Prizor Viztech coming with IPO to raise Rs 25.15 crore

Prizor Viztech

• Prizor Viztech is coming out with a 100% book building; initial public offering (IPO) of 28,91,200 shares in a price band Rs 82-87 per equity share.
• The issue will open on July 12, 2024 and will close on July 16, 2024.
• The shares will be listed on NSE Emerge Platform.
• The face value of the share is Rs 10 and is priced 8.20 times of its face value on the lower side and 8.70 times on the higher side.
• Book running lead manager to the issue is Shreni Shares.
• Compliance Officer for the issue is Bhatt Hetaxiben Umang.

Profile of the company

The company is engaged in the business of providing security and surveillance solutions by offering comprehensive range of CCTV cameras which serves different verticals like retail, government, educational and infrastructure, among others. The company in the year 2022 expanded its product portfolio by selling different sizes and features of televisions, touch panels and monitors manufactured by third parties under its brand name. It also provides services including video management software which provides surveillance feature to its customers in a single monitor and location.

Its product portfolio is mainly segregated into two parts, namely: (i) Security and Surveillance Solutions (network cameras & high-definition analog cameras, network video recorders, digital video recorders); and (ii) LED televisions, Monitors & Touch Panels. It assembles a diverse range of surveillance and security cameras having different applications and utilities. It undertakes quality control, testing and evaluation activities at its workshops to develop these products. It offers its customers with both basic CCTV systems (e.g., HD CCTV Cameras) for their homes or cameras with different surveillance features for their commercial properties (e.g., face detection cameras, broadcasting cameras, etc) and provides technical and annual maintenance services for such products. It also offers televisions, touch panels and monitors manufactured by third parties under its brand name.

Its commitment to quality is evident in its workshops, which have been accredited with management system certificates for compliance with ISO 9001:2015 and ISO 14001:2015. In addition, it holds ISO 27001:2013 certification for ‘Information Security Management System Standard’ which highlights its commitment to safeguarding sensitive information and ensuring data security. Furthermore, its CCTV products are certified to meet the quality standards set by Bureau of Indian Standards i.e., IS 13252, while its LED Televisions are certified in compliance with IS 616. 

Proceed is being used for:

• Funding of capital expenditure requirements of the company towards setting up of display centre and inventory storage in Ahmedabad, Gujarat.
• Funding working capital requirements.
• General corporate purposes.

Industry Overview

The Indian electronics system design and manufacturing (ESDM) sector is one of the fastest growing sectors in the economy and is witnessing a strong expansion in the country. The ESDM market in India is well known internationally for its potential for consumption and has experienced constant growth. Indian manufacturers are attracting the attention of multinational corporations due to shifting global landscapes in electronics design and manufacturing capabilities, as well as cost structures. Companies from all over the world are striving to develop local capacities in India not only to serve the domestic market but also to cater to international markets. 

The Indian electronics manufacturing industry is projected to reach $520 billion by 2025. The demand for electronic products is expected to rise to $400 billion by 2025 from $33 billion in FY20. Electronics market has witnessed a growth in demand with market size increasing from $145 billion in FY16 to $215 billion in FY19-the market witnessed a growth of 14% CAGR from 2016-19. Electronics system market is expected to witness 2.3x demand of its current size (FY19) to reach $160 billion by FY25. The top products under the ESDM sector with the highest CAGR include IT/OA at 54%, followed by industrial electronics at 38% and automotive electronics at 10%.

Local electronics design and production are being positively influenced by ongoing domestic consumption, changing dynamics in the global supply chain, and a plethora of policy initiatives to assist indigenous manufacturing in the current period is most advantageous. The smooth implementation of new initiatives and the reversal of restrictive laws will go a long way toward boosting international business confidence in India's business environment and attracting manufacturing investments. In India, Sony, Samsung, LG Electronics, Panasonic, and other companies are the market leaders in the ESDM sector. Government efforts are concentrated on bridging the digital gap. Projects like ‘Digital India,’ ‘Smart Cities,’ ‘ePanchayats,’ ‘National Optical Fiber Network,’ etc. enhanced consumer demand for electronic goods around the nation.

Pros and strengths

Wide product portfolio having applications across industry verticals: It has a wide range of product portfolio having applications across different verticals like retail, government, educational and infrastructure sectors. It works with its suppliers to ensure that its customers have access to the latest surveillance and television products available on the market. It offers its clients both basic CCTV systems (e.g., HD CCTV Cameras) for their homes or TV displays for their commercial properties (e.g., face detection cameras, broadcasting cameras, etc).

