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Aesthetik Engineers IPO: A Closer Look at the Cracks Aggressive

Aug 8, 2024 #Aesthetik Engineers, #ipo, #ipo alert, #ipo analysis, #latest, #latest ipo, #main board ipo, #new
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Aesthetik Engineers Introduction

Aesthetik Engineers Limited is a company specializing in the design, engineering, fabrication, and installation of facade systems. Their offerings include building facades, aluminum doors and windows, railings, staircases, and glassfibre reinforced concrete (GRC) structures. Founded in 2008, the company is headquartered in Kolkata, with a manufacturing facility in Howrah.

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Brief about 

Summary of the business

Aesthetik Engineers Company is engaged in the business of designing, engineering, fabrication and installation of facade systems. Our portfolio includes building facades, Aluminium Doors and Windows, Railing and Staircase and Glassfibre Reinforced Concrete (GRC). We offer a wide range of products and services to meet the demands of our customers who belong to various industries such as Hospitality, Architecture, and Infrastructure. We execute end to end solution of our offerings i.e, from designing of façade to installation of facade at the site. Company has a factory situated at Howrah, Kolkata which is being used for the fabrication and assembly of products with emphasis on quality and performance which are resistant against UV rays, rains, dust, noise and other substance,

History

Aesthetik Engineers Company was incorporated as a Private Limited Company under the Companies Act, 1956 in the name and style of “Aesthetik Engineers Private Limited” bearing Certificate of Incorporation Number U74210WB2008PTC124716 issued by the Registrar of Companies, Kolkata dated April 02, 2008 upon takeover of the existing partnership firm namely “M/s Aesthetik”. Further, Company was converted into a Public Limited Company in pursuance of a special resolution passed by the members of our Company at the Extra- Ordinary General Meeting held on December 18, 2023 and the name of our Company changed from “Aesthetik Engineers Private Limited” to “Aesthetik Engineers Limited” & Registrar of Companies, Kolkata issued a new certificate of incorporation consequent upon conversion dated January 24, 2024, bearing CIN U74210WB2008PLC124716.

Aesthetik Engineers Company is engaged in the business of designing, engineering, fabrication and installation of facade systems. Aesthetik Engineers portfolio includes Building facades, Aluminium Doors and Windows, Railing and Staircase and Glassfibre Reinforced Concrete (GRC).

Mr. Avinash Agarwal is the Promoter & Managing Director of the Company, who started his journey in the year 2003 with a partnership firm, in the name of “M/s Aesthetik”. He has an experience of more than two decades in the facade industry. His experience in the facade industry provides us the competitive edge in the market. He is the guiding force behind the success of the Company, and with his guidance and commitment, company has been able to grow manifold.

Promoters & Board of Directors

  • The promoter of our Company is
    • Mr. Avinash Agarwal
    • Ms. Sreeti Agrawal
    • Ms. Manisha Sureka
    • M/s, Avinash Agarwal (HUF).

Board of directors

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NameDesignation
Avinash AgarwalManaging Director
Sreeti AgarwalDirector
Manisha SurekhaDirector
Ullash PradhanIndependent Director
P Singa RamIndependent Director
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Share Holding pattern

Name of shareholderPre issuePost issue
% of Holding% of Holding
Promoters
Avinash Agarwal66.12%48.60%
Sreeti Agarwal6.70%4.93%
Avinash Agarwal (HUF)5.67%4.17%
Manisha Sureka0.06%0.04%
Total – A78.56%57.74%
Promoter Group
Vijay kumar Agarwal0.12%0.09%
Shyama Agarwal0.30%0.22%
Priyanka Jalan0.23%0.17%
Anukaaran Suppliers Private Limited8.30%6.10%
Vijay kumar Agarwal HUF12.50%9.19%
Total – B21.44%15.76%
Public–26.50%
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Qualitative Factors

  • Designing and execution capabilities
  • Experienced management team and a motivated and efficient work force;
  • Cordial relations with our consumers;
  • Quality assurance and control.

