital investment from ₹5.6 lakh crore in FY15 to ₹18.6 lakh crore in FY24, as per budget Amkay Products Limited 90 estimates. That is a rise of 3.3X. Whether the total length of highways, freight corridors, number of airports, metro rail networks or the trans-sea link, the ramp-up of physical and digital infrastructure in the last ten years is real, tangible and transformative.

COMPETITION:

We face competition from organized and unorganized players in the healthcare industry which have a presence across multiple regions in India. There are various companies offering products and services similar to us. We believe the principal elements of competition in our industry are price, durability, product quality, timely delivery and reliability and most importantly our pace in keeping up with the changing technology in the industry. To stay competitive, we regularly update our existing facilities/technology and adopt new technology for our manufacturing facilities. We aim to keep our costs of production low to maintain our competitive advantage and our profit margins. While there are companies which manufacture similar products that we sell, some of the listed peers included include Hemant Surgical Industries Ltd., QMS Medical Allied Services Limited etc

INFRASTRUCTURE & UTILITIES:

• Raw Materials:
  • Major Raw Materials which we require for manufacturing of our products includes Al 400mm Paper Roll Swab, Non-Woven Rolls, Plastic Granules, LD Plastic Rolls, PVC Roll, Stainless Steel Coil etc. We procure raw materials from the suppliers based in domestic & international market. For the FY 2022-23, our total domestic purchase was Rs. 1707.63 Lakhs & total import purchase was Rs. 136.07 Lakhs.
• Power: The requirement of power for our operations, at our registered office in Vasai, manufacturing unit I & II at Acchad Industrial Area and Warehouse at Acchad Industrial Area is met through Maharashtra State Electricity Distribution Co. Ltd.
• Water: Our water requirement is fulfilled through Bore well in both the manufacturing units and through local sources in registered office & Warehouse.

Strength:

• Strong portfolio and diverse range of products across consumer preferences.  
• Extensive network of dealers covering major parts of India  
• Quality Assurance ensuring standardized product quality  
• Diversified revenue from multiple geographies  
• Experienced Promoter with senior management team having successful track record & industry knowledge  

Key Financial Performance

(₹ In Lakhs except percentages and ratios)

*not annualized.

CAPITALISATION STATEMENT

(Amount in Rs. Lakhs)

Particulars	Pre-Issue
Debt
Short Term Debt	350.81
Long Term Debt	125.41
Total Debt	476.22
Shareholders’ Fund (Equity) Osel Devices: A Blinded Cautionary Tale for IPO Investors
Equity Share Capital	636.36
Reserves & Surplus	350.59
Total Shareholders’ Fund (Equity)	986.96
Long Term Debt/Equity	0.13
Total Debt/Equity	0.48

Amkay Products Private Limited: IPO Details:

• Issue Type: Fresh Issue , INR 12.61 Crores

• Price Band: ₹52 – ₹55 per Share

• IPO Dates: Open April 30, 2024 – Closes May 3, 2024

• Listing: BSE SME

The company aims to use the funds raised for the following purposes:

• Funding Capital Expenditure: This likely refers to acquiring new machinery or equipment to expand their production capacity.
• Meeting Working Capital Requirements: Working capital refers to the funds needed for day-to-day operations. An IPO can help Amkay build up their cash reserves to cover ongoing expenses like raw materials, salaries, and other operational costs.
• General Corporate Purposes: This is a broader category and could include things like research and development, marketing initiatives, or potential acquisitions.

Risks and Considerations of Amkay Products Private Limited:

• Materiality The Risk factors have been determined on the basis of their materiality. The following factors have been considered for determining the materiality. 
  • Some events may not be material individually but may be found material collectively.
  • Some events may have material impact qualitatively instead of quantitatively.
  • Some events may not be material at present but may be having material impact in future.

INTERNAL RISK FACTORS:

