#RashiPeripherals lists on the bourses at 9.16% premium against #IPO Price.
MD Kapal Pansari and CFO Himanshu Shah discuss plans for the proceeds and more, in conversation with Saloni Kothari.
Read: https://bit.ly/3UDJQPK
MD Kapal Pansari and CFO Himanshu Shah discuss plans for the proceeds and more, in conversation with Saloni Kothari.
Read: https://bit.ly/3UDJQPK
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TVTranscript
00:00 Rashi Peripherals Limited has listed today on the stock exchanges after being subscribed
00:04 over 60 times last week. I am joined by the management, Mr. Kapil Pansari, who is the
00:08 MD and CEO, and Himanshu Shah, who is the CFO. Thank you so much, gentlemen, for taking
00:13 out the time to talk to us and congratulations on the listing. Let me start by asking that
00:16 obviously your issue was of the fresh issue and you have said that you will be using it
00:20 for borrowings, repayment of borrowings. So if you could help us understand your borrowings,
00:25 you know, the debt and the borrowings that you have and how much will you be repaying
00:28 if you have any breakdown for that? We have borrowings of working capital on our
00:33 balance sheet and 54% of the issue proceeds will get utilized to repay that. Total borrowings
00:42 on our books is in the range of 1000+ crores and we will be paying roughly around 326 crores
00:47 out of these issue proceeds. So which means you still have significant debt,
00:52 you know, in your books and how do you plan to eventually, you know, bring it down as
00:58 well? Because will you be going for more funding for that matter or how do you plan to help
01:02 that? So our business requires working capital to
01:05 great extent. There are three components to working capital. When we buy goods, we buy
01:10 on credit and then we hold them in inventory. We distribute them to our 50 warehouses and
01:15 50 branches across the country and that reaches to 680 towns to more than 9000 customers across
01:22 the country. When we sell to the customers, we sell on credit. We are a B2B player and
01:27 therefore we use a debt to equity ratio very prudently to grow our organization and that's
01:34 where when we raise this capital, it will increase our ability to be able to churn revenues
01:40 using these working capital cycles. Alright. Can you also help us understand since
01:44 you have partnered and you have lot of distribution partners as well especially with the local
01:48 as well as global technology brands. If you give us a profile as to how much they stand
01:53 as least as of last quarter. I know you can't give out the numbers but just to understand
01:57 if that's been expanded and you know what happens, you know, what categories technically
02:02 have been contributing more to your revenue? Yeah. So very good question. So I'll ask you
02:07 with our customer profile. We have three go to market strategies for all our technology
02:12 products that we work with. One is the online e-commerce players where we sell to these
02:19 e-commerce like Amazon, Aparios, Flipkart of the world. They list the product and they
02:23 sell to the customers. The second biggest category is the LFRs, modern trades like Widget
02:30 Sales, Reliance, Chromas of the world where these are large format retails and customers
02:36 come and directly buy from these stores. The third which is the largest in our portfolio
02:41 is the general trade. So places like Lamington Road in Bombay, Nehru Place in Delhi etc are
02:47 cluster markets for our IT which forms the majority share of our product line. Because
02:53 IT is a consultative product. It requires understanding of technology and the need of
02:59 every user is very different. So therefore the general trade continues to play an important
03:04 role in the overall ecosystem of the IT sales. The second out of this we have two business
03:11 categories. One is lifestyle and IT essentials which is our core and the base of our organization
03:18 where we started off. So products like CPU, motherboard, pen drives, hard drives. The
03:24 second category is PES, personal computing, enterprise and cloud solutions which is just
03:30 formed about last 10 to 12 years ago and this contributes about 56% of our revenue. This
03:37 is the largest revenue and the growth engine that will come from this segment.
03:40 Alright, my next question is to you Manju. I mean your gross margins have been somewhat
03:45 low, right? So could you help us understand, clarify how that has been and how you are
03:49 trying to kind of ensure that kind of growth? See our gross margins are at the industry
03:55 standards and we feel that this industry is a matured industry with defined margins and
04:01 we are operating at the industry benchmarks or even little bit above that.
04:08 You know, I know that you cannot comment on the financials that obviously have been out
04:12 but just if you do have any targets in mind or any guidance that you keep in mind for
04:16 the, you know, for at least for that annual year that we have to ensure that we reach
04:20 that much and if that is the case, could you help us understand?
04:23 So I will give you two answers on this one. One is that Rashi Peripherals, for the last
04:27 20 years we have been growing at a CAGR of 23%. We have maintained a track record that
04:32 is sustainable and robust in the ecosystem. The second is that currently since you asked
04:37 about the targets and market, though we are not privy to share due to regulatory issues
04:45 but the demand for technology products remains robust and because of that there is good uptake
04:51 in the commercial and the retail markets put together. Though we are unable to share the
04:55 financials or the results but we will be soon declaring our results post listing in the
05:00 given time frame by the regulators and that is all.
05:06 Right, right. One last question, you know, since yours is a very growing business as
05:11 you mentioned, any expansion plans or any new product offerings or how do you plan to
05:15 go to the next step, you know, even after listing? Any plans that you have in mind at
05:19 least for the next two to three years?
05:21 So our product portfolio that is there, we have chosen that very consciously and it caters
05:28 to our customer base favourably. We are not looking at drastically changing this cart
05:34 of product portfolio but we will continue to keep evaluating our customer needs, new
05:39 technologies that keep evolving to add to our portfolio so that both customers and us
05:44 will benefit in the long run.
05:45 Alright, thank you so much gentlemen for taking out the time to talk to us.
05:49 Thank you.
05:49 [Music]