Rashi Peripherals Limited IPO – Get Date, Price, Review and Details

In this article, we will discuss

• Introduction
• The objective of the fresh issue
• Key Strengths and Opportunities
• Risks
• Conclusion

Introduction

Rashi Peripherals Limited was incorporated in 1989 and has more than 34 years of experience in the distribution of ICT products in India. The company commenced its operations with the manufacturing of peripherals. With the liberalization of the Indian IT sector in 1991, it transitioned to the distribution of ICT products of global technology brands in India. It is amongst the leading national distribution partners for global technology brands in India for information and communications technology (“ICT”) products in terms of revenues and distribution network in Fiscal 2023. It is also one of the fastest-growing national distribution partners for global technology brands in India in terms of revenue growth between Fiscal 2021 and Fiscal 2023. It primarily operates two business verticals namely Personal Computing, Enterprise and Cloud Solutions (“PES”), and Lifestyle and IT Essentials (“LIT”). The company differentiates itself by offering end-to-end services such as pre-sale activities, solutions design, technical support, marketing services, credit solutions, and warranty management services. It has been instrumental in facilitating the entry of several global technology brands and is among the select players that led the formalization of the fragmented and unorganized ICT product distribution in India.

The objective of the fresh issue:

The company intends to utilize the net proceeds from the fresh issue towards funding the following objects:

• Repayment and/or prepayment of certain outstanding borrowings availed by the company;
• Funding working capital requirements of the company, and
• General corporate purposes.

Key Strengths and Opportunities:

• Rashi Peripherals Limited is among the leading technology-integrated national distribution partners for global technology brands in India for ICT products in terms of revenues in Fiscal 2023. Its revenue from operations grew at a CAGR of 26.32% from Rs. 59,250 million in Fiscal 2021 to Rs. 94,543 million in Fiscal 2023 and was Rs. 54,685 million in the six months ended September 30, 2023. It commands a significant market share in India in product categories such as processors (45%), graphics cards (47%), pen drives (42%), hard drives (29%), keyboards and mice (21%), monitors (27%), UPS (13%), laptops (10%), desktops (10%), routers (33%), and switches (10%) in Fiscal 2023.
• The company maintains long-term relationships with several marquee global technology brands from whom it procures ICT products for further supply in the course of the business. It served 52 global technology brands as of September 30, 2023.
• Between Fiscal 2002 and Fiscal 2023, the company distributed 311.89 million units from global technology brands, enabling it to satisfy customer requirements for seamless product availability and meet end-user demand for multi-vendor and multi-product IT configurations. Over the years, it has continuously added products across sub-segments like lifestyle, components, networking, personal computing, storage and memory, mobility, enterprise, and embedded solutions.

Risks:

• Rashi Peripherals is dependent on various vendors, which are global technology brands, for the products it distributes. A major portion of the revenues derived by the company is generated from the distribution of products manufactured by its top eight global technology brands. Any delay or failure on the part of such global technology brands to supply products may materially and adversely affect the business operations of the company.
• The company’s lower gross margins may magnify the impact of variation in revenue, operating costs, bad debts, and interest expense on its operating results.
• Increasing competition in the information and communications technology products distribution industry may create certain pressures that may adversely affect the business operations and future growth prospects of the company.

Conclusion:

Rashi Peripherals Limited comes at an earnings valuation of 11x based on its EPS as of March 31, 2023, and the upper price band. Redington India Limited is the only listed competitor of Rashi Peripherals in India. Redington Limited had a PE multiple of 12x as of February 04, 2024. Hence, the valuation of Rashi Peripherals appears to be fully priced. Considering the company’s financials, valuation, market position, and future growth prospects,

we advise the investors to consider subscribing to this IPO solely for listing gains.