IKIO is an integrated player providing original design manufacture (ODM) services in the LED lighting segment. The company’s LED lighting offerings focus on the premium segment and include lighting, fittings, fixtures, accessories and components. IKIO’s business segment includes LED lighting, refrigeration lights, ABS piping and other products. LED lighting contributes around 87 per cent to overall revenue.
The initial public offering (IPO) of IKIO saw strong demand with the issue subscribed 67.75 times. The institutional investor portion was subscribed 163.06 times, the high net worth individual (HNI) portion was subscribed 65.38 times, and the retail institutional investor (RII) portion by 14.31 times.
IKIO is mainly catering into premium lighting segments with “Signify (Philips)” being one of its largest clients. The company is also exploring export opportunities in the LED lighting/RV segments through new client additions.
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IKIO earned around 15 per cent (9MFY23) of its total revenue from exports (mainly to US) while the rest comes from the domestic market. Consolidated revenue grew at CAGR of ~23 per cent over FY20-22 led by LED lighting segment, which grew at CAGR of ~24 per cent during the same period. The EBITDA margin increased 600 bps to 23.3 per cent supported by savings in raw material costs and other costs. PAT grew at a CAGR of ~54 per cent to Rs 51 crore tracking EBITDA margin expansion.
High customer concentration, dependency on single product category, high dependency on imports for supply of raw materials and has a high working capital are key risks & concerns said analysts in IPO note.
IKIO has created its niche in functional decorative lights, commercial refrigeration lighting and recreational vehicles. Its ability to offer end-to-end solutions and its backward-integrated manufacturing have resulted in a strong business model with healthy RoEs despite operating on a smaller base than its peers, which cater mainly to the mass-market needs of leading brands, analysts at Anand Rathi Share and Stock Broker said in IPO note.