Magenta Lifecare Limited IPO: Review, Valuation, Date & GMP

Magenta Lifecare Limited IPO - Complete Overview

Magenta Lifecare Limited, founded in 2015, is a mattress and pillow manufacturer based in Gujarat, India. 

They market their products under the "Magenta" brand and offer a wide variety of sleep solutions. This includes memory foam, latex, and spring mattresses alongside memory foam and contour pillows. The company also imports and distributes processed raw foam and adjustable bed frames under its brand.

Magenta utilizes a multi-channel distribution strategy, selling through brick-and-mortar stores, a network of dealers, and online e-commerce platforms.

Their manufacturing facility boasts a production capacity of 60,000 mattresses and 70,000 pillows annually. 

With a team of 41 skilled and unskilled workers, Magenta primarily caters to retail customers, hotels, and institutions.

 

 

Magenta Lifecare Limited IPO Overview

Magenta Lifecare Limited IPO date is slated to be open for subscription from June 5, 2024, to June 7, 2024. This BSE SME IPO follows a Fixed Price Issue IPO.

Magenta Lifecare Limited IPO price is fixed at Rs.35 per share. 

The total issue size of this IPO amounts to Rs.7.00 Cr. The company has allocated shares 50% to retail investors and 50% to other investors.

 

Company Financial

Compared to the financial year ending March 31, 2023, and March 31, 2022, Magenta Lifecare Limited has seen growth in total revenue and net worth but a decrease in total assets. The profit after tax has increased while the total borrowing decreased.

Amount in Lakhs

Period	31 Dec 2023	31 Mar 2023	31 Mar 2022
Total Assets	1,505.71	1,250.93	1,415.60
Total Revenue	630.74	955.29	938.47
PAT	24.36	24.55	18.89
Net worth	634.18	520.81	361.73
Reserve & Surplus	147.19	366.57	219.72
Total Borrowings	447.83	453.01	757.53

 

Product-wise Revenue Breakup

(Amount in Lakhs)

Name of Products	December 31, 2023	Fy 2023	FY 2022
Mattress	221.54	491.96	462.62
Pillow	349.73	11.82	12.11
Raw Foam	6.54	302.64	395.73
Hydraulic Bed	10.97	63.4	36.01
Other Products	13.05	36.79	17.93
Total Rs.	601.83	906.61	924.4

 

 

Geography-wise Revenue Breakup

(Amount in lakhs)

Geography	December 31, 2023	Fy 2023	FY 2022
Andhra Pradesh	3.52	2.26	4.31
Assam	-	-	0.11
Chattisgarh	49.40	63.53	45.75
Dadra and Nagar Haveli	-	-	-
Delhi NCR	-	-	0.74
Gujarat	409.78	547.49	637.77
Haryana	2.82	2.22	1.91
Jharkhand	-	-	0.19
Karnataka	36.24	61.01	35.04
Kerala	0.55	0.68	0.64
Madhya Pradesh	13.27	15.5	10.78
Maharashtra	20.30	82.2	83.47
Rajasthan	31.50	89.6	90.28
Tamil Nadu	6.38	8.57	5.14
Telangana	2.04	7.69	2.63
Uttar Pradesh	25.44	25.86	5.51
West Bengal	-	-	0.13
Total Rs.	601.83	906.61	924.4

 

Segment-wise Revenue Breakup

(Amount in Lakhs)

Name of Products	December 31, 2023	Fy 2023	FY 2022
Online	0.48	0.88	0.78
Offline	600.75	905.73	923.62
Total Rs.	601.23	906.61	924.4

 

 

The Objective of the Issue

The Company proposes to utilize the Net Proceeds to fulfil the following objectives:

1. Funding working capital requirements.

2. General corporate purposes.

 

Peers of Magenta Lifecare Limited IPO

Name of the Company	Face Value (Rs)	EPS (Rs)	P/E Ratio
Magenta Lifecare Limited	10	0.53	65.97
Sheela Foam Limited (Consolidated basis)	5	20.81	44.65
Tirupati Foam Limited (Standalone Basis)	10	4.31	17.85

 

Evaluation

The IPO is priced at Rs.35 per share.

Evaluation of P/E Ratio

• Considering the FY23 EPS of Rs 0.53 from the last year, the resulting P/E ratio is 65.97x.

