Aesthetik Engineers coming with IPO to raise Rs 26.47 crore

Aesthetik Engineers

• Aesthetik Engineers is coming out with initial public offering (IPO) of 45,64,000 shares in a price band Rs 55-58 per equity share.
• The issue will open for subscription on August 8, 2024 and will close on August 12, 2024.
• The shares will be listed on NSE Emerge Platform.
• The face value of the share is Rs 10 and is priced 5.50 times of its face value on the lower side and 5.80 times on the higher side.
• Book running lead manager to the issue is Narnolia Financial Services.
• Compliance Officer for the issue is Priyanka Gupta.

Profile of the company

The company is engaged in the business of designing, engineering, fabrication and installation of facade systems. Its portfolio includes building facades, Aluminium Doors and Windows, Railing and Staircase and Glassfibre Reinforced Concrete (GRC). It offers a wide range of products and services to meet the demands of its customers who belong to various industries such as Hospitality, Residential, Commercial, and Infrastructure Projects. It executes end to end solution of its offerings i.e, from designing of facade to installation of facade at the site.

Over the years it has executed various projects for the various reputed clients from different industries. It has offered its services to various construction projects including commercial complex, residential building, airports, and Malls in various states such as West Bengal, Bihar, Maharashtra, Assam, Odisha and Gujarat. It has various recognized suppliers from domestic and international market to fulfil its raw material supplies, and it has been able to secure timely supply of required materials for its existing operations. The company has a standard operating process for design, fabrication and installation of ita products and services, adherence to these standardized protocols ensures consistency, quality control, and efficiency throughout the entire lifecycle of facade development, thereby facilitating the attainment of project objectives and client satisfaction. 

Proceed is being used for:

• Meeting out the Capital Expenditure Requirement of Company
• Meeting out the Working Capital requirements of the Company
• Meeting out the General Corporate Purposes
• Meeting out the Issue Expenses

Industry Overview

The India facade market size reached $2,855.4 million in 2023. Looking forward, the market is expected to reach $5,431.9 Million by 2032, exhibiting a growth rate (CAGR) of 7.18% during 2024-2032. The increasing construction activities, rising number of commercial spaces, and the growing number of remodeling and upgradation projects represent some of the key factors driving the market. The increasing construction activities in the residential areas on account of rapid urbanization and inflating disposable income levels represent one of the key factors driving the demand for façades in India. Moreover, the rising number of commercial spaces, such as shopping malls, restaurants, cafes, offices, hotels, and institutions, is contributing to the market growth. 

The India aluminum doors and windows market is experiencing growth as the construction and real estate sectors continue to expand. Aluminum doors and windows are preferred for their durability, aesthetics, and energy efficiency. They are increasingly used in residential and commercial buildings. For India Exporters of Aluminum Doors And Windows , USA seems to be the most attractive market (in 2028) in terms of export potential followed by United Kingdom (UK), Australia, Netherlands and Japan. Also USA offers high import demand potential for other countries as well in 2028.

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. The India Aluminum Doors and Windows market faces challenges related to quality standards, energy efficiency requirements, and competition from alternative building materials.

Pros and strengths

Dedicated logistical solutions: It has established a sophisticated and dedicated logistics solutions that ensure the seamless operation of its business and the timely execution of projects, giving it a distinct advantage in the marketplace. It helps it offers its services across all over India. This competitive strength not only contributes to successful project delivery but also enhances its reputation for reliability and operational excellence in the eyes of clients.

Consistency in quality and service standards: It has a clear standard operating process for designing, fabrication and supply of Building facades, Aluminium Doors and Windows, Railing and Staircase and Glassfibre Reinforced Concrete (GFRC). It follows utmost quality standards in its areas of operation so that its products meet the required Quality standards such as heat and water resistance. It helps it in maintaining a cordial relationship with its customers.

Advance machineries and product technologies: By leveraging its advance machineries and technologies, it continues to provide new value to society. It has procured most of its machinery for the fabrication and assembly of quality products. It has procured Italian fabrication technology and machinery, such as dedicated precision punching technology, double head cutting machines, copy routers etc. Further, one of the objects of the proposed issue is to purchase of machineries, which will result in improving its operations.

Risks and concerns

Do not enter long term contracts with suppliers: Its ability to manufacture and make timely deliveries of its products is dependent upon the availability of raw materials and the cost incurred over them. It generally does not enter into agreements with its suppliers and transact with them on an order-by-order basis, and it cannot assure that it will continue to enjoy undisrupted relationships with its suppliers in the future. It cannot assure that it will be able to procure such specific raw materials in a timely manner or at commercially acceptable terms, or at all, resulting in delays in production and delivery of its products.

Delays and/or defaults in client payments: Due to the inherent characteristics of its business operations, it occasionally allocate resources to projects before obtaining payments from its clients that are adequate to cover the expenses incurred during the process. In difficult economic times, some of its clients may find it increasingly difficult to pay invoices for its services in a timely manner. Delays in client payments may require it to make a working capital investment, which could impact its cash flows and liquidity. If a client fails to pay invoices on a timely basis or defaults in making its payments on a project in which it have devoted significant resources, there could be an adverse effect on its results of operations or liquidity.

Working capital requirement: The company’s business operations require a significant amount of working capital. In its business, working capital is often required to finance the procurement of raw material and for salaries of employees. In the event, it is unable to source the required amount of working capital, it might not be able to efficiently satisfy the demand of its clients in a timely manner or at all. Even if it is able to source the required amount of funds, it cannot assure that such funds would be sufficient to meet its cost estimates, which could have adverse effect on its financial conditions and results of operations.

Outlook

Aesthetik Engineers is engaged in the business of designing, engineering, fabrication and installation of facade systems. Its portfolio includes building facades, Aluminium Doors and Windows, Railing and Staircase and Glassfibre Reinforced Concrete (GRC). It offers a wide range of products and services to meet the demands of its customers who belong to various industries such as Hospitality, Architecture, and Infrastructure. On the concern side, it operates in a highly competitive market, with participants in the organized and the unorganized sectors. There are no entry barriers in its industry, which puts it to the threat of competition from new entrants. It faces competition from other manufacturers, traders, suppliers and importers of electric equipment in relation to its offerings.

The company is coming out with a maiden IPO of 45,64,000 equity shares of Rs 10 each. The issue has been offered in a price band of Rs 55-58 per equity share. The aggregate size of the offer is around Rs 25.10 crore to Rs 26.47 crore based on lower and upper price band respectively. On performance front, total Income for the Financial Year 2023-24, it stood at Rs 607,949.78 Thousand whereas in Financial Year 2022-23 it stood at Rs 403,582.31 Thousand representing an increase of 50.64%. The restated profit after tax for the Financial Year 2023-2024 stood at Rs 50,298.96 Thousand. Whereas for the Financial Year 2022-23, it stood at Rs 11,258.71 Thousand representing an increase of 345.76%. Meanwhile, it continues to invest in increasing its operational efficiency throughout the organization. The company intends to improve efficiencies to achieve cost reductions and have a competitive edge over its peers. Alignment of its people to ‘process improvement’ through management change and upgrading of skills as required for customer satisfaction is a continuous activity.