• We generate our major portion of revenue from certain geographical regions and any adverse developments affecting our operations in these regions could have an adverse impact on our revenue and results of operations.
  • We generate major domestic sales from the State of Maharashtra. For the period and financial year ended December 31, 2023, March 31, 2023, March 31, 2022 and March 31, 2021, we derived major portion of our revenue from the state of Maharashtra i.e. 25.04%, 37.63%, 35.09% and 54.94% respectively.
• We depend on third parties to manufacture some of our products. If these organizations are unable or unwilling to manufacture our products, or if these organizations fail to comply with other applicable regulations or otherwise fail to meet our requirements, will adversely affect our business.
  • If these entities decline production, fail to comply with regulations, or miss our standards, our business is at risk. This highlights the importance of meticulous third-party selection, stringent quality control, and consistent communication. Generally, we do not have long-term contracts with our vendors committing them to supply products to us. If our vendors are unable to manufacture our products in sufficient quantities and on a consistent basis, or if it becomes unwilling to produce that product for us, we may not be able to supply our customers in a timely manne
• We face risk relating to sourcing of raw materials and components for manufacturing and assembly of our medical devices and disposables from third parties. Any disruption in the supply of the raw materials or fluctuations in their prices could have a material adverse effect on our business operations and financial conditions
  • Substantial portion of our revenues has been dependent upon few customers, with which we do not have any firm commitments. Loss of our key customers or significant reduction in demand from, our significant customers may materially and adversely affect our business and financial performance.
  • Our key customers majorly include (i) Dealers; (ii) hospitals and nursing homes and (iii) healthcare centres. Our top 10 customers accounted for approximately 28.84%, 20.73%, 20.31% and 37.39% of our revenue from operations in period ending December 31, 2023 and Fiscals 2023, 2022 and 2021 respectively, out of which top single customer accounted for 7.22%, 5.18%, 4.50% & 24.98% of our revenue from operations in the said respective period.

LITIGATIONS:

• Criminal proceedings filed by the Company
  • a) A case has been filed by the State of Maharashtra (“Petitioner”) against Chirayush Navinbhai Patel & Others. (“Respondents”) being no. Regular Criminal Case 75 of 2021 before Hon’ble Civil Court Junior Division, Dahanu (“Hon’ble Court”). The case originates from an occurrence in which the Respondent was caught red-handed while attempting to steal boxes of hand gloves and masks amounting to Rs. 2.94 lakhs from the manufacturing unit of the Company (which is the manufacturer of these products). In response, the Company’s officials lodged a First Information Report (FIR) against the Respondents on January 14, 2021. Subsequently, the police took cognizance of the matter and filed the case before the Hon’ble Court. The matter is pending adjudication, next date of hearing April 23, 2024.
• Other pending material litigations against the Company 
  • A suit has been filed by Medtech Life Private Limited (“Plaintiff”) against our Company (“Defendant”) bearing COIMP 16 of 2011 before Ordinary Original Civil Jurisdiction at the Hon’ble High Court of Judicature at Bombay (“Hon’ble Court”) for allegedly manufacturing and selling of ‘Double hole needle syringe destroyer’ with buzz indicator. The Plaintiff states that they hold patent of single hole needle burner and syringe destroyer and therefore states that Defendant has infringed the Plaintiff’s right. But as per Defendant the owner of the Patent of single hole needle is some other person and is not related to Amkay Products Limited 194 the Plaintiff. Our Company has also filed a Counter Claim no. 6 of 2013 against the Plaintiffs. Both cases are pending adjudication before the Hon’ble Court
  • A case has been filed by Sandeep & Co. (“Plaintiff”) against our Company & others (“Defendants”) bearing R.A.E. Suit No.1478 of 2018 before the Court of Small Causes at Mumbai (“Hon’ble Court”). The case pertains to property suit wherein it is prayed for vacation of the suit property by the Defendants. The Plaintiff has made the Defendant No. 2 (our Company) a party and have alleged that the Defendant No. 1 sublet the suit property to the Defendant No. 2. The Plaintiff has prayed to the Court to determine the quantum of Mesne Property in terms of the provisions of Code of Civil Procedure and further prayed for appointment of Court Receiver qua the subject property. The matter is pending adjudication before the Hon’ble Court. The next date of hearing is May 07, 2024.
• Other pending material litigations filed by the Company
  • Our Company (hereinafter referred to as ‘Petitioner’) has filed a writ petition before S.B. Civil Writ Petition No. 6012/2020 against State of Rajasthan & Others (hereinafter referred to as ‘Respondents’) before the Hon’ble High Court of Judicature, Jaipur (“Hon’ble Court”). The writ was filed against the impugned order dated May 20, 2020 issued in favor of the Respondents. As per the impugned order passed by Rajasthan Medical Services Corporation Limited, it was stated that the Petitioner i.e. our Company is blacklisted for one-year from engaging in the tender process for face masks and other medical equipment, along with a penalty of Rs. 13.88 lakhs. Hence, our Company came before this Hon’ble court by way of a writ petition challenging the impugned order passed by Rajasthan Medical Services Corporation Limited. The case is pending adjudication before the Hon’ble Court. The next date of hearing is July 03, 2024. 
  • Our Company has filed a Counter claim no 6 of 2013 against Medtech Life Private Limited (“Respondent”) before Ordinary Original Civil Jurisdiction at the Hon’ble High Court of Judicature at Bombay (“Hon’ble Court”). Our Company has filed the same against the claim made by the Respondent in COIMP 16 of 2011. Both cases are pending adjudication before the Hon’ble Court

Important: Clearly state this is not financial advice and readers should do their own research before investing.

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