C ELL POINT (INDIA) L IMI T E D 22 nd May 2023 IPO Details SUBSCRIBE Key Business Verticals of CAL Issue opens on 15 - 0 6 - 20 23 Issue closes on 20-06-2023 Exp date of Listing – 28 th June 2023 Listing – NSE Emerge Price band ₹ 100 Issue Size ₹ 50.34 Crs Face Value ₹1 0 /- Lot Size - 1200 Fresh Shares Offered – 50.34 lac shares. Retail Portion 23.91 lacs Equity Shares of ₹10.00 each at Rs 100 HNI/NII 23.91 l acs Equity Shares of ₹10.00 each at Rs 100 BRLMs: First Overseas Capital Ltd Cell Point (India) Limited (CPIL) incorporated in April 2013 is is engaged in multi-brand retail selling of Smart Phones, tablets, mobile accessories and mobile related products and allied accessories of various brands such as Apple, Samsung, Oppo, Realme, Nokia, Vivo, Xiaomi, Nokia, Redmi, Techno, One Plus, GIONEE, VIVO etc CPIL started as a small mobile retail business in Visakhapatnam, Andhra Pradesh. Over time, its operations expanded significantly, and which has expanded in to a network of 76+ retail stores throughout Andhra Pradesh CPIL also is engaged in retail selling of some of the consumer durable electronics goods, Air Conditioners, specifically, smart televisions of various brands such as Xiaomi, Realme and One Plus CPIL has built a trusted, high quality and reliable brand of choice over the last two decades & its products offerings can be classified in four major categories which include Smart Phones & Tablets, Smart Watches, Accessories & Smart TVs. The main promoters of CPIL are Mr. Mohan Prasad Panday and Mr. Bala Balaji Panday who who started as single small mobile retailers in Vizag, Vishakhapatnam, Andhra Pradesh in the year 2001. In 2013 CPIL took over the running businesses of Proprietary Concerns of the Promoters namely, M/s. Cell Point and M/s. Mobile King as a going concern with all of their respective assets and liabilities CPIL is now looking at raising Rs 50.34 crs via a fresh issue primarily to Repayment of certain borrowings, Repairs and Renovation of existing retail stores & setting of new retail stores; working capital & rest for general corporate purposes. CPIL is making a fresh issue of 50.34 lac shares of Rs 10 each with 23.91 lac shares reserved for the public, 23.91 lac shares to the Non-Institutional HNI category, with 2,52 lacs shares to Market Makers category. The shares will be listed on the NSE Emerge platform of National Stock Exchange (“NSE EMERGE”) C ELL POINT (INDIA) L IMI T E D CPIL’s Business offerings can be classified into four broad categories, namely, Smart Phones & Tablets, Smart Watches, Accessories and Smart TVs 1. Smart Phones and Tablets- CPIL sells a variety of smart mobile handsets of all major brands operational in India like Apple, Samsung, Realme, Oppo, Oneplus, Nokia, Vivo and Lava to name a few. We also sell Tablets/ Ipads of all major brands operational in India like Apple, Samsung, Lenovo, Xiaomi, Lenovo, Nokia and Realme to name a few 2. Smart Watches- CPIL offers a variety of smart watches of all major brands operational in India like Apple, Samsung, Realme, One Plus, Boat, Gizmore, Fitbit, Noise, GOQii Vital to name a few 3. Accessories- CPIL offers a variety of accessories for smart phones and tablets/ Ipads like Screen Guard, Memory, Card, Ear Pods, Mobile Charger, Mobile Covers, Collar Neck Bank, Bluetooth earplugs, Car Charger, speakers, power banks etc. from brands such as Apple, Samsung, Xiaomi to name a few 4. Smart TVs- CPIL offers a variety of smart TV of 3 major brands- Xiaomi, Realme and One Plus C ELL POINT (INDIA) L IMI T E D Smart Phones, Smart TVs and Smart Watches Industry Potential going ahead looking strong – Production of mobile phones in India has taken a leap after the government introduced the Phased Manufacturing Programme (PMP) and the Production Linked Incentive (PLI) scheme, reducing the country’s imports and dependency on China Increasing sales through online Channels: With COVID-19-induced lockdowns, sale of smartphones through online channels increased in 2020. According to IDC, online channels grew 12% YoY and contributed 48% to the total sales in 2020. However, during the festive season (Diwali), footfalls in physical stores picked up and offline channels clocked a 5% YoY growth in the fourth quarter of 2020 Increased usage of smartphones: Following the government curbs on social distancing and lockdown, there was a 39% rise in the average time spent by an Indian user on a smartphone Mobile Phones is the largest consumer device category globally, both in terms of unit shipment and value. It is the most ubiquitous devices in our lives with highest per capita penetration of any device. India has the potential to become one of the largest exporter of mobile phones in the world. Export value of mobile phones in India are likely to rise leading to a surge in demand. Moreover, the demand for smartphones is estimated to surge manifold by 2025 resulting in an increase in domestic production due to the PLI scheme and favourable government initiatives, which are likely to brand India as a competitive land for electronics manufacturing. C ELL POINT (INDIA) L IMI T E D Globally recognized