Strategy

  • Improve operational efficiency:
  • Capitalize the opportunity in the solar and construction industry:
  • Expand our geographical network:
  • Focus on consistently meeting quality standards:

Industry Outlook

Global Facades Market Overview

Facades Market Size was valued at USD 220.9 billion in 2022. The Facades market industry is projected to grow from USD 235.0376 Billion in 2023 to USD 386.0738 billion by 2032, exhibiting a compound annual growth rate (CAGR) of 6.40% during the forecast period (2023 – 2032). Increased unprecedented growth in the development of energy-saving façade materials development of advanced materials along with an increased focus on aesthetics is the key market driver enhancing the market growth.

Indian Façade Market

The India facade market size reached US$ 2,855.4 Million in 2023. Looking forward, the market is expected to reach US$ 5,431.9 Million by 2032, exhibiting a growth rate (CAGR) of 7.18% during 2024-2032.

Factors Affecting the Growth of the India Facade Industry:

  • Increasing Urbanization and Real Estate Development
  • Continuous Technological Advancements and Innovation
  • Continuous Technological Advancements and Innovation

The India facade market is currently witnessing a dynamic shift characterized by the increasing adoption of sustainable and energy-efficient facade materials. With rapid urbanization and the growing emphasis on green building norms across the country, there is a notable trend toward using advanced, eco-friendly materials like high-performance glass and composites. In line with this, ongoing technological innovations, particularly in digital design and prefabrication, are enabling more complex and aesthetically pleasing facade designs, thus contributing to market growth.

Global Aluminum Doors and Windows Industry

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Aluminum Doors and Windows Market Size was valued at USD 67.5 Billion in 2022. The Aluminum Doors and Windows market Product is projected to grow from USD 69.5 Billion in 2023 to USD 88.1 Billion by 2032, exhibiting a compound annual growth rate (CAGR) of 3.00% during the forecast period (2023 – 2032). Due to the significant financial investments being made in building construction projects and the rising quantity of construction projects, are the key market drivers enhancing the market growth.

In the context of the market, consumer awareness of energy- efficient and green constructions has significantly increased, as has early acceptance and government support. This has aided the growth of the regional market and, as a result, created an excellent level of competition and increased market size.

Indian Aluminum Doors and Windows Industry

India Aluminum Doors and Windows Market registered a growth of 54.53% in value shipments in 2022 as compared to 2021 and a decrease of -10.35% CAGR in 2022 throughout 2017.

The India aluminum doors and windows market is primarily driven by the construction and real estate sector. The demand for energy-efficient and aesthetically pleasing building components has fueled the growth of aluminum doors and windows. They offer durability, low maintenance, and corrosion resistance, making them a preferred choice for modern construction. Government initiatives promoting affordable housing and urban development are also stimulating market growth.

Business Data

Verticals

  • Facade
    • Spider Glazing
    • ACP/ HPL / Stone Cladding
    • Aluminium Louvers
    • Structural Glazing/ Curtain Wall
    • Canopy / Skylight / Dome
  • Doors and Windows
  • Railing and staircase
  • Glassfibre Reinforced Concrete (GFRC)

Product wise break-up

(Amount in Thousands)

Particulars31st December, 202331st March, 202331st March, 202231st March, 2021
Supply of Products
Solar frames/ Windows sections/ Scraps52,811.002,737.303,156.572,984.54
Supply of Services
Doors, Windows & Louvers1,08,872.411,83,928.591,75,078.5369,817.38
Structural/ Curtain Wall/ Spider Glazing1,65,419.811,09,522.1148,868.9316,232.79
Architectural Steel/ Finishing works8,230.853,339.153,477.1518,928.61
ACP/Stone/ Teracotta / HPL Cladding4,759.5245,836.5817,596.515,191.08
GFRC/ Speciality Concrete/ Civil works1,32,537.5954,733.919,213.4822,650.86
Total4,72,631.194,00,097.642,57,391.171,35,805.27
Aesthetik Engineers

