Magson Retail & Distribution LTD IPO | Review, Peer Comparison, Valuation & GMP

Magson Retail And Distribution Limited - Complete Overview

Magson Retail and Distribution Pvt. Limited, established in 2018, operates in the retail and distribution sectors, specializing in gourmet, frozen, and specialty foods. 

Its operations are based out of a 14,000 sq. ft. rented warehouse in Ahmedabad. With a total of 26 retail stores across various Indian cities like Thane, Rajkot, Udaipur, Jamnagar, and 13 outlets in Ahmedabad, Magson Retail and Distribution Limited has established a strong presence.

Out of the 26 stores, 16 are operated directly by the company, while 7 are managed by franchise owners, and 3 operate under two joint ventures. All the stores operate under the registered brand name 'MagSon'. By procuring 75% of their products directly from manufacturers, the company eliminates intermediaries, allowing them to earn higher profits. The remaining 25% is sourced from wholesalers or distributors.

In addition, the company adopts a franchise model to facilitate the expansion of its business operations. The Magson franchise cost in India is Rs. 10 lakhs, which remains valid for a period of 3 years. After the initial 3-year period, the fees will be renewed at Rs. 1 lakh plus GST for the subsequent 3 years.

In December 2021, the company also introduced its own brand called Rf Gourmet, offering premium products such as French fries, Delhi Aloo tikki, veggie burger tikki, eggs, and more. This move allows Magson Retail and Distribution Limited to expand its product range and cater to the growing demand for high-quality food products.

With a strong retail presence and a focus on direct procurement from manufacturers, Magson Retail and Distribution Limited is well-positioned to thrive in the gourmet and specialty food market.

 

What does the company do?

Magson Retail and Distribution Limited specializes in the retail and distribution of gourmet, frozen foods, and specialty foods. To further enhance their offerings, they have created their own brand known as Rf Gourmet, which exclusively features a range of high-end gourmet products.

 

Company Products

Magson Retail and Distribution Limited offers a diverse product portfolio that spans various categories. Their range includes frozen food options in both vegetarian and non-vegetarian varieties, premium cheeses, dairy products, exotic fruits and vegetables, ambient products, imported luxury chocolates, and a selection of imported packaged goods.

Under their registered brand, Rf Gourmet, the company also presents a collection of premium gourmet products, including French Fries, Fiery Fries, Chilli Garlic Potato Shots, Delhi Aloo Tikki, Chunky Fries, Eggs, and Chicken Seekh Kababs. 

 

 

IPO Overview

Magson Retail and Distribution Limited is gearing up for an upcoming SME IPO. SME IPOs are specifically designed for small and medium enterprises with lower asset values, revenue, and employee numbers compared to larger corporations. These enterprises can opt for platforms like BSE SME or NSE Emerge for their initial listing, enabling them to raise funds and expand their business operations.

Magson Retail and Distribution Pvt. Ltd. plans to raise capital through their IPO, with a total worth of Rs. 13.74 crore. The IPO subscription period is scheduled to be open from 23rd June to 27th June.

Each share in the IPO has a face value of Rs. 10, and the price band is set at Rs. 65 per share. The lot size for the IPO is 2000 shares, and retail investors are eligible to apply for a maximum of 1 lot.

The listing of the IPO is anticipated to take place on 6th July 2023. As part of the offering, 50% of the shares are reserved for retail investors, providing them with an opportunity to participate in the IPO. 

 

Magson Retail And Distribution Limited IPO timetable

Events	Dates
IPO Opening Date	Friday, 23 June 2023
IPO Closing Date	Tuesday, 27 June 2023
IPO Allotment Date	Monday, 03 July 2023
Refund Initiation	Tuesday, 04 July 2023
IPO Listing Date	Thursday, 06 July 2023

 

Magson Retail And Distribution Limited IPO Details

IPO opening & closing date	23 June 2023 to 27 June 2023
Listing Date	July 6, 2023
Face Value	Rs 10 per share
Price	Rs 65 per share
Lot Size	2000 Shares
Price of 1 Lot	130,000
Issue Size	2,114,000 shares
Offer for sale	NA
Fresh Issue	2,114,000 shares
Listing at	NSE SME
Issue Type	Fixed price issue IPO
Registrar	Bigshare services