companies such as Foxconn, Samsung, Hon Hai, Rising Star, Pegatron and Wistron view India as a potential market to expand their smartphone manufacturing capabilities. Foxconn, Wistron, Pegatron and Samsung have inked the PLI scheme with the government to make India a global electronics hub. Furthermore, Foxconn, Wistron and Pegatron submitted applications for a US$ 6.65 billion scheme to enhance local smartphone production With 320 million feature phone users, the market presents a huge opportunity. With Reliance Jio set to launch a low cost smartphone, migration of more and more feature phones to entry-level smartphones is inevitable. If the low-cost phone is a success, the Indian smartphone market will enter a hyper growth phase The other growth trigger could be 5G, which is touted as the next battleground for phone manufacturers as well as telecom service providers in India. With flat sales for the past couple years, the Indian market, with a large untapped millennial population, presents an attractive opportunity for industry players Retail Formats in India – C ELL POINT (INDIA) L IMI T E D CPIL is raising growth capital via the proposed public issue to cater to the following requirements, This includes the following. Repayment of certain borrowings Repairs and Renovation of existing retail stores & setting of new retail stores To meet the Working Capital requirements General Corporate Expenses CPIL’s Key Competitive Strengths Experienced Management Team – Both the Promoters, Mohan Prasad Panday and Bala Balaji Panday lead the company with their vision and have an experience of more than 17 years in the line of the business of retail Strategic Location Benefit – Majority of the company’s stores are located in the Visakhapatnam, Costa, Vijayawada and Rayalaseema Zones. The stores are strategically located in areas of high foot traffic drawing customers at all times of the day, on weekdays and weekends Good network of stores all over Andhra Pradesh which offers One-Stop Solution – CPIL sells its products through total 75 stores across the districts of Andhra Pradesh for sale of Smart Phones, Smart Watches, Smart TVs and other accessories. Out of the 75 stores, 2 stores are owned properties and 73 stores are on properties. The leased company intends to open 5 more new stores in Vishakhapatnam & its widespread network provides it with a wide geographical presence in terms of coverage of districts of Andhra Pradesh. Also going ahead CPIL plans to set up its retail network to Telangana and Bihar to further broadbase its business ahead Financials – 31st March (₹) Cr. FY20 FY21 FY22 9mthFY23 Total Revenue 277.56 223.01 269.16 220.74 EBIDTA 9.3 7.56 10.69 13.81 EBIDTA % 3.35 3.39 3.97 6.26 PBT 2.39 1.27 2.43 8.11 Profit After Tax 1.6 0.69 1.65 5.8 EPS Rs 14.04 6.05 14.47 4.25 Shareholders’ Funds 11.02 11.71 13.36 19.17 Source - Company C ELL POINT (INDIA) L IMI T E D Risks- CPIL operates in a rapidly emerging and changing industry. Any new technology changes can disrupt the market and hence CPIL will have to be careful in selecting the right product in all its product categories Also, business conditions in the Telcom products segment are very competitive. Our View on This IPO Cell Point (India) Limited, which is tapping the SME IPO market, enjoys a strong track record of ramping up its turnover in the last two years & building strong business relationships with its customers across its retail outlets which has helped it significantly scale its business operations in the offline market CPIL enjoys a business model which is scalable. The biggest positive CAL enjoys is that it is a fully Indian-grown B2C retail chain enjoying a good brand recall with customers Apart from this, the growing adoption of digital solutions due to the increasing penetration of high- speed internet connectivity in India is creating a positive market outlook. This, along with the widespread use of smartphones, laptops, and tablets, has facilitated increased sales for CPIL The increasing reliance of individuals on social media platforms also offers numerous opportunities for companies like CPIL which sell mobile and mobile accessories. All these developments indicate that growth opportunities for CPIL look strong and promising ahead. More importantly, CPIL’s promoters have significant industry experience and have been instrumental in the company's consistent growth. The management team's combined expertise and experience are also a significant asset going ahead. We are positive on CPIL for the long term as India's Smart Phone & Smart Watch market offers a massive runway for growth over the next 3-5 years ahead. More importantly, the company also plans to move in to new states like Bihar & Telangana which will generate more revenues going ahead After the proposed IPO, the company’s net worth will total Rs 64.47 crore; post-IPO, the equity capital will stand at Rs 18.68 crore. We are confident that Cell Point (India) Limited will deliver consistent performance and provide an excellent investment opportunity for investors with a long-term horizon. Hence, we recommend SUBSCRIBE for long-term investment