Revenue contribution from Geography presence

(Amount in Lakhs, except %)

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State Name31stDecember, 2023% of Revenue31stMarch,2023% of Revenue31stMarch,2022% of Revenue31stMarch,2021% of Revenue
West Bengal4,21,890.3595.53%2,63,841.1590.51%2,32,958.8465.94%1,29,730.6889.26%
Aesthetik Engineers IPO gmp

Customer dependency

(Amount in Thousands)

ParticularsDecember 31,2023March 31,2023March 31,2022March 31,2021
Revenue from Operations4,72,631.194,00,097.642,57,391.171,35,805.27
Top ten (10) Customers3,55,334.433,19,599.932,03,292.711,09,463.71
% of top ten (10) Customers toRevenue from Operations75.18%79.88%78.98%80.60%
Aesthetik Engineers IPO gmp

Machinery/Plants/Factory

ParticularsAddress
 Registered Office1858/1, 5th Floor, Unit 503-505, Acropolis Mall, Rajdanga Main Road, Kasba, Kolkata, West Bengal-700107, India
FactoryPlot No. 3108, Hanuman Complex, Ranihati Amta Road, PO- Islampur, Howrah- 711401
Aesthetik Engineers IPO gmp

Suppliers

Supplier% of Cost of material consumed
Schueco India Pvt. Ltd.17.03
Calcutta Metal Corporation15.77
Marg Steel Private Limited7.95
Shree Gayatri Trading Co.6.76
JP Ganeriwala & Co.5.04
Glaze Architecture Pvt. Ltd.4.38
Anchor Glass Industry LLP4.08
Century Extrusions Ltd3.61
Paint Smith3.31
Patwari Distributors3.03
TOTAL70.96
Aesthetik Engineers IPO gmp

Customers

Customer% of Revenue from operations 2023
Infosys Ltd.28.35
S.E. Builders & Realtors Limited12.68
ACC India Pvt. Ltd.5.62
Kolkata- One Excelton Pvt. Ltd.5.63
Larson Turbo Limited4.77
Shapoorji Pallonji & Co Pvt. Ltd.3.70
La Reliant Aluminium Pvt. Ltd.4.15
La Reliant Extrusions Pvt. Ltd.3.80
Marg Steel Private Limited3.61
The Neotia University2.86
TOTAL75.18
Aesthetik Engineers IPO gmp

Competition

Aesthetik Engineers operate in a highly competitive market. Aesthetik Engineers face competition from other companies operating in the façade industry, interior decoration industry, in the same geographies as ours. Aesthetik Engineers competition depends on various factors, such as the type of project, total contract value, potential margins, location of the project and client relationships.

Competition in Aesthetik Engineers industry primarily involves factors such as:

  • quality and capability of plant and machinery
  • ability to meet the customer’s schedule
  • experience and reputation
  • price of the offerings

While service quality, technical ability, performance record, experience, health and safety records and the availability of skilled personnel’s are key factors in client decisions among competitors, price often is the deciding factor in most tender awards. Some of our competitors may have greater resources than those available to us.

Some of Aesthetik Engineers competitors are:

  • Nitson and Amitsu Private Limited
  • ALCLAD Fabrication Private Limited
  • Glass Wall Systems (I) Private Limited
  • Innovators Façade Systems Limited

Peer companies comparison

 Name of the companyFace Value(Per share) CMP EPS (Rs) P/E Ratio RONW(%)NAV (Rs.Per share)PAT(Rs. In Thousands)
1Aesthetik EngineersLimited10.005847.351.2329.31161.5639,952.71
Peer Group
2Innovators facade System Limited10.00188.002.6827.404.3262.0050,517.00
Aesthetik Engineers IPO gmp

(Amount in Thousands, except%)