 

Magson Retail And Distribution Limited IPO Lot Details

Application	Lots
Minimum Lot Investment (Retail)	1 Lot
Maximum Lot Investment (Retail)	1 Lot
Maximum Lot Investment (HNI)	2 Lots

 

Magson Retail And Distribution Limited IPO Reservation

Institution portion	NA
Non-institution portion	NA
Retail portion	50%

 

Company Financials

 Amount in Lakhs

Period	FY-21	FY-22	FY-23
Total Assets	1,283.84	1,494.69	1,999.87
Total Revenue	5,358.92	5,566.77	6,301.49
Net Profit	181.75	223.36	251.88
Net Worth	350.80	574.06	926.25
Reserve & Surplus	349.80	573.06	325.65
Total Borrowing	386.60	344.72	321.95

 

Objective of the Issue

Through their upcoming SME IPO, Magson Retail and Distribution Limited aims to utilize the raised capital for various purposes, including opening new stores under the franchise model and establishing strategic partnerships with major suppliers. 

The funds will also contribute to fulfilling their working capital requirements and supporting general corporate activities. 

By embarking on this IPO Magson Retail and Distribution Limited aims to strengthen their market position and pave the way for sustained growth and success in the retail and distribution industry. 

 

Promoters and Management of Magson Retail And Distribution Limited

Magson Retail and Distribution Limited is under the capable leadership of Mr. Rajesh Emmanuel Francis and Mr. Manish Shivnarayan Pancholi, who serve as the key Promoters of the company. With their extensive industry experience, they play instrumental roles in managing and driving the company forward.

Before the upcoming IPO, Mr. Rajesh Emmanuel Francis and Mr. Manish Shivnarayan Pancholi collectively hold 95.89% of the company's shares. However, after the Issue, their shareholding will be adjusted to 70.06%. 

 

Peer Comparison

Magson Retail and Distribution Limited operates in a competitive market where it encounters several rivals. Some of its competitors include AG Universal Ltd., AA Plus Trade Link Ltd., Aafloat Textiles Ltd., DCX System Ltd., Datar Switchgear Ltd., and others. These companies vie for market share and strive to attract customers in the same industry segment. Magson Retail and Distribution Limited must navigate this competitive landscape by leveraging its strengths, unique offerings, and strategic initiatives to differentiate itself and maintain its position in the market.

 

IPO's Valuations

Magson Retail and Distribution Pvt. Ltd IPO valuation stands at an impressive Rs 13.74 crores, showcasing its potential for growth and investment opportunities. Each share holds a face value of Rs 10, offering investors a clear indication of the company's underlying value.

 

Dividend Policy

While the company has not disclosed its dividend policy at present, it intends to unveil its plans for dividend distribution in the future, taking into consideration the company's financial performance.

 

IPO's Strengths 

• Diverse product range

• Strong store visibility

• Successful capture of a significant retail market share

• Professional and well-trained employees

• Experienced Promoters

• Utilization of a franchise model for expansion

• Effective supply chain management

• Cost-effective operations

• Reliable and efficient distribution network

• User-friendly mobile app for convenient online shopping

• Effective and well-executed marketing strategy

 

IPO's Weakness

• Competition from well-established players
• Limited presence in top cities of India
• Ensuring consistent quality across all outlets
• Balancing cost-effective operations with customer satisfaction
• Dependency on external suppliers
• Limited online presence

 

 

IPO GMP

The Last GMP of the IPO was -1.

 

Conclusion

Magson Retail and Distribution Limited holds a robust position in the retail and distribution sector, backed by its strong market presence. The company's sound financial standing further enhances its appeal as a potentially secure investment option. Nevertheless, it is advisable to conduct a comprehensive analysis of all relevant factors before finalizing investment decisions. Additionally, awaiting the GMP price can provide valuable insights, enabling investors to make more informed and calculated choices regarding their investments.

 

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