Aspire &Innovative Advertising Limited IPO Review
Aspire & Innovative Advertising Limited, a name that has been resonating in the consumer durables sector, was established with a vision to cater to the diverse needs of the Indian market. Founded on July 31, 2017, the company embarked on its journey to trade a wide array of consumer products ranging from kitchen appliances to mobile phones.
The company's roots are firmly planted in Delhi, India, where it was originally incorporated. This city, known for its vibrant business environment, served as the perfect cradle for Aspire & Innovative Advertising Limited to nurture its growth and expansion.
At the helm of the company are the promoters, Nitesh Agarwalla and Rinku Agarwalla, whose leadership has steered the company towards success. Their vision was not just to create a business but to forge a brand that stands for quality and trust. The promoter family has been instrumental in guiding the company through its formative years and setting a strong foundation for its future endeavors.
The inception of Aspire & Innovative Advertising Limited was driven by the need to bridge the gap in the consumer durables market, especially in the rural and semi-urban areas of India. The company aimed to provide a one-stop platform that brings multiple renowned brands under one umbrella, thereby improving the lifestyles of its customers. With a focus on serving the unbanked and under-banked segments of the population, the company aligns with the broader national objectives of financial inclusion and digital accessibility.
Aspire & Innovative Advertising Limited stands as a testament to innovative entrepreneurship and customer-centric business practices. From its city of origin to its promoter family, every aspect of the company reflects a commitment to excellence and a drive to serve the evolving needs of consumers across India. As the company continues to grow, it remains dedicated to its founding principles, ensuring that it remains a key player in the consumer durables market for years to come.
Competitive Strengths
Aspire & Innovative Advertising Limited, stands out in the competitive landscape of consumer durables trading. Founded in 2017, the company has carved a niche for itself by offering a diverse range of products, including kitchen appliances, home appliances, white goods, mobile phones, accessories, and solar products. Aspire & Innovative Advertising Limited's competitive strengths lie in its solid financial performance, diversified product range, strategic market positioning, and unwavering commitment to quality and innovation. These factors collectively contribute to the company's strong standing in the consumer durables sector and present a promising outlook for its future endeavors.
Revenue, Sales, and Profit
The company offers its services across various locations in India. For the periods ending September 30, 2023, March 31, 2023, March 31, 2022, and March 31, 2021, it derived approximately 87.80%, 91.70%, 89.49%, and 87.04% of its total revenue from sales in the top 10 geographical regions in India, respectively. The company reported revenue from operations of Rs. 108.12 Cr., Rs. 255.38 Cr. and Rs. 345.72 Cr. in FY 2021, 2022, and 2023 respectively. For the same time periods, it reported Profit after tax of Rs. 2.28 Cr., Rs. 4.37 Cr. and Rs. 5.31 Cr. respectively.
Distribution Network and Geographical Reach
The company's distribution network is robust, extending its reach to rural and semi-urban areas across India, which is a testament to its commitment to improving lifestyles by providing a single platform that amalgamates multiple brands. This strategic positioning allows the company to tap into the vast potential of India's varied geographies and demographics. Aspire & Innovative Advertising Limited operates a network of 19 warehouses strategically located in 16 states, which facilitates efficient logistics and supply chain management. This network is further supported by commercial arrangements with over 15 intermediaries, ensuring a seamless flow of products from the warehouses to the consumers.
The company's geographical reach is not just limited to warehousing. It boasts a strong Pan-India networking infrastructure, including more than 22 large warehousing facilities complemented by multiple hubs. This infrastructure empowers Aspire & Innovative Advertising Limited to deliver happiness to customers' fingertips, adhering to their promise of reliability and timely delivery. The distribution strategy is designed to optimize the flow of goods, ensuring that the vast array of products reaches the consumers efficiently and effectively.
Unique Features
The company's business model is noteworthy for its asset-light approach, which involves minimal expenses on assets while maximizing the use of intermediaries to facilitate services. This strategy allows for a broad reach in marketing, field staff interaction, demand collation, and financial services, particularly in areas that are not typically the focus of larger corporations. Aspire & Innovative Advertising Limited also emphasizes last-mile delivery, product distribution, after-sales support, and workforce up-skilling services, which are crucial for maintaining customer satisfaction and loyalty in the competitive market of consumer durables.
Investment in Research and Development
Aspire & Innovative Advertising Limited (AAIL) suggests they don't prioritize investment in Research and Development (R&D) because AAIL's core business revolves around product aggregation and distribution, primarily targeting underserved rural populations. They emphasize established functionalities like an Inventory Management System (IMS) and established partnerships with brands and distributors. This indicates a focus on optimizing existing operations rather than significant investment in groundbreaking new technologies. Their recent IPO filing highlights utilizing the raised capital for working capital needs, establishing new warehouses, and general corporate purposes. R&D isn't explicitly mentioned, suggesting it's not a major focus for the current funding allocation.
Aspire & Innovative Advertising Limited IPO Details
Issue Date: The issue date in an IPO, also known as the initial offering date, is when a company's stock is first made available for public purchase. This date is a significant milestone in the process of an initial public offering, marking the transition of a company from private to public status. (Issue Date: March 26, 2024 to March 28, 2024).