 ParticularsAesthetik Engineers LimitedInnovators facade System Limited
Mar-23Mar-22Mar-21Mar-23Mar-22Mar-21
Revenue from Operations4,00,097.642,57,391.171,35,805.2718,11,6588,92,3636,58,661.79
Growth in Revenue from Operations55.44%89.53%_100.86%36.49%–
EBITDA20,458.2711,497.167,745.331,81,8291,05,16482,768.26
EBITDA Margin5.11%4.47%5.70%10%11.78%12.56%
PAT11,258.71(4,512.46)2,374.6284,45516,3017,863
PAT Margin2.81%(1.75%)1.75%4.66%1.83%1.19%
Net Worth96,366.3385,107.6289,620.0811,19,255.0010,34,800.0010,18,499.28
Aesthetik Engineers IPO gmp

Group companies

  • Anukaran Suppliers Private Limited
  • Solisys Solar Private Limited
  • Aesthetik Renewables Private Limited
  • Hindusthan Lace Mfg Corpn Pvt Ltd

Business risk factors

  • Aesthetik Engineers business is subject to seasonal and other environmental factors, that can adversely affect our business and result of operations.
  • Significant portion of our revenue has been generated from state of West Bengal, any loss of business from this states may adversely affect our revenues and profitability.

(Amount in Lakhs, except %)

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State Name31stDecember, 2023% of Revenue31stMarch,2023% of Revenue31stMarch,2022% of Revenue31stMarch,2021% of Revenue
West Bengal4,21,890.3595.53%2,63,841.1590.51%2,32,958.8465.94%1,29,730.6889.26%
Aesthetik Engineers IPO gmp
  • Aesthetik Engineers top ten customers contribute significant portion of our revenues during the current and previous financial years. Any loss of business from one or more of them may adversely affect our revenues and profitability.

(Amount in Thousands)

ParticularsDecember 31,2023March 31,2023March 31,2022March 31,2021
Revenue from Operations4,72,631.194,00,097.642,57,391.171,35,805.27
Top ten (10) Customers3,55,334.433,19,599.932,03,292.711,09,463.71
% of top ten (10) Customers to Revenue from Operations75.18%79.88%78.98%80.60%
Aesthetik Engineers IPO gmp

Financials

Key Financial Ratios

Ratios31st December 202331st March 2023
 Current Ratio 1.87 1.09
 Debt-Equity Ratio 0.43 0.59
 Debt Service Coverage Ratio  1.03  0.40
Return on Equity Ratio(%) 0.33 0.12
Inventory turnover ratio 7.87 8.77
 Trade Receivables turnover ratio  4.20  5.64
Trade Payables turnover ratio 5.40 7.60
Net capital turnover ratio 3.70 32.92
 Net profit ratio(%) 0.08 0.03
 Return on Capital employed(%)  0.32  0.18
Aesthetik Engineers IPO gmp

Key Performance Indicators

(Amount in Thousands, except EPS, % and ratios)

ParticularsDecember 31st, 2023March 31st , 2023March 31st , 2022March 31st , 2021
Revenue from operations472,631.19400,097.64257,391.17135,805.27
Growth in revenue from operations18.13%55.44%89.53%–
EBITDA60,744.4020,458.2711,497.167,745.33
EBITDA (%) Margin12.85%5.11%4.47%5.70%
EBIDTA Growth year on year196.92%77.94%48.44%–
ROCE (%)32.3818.648.544.04
Current Ratio1.861.091.242.39
Operating cash flow(58,491.18)33,363.4713,052.57(9,136.05)
PAT39,952.7111,258.71(4,512.46)2,374.62
ROE/ RoNW29.31%11.68%(5.30%)2.65%
EPS47.3513.34(5.35)2.81
Aesthetik Engineers IPO gmp

Balance Sheet

( Amount in Thousands)