• Taking into account the weighted EPS of Rs 0.50 for the last three years, the P/E ratio amounts to 69.71x.

Comparative Analysis with Listed Peers

• The industry's average P/E is 31.25x.

As a result, the IPO price range, with a P/E ratio ranging from 65.97x to 69.71x, seems aggressively priced to the industry average of 31.25x.

 

IPO's Strengths

• Diversified customer base and long-standing relationships.

• Extensive and well-developed pan-India sales and distribution network.

• A diversified product portfolio caters to a broader range of customers.

• Promoter Directors with extensive domain knowledge provide strong industry expertise and guidance.

• Quality assurance and accreditations demonstrate commitment to product quality and adherence to standards.

 

IPO's Weaknesses 

• The company need to obtain, renew or maintain permits, licenses, and approvals to operate its business.

• The company faces a challenging competitive environment with factors beyond its control.

• Past issues with delayed compliance or errors raise concerns about future adherence to regulations.

• Ongoing litigation and claims may impact the company financially and reputationally.

• The company has had Negative cash flow from operations and investment activities.

 

 

IPO GMP Today 

The latest GMP of Magenta Lifecare Limited is Rs. 28.

 

Magenta Lifecare Limited IPO Timetable (Tentative)

Magenta Lifecare Limited IPO is scheduled from June 5 to June 7, 2024, with allotment on June 10, refund initiation on June 11, and listing on June 12, 2024.

Events	Date
IPO Opening Date	June 5, 2024
IPO Closing Date	June 7, 2024
IPO Allotment Date	June 10, 2024
Refund initiation	June 11, 2024
IPO Listing Date	June 12, 2024

 

Magenta Lifecare Limited IPO Details 

Magenta Lifecare Limited IPO, with a face value of Rs.10 per share, opens on June 5 and closes on June 7, 2024, offering 2,000,000 shares at Rs.35 per share, with a lot size of 4000 shares, aiming to raise Rs. 7.00 Cr, and will be listed on BSE SME.

IPO Opening & Closing Date	June 5, 2024 to June 7, 2024
Face Value	Rs.10 per share
Issue Price	Rs.35 per share
Lot Size	4000 Shares
Price of 1 lot	Rs.140,000
Issue Size	2,000,000 shares (aggregating up to Rs.7.00 Cr)
Offer for sale	NA
Fresh issue	2,000,000 shares (aggregating up to Rs.7.00 Cr)
Listing at	BSE SME
Issue Type	Fixed Price Issue IPO
Registrar	Cameo Corporate Services Limited

 

 

Magenta Lifecare Limited IPO Lot Details 

For Magenta Lifecare Limited IPO, the retail investor minimum and maximum lot investments are both 1 lot (4000 shares) at Rs.140,000 while for HNI investors, the minimum investment is 2 lots (4000 shares) at Rs.280,000.

Minimum Lot Investment (Retail)	1 lot
Maximum Lot Investment (Retail)	1 lot
Minimum Lot Investment (HNI)	2 lot

 

Magenta Lifecare Limited IPO Reservation

Other Investors share Portion	50%
Retail Investors share Portion	50%

 

 

Promoters and Management of Magenta Lifecare Limited

• Divyesh Modi 

• Khyati Modi 

Pre-issue Promoter shareholding	84.06%
Post-issue Promoter shareholding	59.59%

 

Magenta Lifecare Limited IPO Lead Managers

• Fedex Securities Pvt Ltd 

 

Dividend Policy

The company has not declared any dividend on the equity share since incorporation.

 

Conclusion

The company operates in a competitive segment and has previously reported negative cash flow. Additionally, the company's financial performance is inconsistent. Experienced investors may apply for the upcoming IPO to gain long-term profits. 

 

 

Finowings IPO Analysis

Hope you enjoyed the Finowings IPO Analysis. We tried our best to give every required detail about the company that you should know before applying to the IPO. 

You must consult your financial advisor before making any financial decisions. 

To Apply for the IPO, Click Here.

 

To Read the Prospectus of the Company Click Here to Download the DRHP.

 

 

Disclaimer: This IPO analysis is only for informational purposes and should not be considered as investment advice. Always do your research and consult with a financial advisor.

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