Listing Date: The listing date refers to the day when the company's shares are officially listed and begin trading on a stock exchange. This is typically several business days (3-6 days) after the issue date after processes like share allotment and finalization are completed. On this date, investors who were allotted shares during the IPO can begin selling them, and new investors can start purchasing them on the exchange at the prevailing market price. (Listing Date: Wednesday, April 3, 2024).
Face Value of Shares: The face value of shares in an IPO, also known as the nominal or par value, is a predetermined fixed price set by the company and mentioned in its memorandum of association. It represents the initial capital contributed by the founders and is used for accounting and regulatory purposes. During an IPO, shares are typically offered at a price higher than the face value, which includes a premium based on market demand and the company's performance indicators. (IPO Face Value: ₹10 per share).
Price Band: A price band of an IPO is the range of prices within which the investors can bid for the shares of a company that is going public. The price band is set by the issuer and the lead managers of the IPO, based on various factors such as the demand and supply of the shares, the financial performance and valuation of the company, and the market conditions. (IPO Price: ₹51 to ₹54 per share).
Lot Size: In an Initial Public Offering (IPO), the lot size refers to the minimum number of shares an investor can apply for. It is a pre-determined set of shares that investors must bid for, and applications must be in multiples of this lot size. The lot size ensures a standardized bidding process and helps in the fair allocation of shares among investors. (Lot Size: 2000 Shares).
Total Issue Size: The total issue size represents the total number of shares the company is offering to raise capital through the IPO. This number is determined by the company and its advisors, considering factors like their funding needs and the expected investor demand. The total issue size is then divided by the lot size to determine the total number of lots available for purchase by investors. (Total Issue Size: 4,068,000 shares (aggregating up to ₹21.97 Cr)).
Fresh Issue: A fresh issue of shares in an IPO refers to the creation and sale of new shares by a company to the public for the first time to raise capital. Unlike an Offer for Sale, where existing shareholders sell their shares, a fresh issue results in new funds going directly to the company, which can be used for various purposes such as expansion, debt repayment, or investment in new projects. This process dilutes the existing shareholding but does not provide an exit route for current investors. (Fresh Issue: 4,068,000 shares (aggregating up to ₹21.97 Cr)).
Issue Type: The type of an IPO can vary depending on the market and regulatory conditions. Some of the common types of IPOs are, Fixed priced IPO, Auction IPO, Book Building IPO, and Hybrid IPO. (Issue Type: Book Building IPO).
Listing At: An integral part of the IPO process is the listing. This refers to the day the company's shares officially begin trading on a stock exchange, such as the National Stock Exchange (NSE) or the Bombay Stock Exchange (BSE) in India. Once listed, anyone with a brokerage account can buy and sell the company's shares on the exchange. (Listing at: BSE SME).
Retail Shares Offered: This refers to the portion of the total shares being made available specifically for individual investors, distinct from institutional investors like banks or hedge funds. Regulatory bodies often mandate a minimum percentage of shares be reserved for retail investors, aiming to promote broader public participation in the capital markets. (Retail Shares Offered: 1,354,000 (33.28%)).
QIB Shares Offered: These shares are offered to institutions like mutual funds, insurance companies, foreign institutional investors (FIIs), banks, and other financial institutions registered with SEBI (Securities and Exchange Board of India). QIBs typically invest large sums of money, and SEBI regulations mandate a minimum investment amount for this category. Due to their significant investment power, QIBs are often allocated a minimum percentage (usually 50%) of the total IPO shares.(QIB Shares Offered: 774,000 (19.03%)).
NII (HNI) Shares Offered: NIIs are investors who are not QIBs or retail investors. They include high net-worth individuals (HNIs), corporate bodies, trusts, societies, etc., who bid for more than Rs 2 lakhs worth of shares in an IPO. NIIs can bid for up to 15% of the total shares offered in an IPO. NIIs have to pay 100% of the bid amount at the time of application. NIIs cannot bid at the cut-off price, which is the highest price at which the shares are allotted. HNIs are a sub-category of NIIs who bid for more than Rs 10 lakhs worth of shares in an IPO. (NII Shares Offered: 580,000 (14.26%)).
Market Maker Shares Offered: Market Maker Shares in an IPO refer to the shares that a market maker commits to buy and sell to ensure liquidity for the stock once it starts trading on the exchange. Market makers are typically brokerage firms that agree to hold a certain number of shares of the new issue to facilitate trading and provide stability to the stock price. They play a crucial role in the SME (Small and Medium Enterprises) segment, where they help in price discovery and improve the liquidity of stocks by providing two-way quotes. (Market Maker Shares Offered: 204,000 (5.01%)).
Competitors of Aspire & Innovative Advertising Limited
Aspire & Innovative Advertising Limited, a company operating in the dynamic field of advertising, faces competition from various players in the industry. Understanding the competitive landscape is crucial for stakeholders, investors, and clients who are looking to gauge the market position and strategy of Aspire & Innovative Advertising Limited.