Particulars31st Dec, 202331st March,202331st March,202231st March, 2021
Assets
Non-Current Assets57,375.741,01,896.9794,951.5882,505.15
Current Assets2,75,458.481,43,879.931,34,180.741,11,325.75
Total Assets3,32,834.222,45,776.902,29,132.321,93,830.90
Equity and Liabilities
Equity139,894.5199,941.8088,683.0993,195.55
Non-Current Liabilities45,194.4014,125.0032,242.3854,134.70
Current Liabilities1,47,745.311,31,710.091,08,206.8546,500.65
Total Equity and Liabilities3,32,834.222,45,776.892,29,132.311,93,830.90
Aesthetik Engineers IPO gmp

Profit & Loss

(Amount in Thousands, except EPS, % and ratios)

ParticularsDecember 31st, 2023March 31st , 2023March 31st , 2022March 31st , 2021
Revenue from operations472,631.19400,097.64257,391.17135,805.27
Growth in revenue from operations18.13%55.44%89.53%–
EBITDA60,744.4020,458.2711,497.167,745.33
EBITDA (%) Margin12.85%5.11%4.47%5.70%
EBIDTA Growth year on year196.92%77.94%48.44%–
PAT39,952.7111,258.71(4,512.46)2,374.62
Aesthetik Engineers IPO gmp

Cash Flow

(Amount in Thousands)

Net Cash Generated fromDecember 31,2023March 31, 2023March 31, 2022March 31, 2021
Operating Activities(58,491.18)33,363.4713,052.57(9,136.05)
Investing Activities40,039.42(10,147.75)(14,988.13)14,184.94
Financing Activities25,975.57(23,649.58)(24,986.29)278.20
Aesthetik Engineers IPO gmp

SWOT ANALYSIS

  • Strengths
    • Specialized Expertise: Aesthetik Engineers excels in the design, engineering, fabrication, and installation of facade systems, aluminum doors and windows, railings, staircases, and GRC structures.
    • Advanced Technology: Utilization of advanced Italian machinery enhances efficiency and cost-effectiveness.
    • Diverse Portfolio: The company serves multiple sectors, including hospitality, residential, commercial, and infrastructure.
    • Strong Revenue Growth: Consistent increase in revenue, from ₹25.74 crore in FY22 to ₹60.72 crore in FY24.
  • Weaknesses
    • Geographical Concentration: Predominantly operates in specific states within India, which may limit market reach.
    • Dependence on Key Clients: High reliance on a few major clients could pose risks if these clients reduce their business.
  • Opportunities
    • Expanding Market: Growing demand for sustainable and aesthetically pleasing architectural solutions presents significant growth opportunities.
    • Technological Advancements: Adoption of new technologies and materials can enhance product offerings and efficiency.
    • IPO Proceeds: Utilization of IPO funds for capital expenditure and working capital can fuel further expansion.
  • Threats
    • Economic Fluctuations: Economic downturns can impact the construction and real estate sectors, affecting demand for the company’s products.
    • Competition: Intense competition from both domestic and international players in the facade and construction industry.
    • Regulatory Changes: Changes in building codes and regulations could require adjustments in product designs and manufacturing processes.

IPO Details

Aesthetik Engineers IPO Details

ParameterDetails
IPO TypeBook Built Issue
Issue SizeRs 26.47 crores
Issue CompositionFresh Issue of 45.64 lakh shares
Offer PriceRs 55 to Rs 58 per share
Minimum Order Quantity2000 shares
Issue Open DateAugust 8, 2024
Issue Close DateAugust 12, 2024
Allotment DateAugust 13, 2024 (expected)
Listing DateAugust 16, 2024 (tentative)
ExchangeNSE SME
IPO

Object of the issue

ParticularsAmount (In Rs. Lakh)
Capital Expenditures800.00
Working Capital Requirements1,500.00
General Corporate Purposes
Issue Expenses
IPO

Litigation involved

Please refer IPO DRHP page no.s 260-265

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