Company Overview:
Rashi Peripherals Limited 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 FY23. The company is also one of the fastest growing national distribution partners for global technology brands in India in terms of revenue growth between FY21 and FY23. 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.
Key Highlights:
1. Business verticals: Personal Computing, Enterprise and Cloud Solutions (PES): Under this vertical the company distributes personal computing devices, enterprise solutions, embedded designs/ products and cloud computing. Lifestyle and IT essentials (LIT): This includes the distribution of products such as (a) Components that include graphic cards, central processing units (CPUs) and motherboards, (b) Storage and memory devices, (c) Lifestyle peripherals and accessories that include keyboard, mice, web cameras, monitors, wearables, casting devices, fitness trackers and gaming accessories, (d) Power equipment such as UPS and invertors and (v) networking and mobility devices.
2. Distribution Network and Channels: The company’s pan-India distribution network comprises of 50 branches that operate for sales and as service centers and 63 warehouses as of 1HFY24. Through the branches and warehouses, the company is able to cover 680 locations in India, as of 1HFY24. The company distributes products through the following channels: (a) General Trade: The company has 8,402 channel partners, which include hybrid resellers, regional distributors, retailers, brand stores, system integrators, OEMs and corporate resellers. (b) Modern Trade: Includes large format retail (LFR), multi-format retail (MFR) and small format retail (SFR) chains. (c) E-Commerce: Includes certain of India’s leading online marketplaces.
3. Global Technology Brands: The company is the national distribution partner for 52 global technology brands since Sep’23. The company’s partnership covers various product categories, including personal computing, mobility, enterprise, embedded solutions, components, lifestyle, storage, memory devices, power, and accessories. These brands include ASUS Global, Dell, HP, Lenovo, Logitech, NVIDIA, Intel, Western Digital, Schneider Electric, Eaton, ECS, Belkin, TPV, LG Electronics, Toshiba, Harman International and more.
Valuation: The company is valued at FY23 PE and EV/EBITDA multiple of 16.6x and 12.2x respectively, at the upper price band on post-issue capital. The revenue from operations grew at a CAGR of 26.3% from Rs 5,925.1 cr in FY21 to Rs 9,454.3 cr in FY23 and was Rs 5,468.5 cr in 1HFY24. The company’s total borrowings as of 1HFY24 stood at Rs 1,395 cr, Debt/Equity ratio of 1.8x. The company is raising Rs 600 cr through fresh issue, amongst which the company will use the part of the proceedsto reduce debt(Rs 326 cr) and fund working capital requirement. This will significantly reduce the Debt/Equity ratio to 0.8x on post issue capital. We recommend investors to subscribe to the issue for long-term investment horizon.
Click here to download SBI Securities Rashi Peripherals Limited IPO Note
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