One of the primary competitors identified is GRASIMPP, a significant player with a market capitalization of Rs. 2,119.89 crores. Although specific financial details such as net profit and total assets are not publicly available, the sheer size of the market cap indicates a strong presence in the industry.
Another notable competitor is Bajel Projects, with a market capitalization closely trailing at Rs. 2,116.15 crores. Like GRASIMPP, detailed financial metrics are not disclosed, but the market cap suggests substantial industry influence.
SJKHCCS stands out with a net profit of Rs. 184.31 crores and total assets amounting to Rs. 1,599.84 crores, showcasing a robust financial standing which can be indicative of competitive strength and stability.
The industry also sees competition from companies like Grameenext Private Limited, Inditrade Rural Marketing Limited (Boonbox), and Vishi Enterprises, which are mentioned as competitors in the market. These companies bring diverse strategies and product offerings to the table, adding to the competitive mix.
Additionally, firms such as Pasupati Acrylon Limited, Hexa Tradex Limited, Alps Industries Limited, Premier Mercantiles Limited, Ganesha Ecosphere Limited, and J.M.B.Commericial And Credit Limited are part of the broader industry in which Aspire & Innovative Advertising Limited competes. These companies vary in size and market approach, providing a comprehensive view of the competitive scenario.
It's important to note that the competitive dynamics in the advertising industry are influenced by various factors, including innovation, service quality, client relationships, and market penetration strategies. Aspire & Innovative Advertising Limited must navigate these challenges while leveraging its strengths to maintain and enhance its market position.
Conclusion
Aspire & Innovative Advertising Limited's IPO presents a compelling narrative of growth and strategic market positioning. With a robust increase in top and bottom lines over recent fiscal years, the company has demonstrated its ability to scale and maintain profitability. Operating primarily in rural and semi-rural areas, it has carved out a niche in the consumer durables market, offering a wide range of products from reputable brands. Despite the inherent risks associated with the IPO, which is characterized as a "High Risk/Low Return" investment, the company's asset-light business model and expansive network of intermediaries provide a solid foundation for potential medium-term rewards. Investors considering this IPO should weigh the company's financial performance, market strategy, and the risks involved, keeping in mind that well-informed, moderate investments could lead to favorable outcomes.
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Disclaimer: This is not an investment advisory. The article above is for information purposes only. Investments in the securities market are subject to market risks, read all the related documents carefully before investing. Please consider your specific investment requirements, risk tolerance, goal, time frame, risk and reward balance, and the cost associated with the investment before choosing securities, that suit your needs. The performance and returns of any equity stock can neither be predicted nor guaranteed.
FAQs
Q: What is an IPO?
An Initial Public Offering (IPO) is the process by which a privately held company offers its shares to the public for the first time. It allows the company to raise capital by selling shares to investors and get listed on a stock exchange.
Q: How can I apply for an IPO?
To apply for an IPO, follow these steps:
Open a Demat account with a registered Depository Participant (DP).
Choose the IPO you want to apply for.
Fill out the IPO application form through your broker or online platform.
Specify the number of shares you wish to apply for and the price range (if it’s a book-building issue).
Q: What is ASBA (Application Supported by Blocked Amount)?
ASBA is a payment method for IPOs where the bid amount is blocked in your bank account until the allotment process is complete. It ensures that you have sufficient funds to cover the shares you applied for.
Q: Can I make payments through UPI for an IPO?
Yes, you can use the Unified Payments Interface (UPI) to apply for an IPO. Many banks and brokers allow UPI-based payments during the IPO application process. Make sure your UPI ID is linked to your bank account.
Q: What is the difference between a fixed price issue and a book-building issue?
Fixed Price Method: The company determines a fixed price for issuing shares, and investors know the exact price before the IPO.
Book Building Method: The company offers a price range, and investors bid within that range. The final price is determined after the bidding process.
Q: What is the difference between the floor price and cut-off price in a book-building issue?
Floor Price: The lowest price at which an investor can bid within the price range.
Cut-off Price: An option where investors bid at the highest price (or cap price) without specifying a bid amount. They receive the allotment at the final determined price.
Q: What does ‘DP name’ mean in an IPO online form?
DP Name: It refers to the name of your Depository Participant (DP) with whom you hold your Demat account. You need to provide this information while applying for an IPO.
Q: What are the different investor categories in an IPO?
RII (Retail Individual Investor): Individual investors who apply for a small number of shares.
NII (Non-Institutional Investor): High-net-worth individuals, corporate bodies, and trusts.
QIB (Qualified Institutional Buyer): Institutional investors like mutual funds, banks, and foreign institutional investors.
Anchor Investors: Institutional investors who invest before the IPO opens for subscription.
Q: How is the allotment process done in an IPO?
The allotment process considers various factors, including investor categories, oversubscription, and the price at which bids are placed. The final allotment is based on demand and availability of shares.
Q: What happens if I don’t get the full allotment of shares in an IPO?
If the number of allotted shares is less than what you applied for, the excess funds are refunded to your bank account. You’ll receive the allotted shares, and any remaining funds will be returned.