High standard of product quality: It has been accredited with management system certificates for compliance with ISO 9001:2015 and ISO 14001:2015. We also have ISO 27001:2013 certification for ‘Information Security Management System Standard’ and quality certifications from Bureau of Indian Standards IS 13252 & IS 616 for CCTV and televisions products. Having obtained such certification ensures that adequate quality systems as per industry standards are followed by the company. Its consistent delivery of quality products results in client’s satisfaction which in turn enhances its reputation and also builds brand loyalty in the market.

Strong marketing practices: The efficiency of the marketing and sales network is critical to the success of the company. It produces distinctive marketing and advertising campaigns that generate high customer engagement. This marketing and campaigns include exhibitions, roadshows and dealer meets. To retain its customers and acquire new customers, its team having adequate experience and competencies, regularly interact with them through such events and focuses on gaining an insight into the additional needs of customers. Its technical team also gives demonstration to its customers on regular interval for better understanding on usage of its products.

Risks and concerns

Revenue is majorly dependent on Gujarat: Its revenue is majorly dependent on the one State i.e., Gujarat. It generates almost 93.18%, 86.58%, and 74.34%, respectively of the total revenue from operation generated for the financial year ended March 31, 2024, 2023 and 2022, respectively. Such geographical concentration of its business in the Gujarat region heightens its exposure to adverse developments related to competition, as well as economic and demographic changes in these regions which may adversely affect its business prospects, financial conditions and results of operations. 

Revenue from operation is derived from assembling activities: Its revenue is majorly generated from assembling, trading and consulting services. Its revenue from assembling activities, contributes 64.12%, 68.13%, and 84.16% of its total revenue from operations for the financial year ended March 31, 2024, 2023 and 2022, respectively. Any disruption to its assembling facilities may result in production shutdowns. These facilities are subject to certain operating risks, such as the breakdown or failure of equipment, power supply or processes, performance below expected levels of efficiency, obsolescence of equipment or machinery, labour disputes, natural disasters, industrial accidents and the need to comply with the directives of relevant government and regulatory authorities. Its customers rely significantly on the timely delivery of its products and its ability to provide an uninterrupted supply of its products is critical to its business.

Working capital requirement: Its business demands on working capital requirements. In case there are insufficient cash flows to meet its working capital requirement or it is unable to arrange the same from other sources or there are delays in disbursement of arranged funds, or it is unable to procure funds on favourable terms, it may result into its inability to finance its working capital needs on a timely basis which may have an adverse effect on its operations, profitability and growth prospects. It intends to continue growing by expanding its business operations. 

Outlook

Prizor Viztech is engaged in the business of providing security and surveillance solutions by offering comprehensive range of CCTV cameras which serves different verticals like retail, government, educational and infrastructure, among others. The company in the year 2022 expanded its product portfolio by selling different sizes and features of televisions, touch panels and monitors manufactured by third parties under its brand name. It also provides services including video management software which provides surveillance feature to its customers in a single monitor and location. On the concern side, it operates in a highly competitive industry with a number of other distributors that deals in competing products. As a result, to remain competitive in the market it must continuously strive to reduce its distribution costs and improve its operating efficiencies and expand its products offering. If it fails to do so, it may have an adverse effect on its market share and results of operations.

The company is coming out with a maiden IPO of 28,91,200 equity shares of Rs 10 each. The issue has been offered in a price band of Rs 82-87 per equity share. The aggregate size of the offer is around Rs 23.71 crore to Rs 25.15 crore based on lower and upper price band respectively. On performance front, revenue from operations for FY 2023-24 amounted to Rs 3,565.41 lakh while revenue for FY 2022-23 was Rs 1,376.84 lakh. Revenue in FY 2023-24 was higher by 158.96% from FY 2022-23.  Moreover, the company’s profit after tax increases to Rs 557.44 lakh in FY 2023-24 as compared to Rs 21.06 lakh in FY 2022-23. Meanwhile, it plans to expand its operation by funding of capital expenditure towards setting up of display centre for brand awareness and creating selling opportunities for its products. These activities are integral to creating, maintaining and enhancing brand visibility and correspondingly to create, sustain and enhance its presence in the industry.