Magson Retail IPO: Date and Offer Price
Magson Retail and Private Distribution Limited, a leading player in the retail and distribution of frozen, gourmet, and specialty foods, is all set to launch its Initial Public Offer (IPO) to raise funds for expansion and business development. With an issue price of Rs 65 per share, the company aims to mobilize Rs 13.74 crore through the fresh issue of 21,14,000 shares. The IPO subscription will open on June 23 and close on June 27.
Expansion and Product Offering
In December 2021, Magson Retail introduced its premium product line, Rf Gourmet, featuring a range of delectable offerings such as French Fries, Chilli Garlic Potato Shots, Delhi Aloo Tikki, Veggie Burger Tikki, Chicken Seekh Kababs, and more. The company, which currently operates 26 stores across Maharashtra, Rajasthan, and Gujarat, also provides an online platform for customers to conveniently order and receive Magson products. Additionally, Magson owns a dedicated store called ‘My Chocolate World’ and manages its inventory from a warehouse in Ahmedabad.
Financial Performance
In the fiscal year 2022-2023, Magson Retail witnessed a remarkable growth in its revenue from operations, which recorded a 13 percent year-on-year increase, amounting to Rs 62.81 crore. The company’s net profit also exhibited a positive trajectory, rising by 12 percent to Rs 2.51 crore for the same period.
Competition and Unique Positioning
While Magson Retail does not have any direct listed peers, it faces competition from well-established retail supermarket chains like D-Mart, Big Bazaar, Reliance Retail, and Star Bazaar. Furthermore, the company encounters competition from prominent e-tailers such as Big Basket, Amazon Pantry, Blinkit, Jio Mart, and Swiggy Instamart, owing to their online sales channels and attractive schemes.
Potential Risks
One potential risk for Magson Retail is its relatively high inventory levels compared to sales, which could impact the company’s performance if sales projections are not met. Moreover, the company currently lacks alternative arrangements to fulfill its capital requirements. In the event of a funding shortfall and the inability to raise debt, the company’s operations may be adversely affected.
Utilization of IPO Proceeds
The funds raised through the IPO will primarily be allocated to expanding Magson Retail’s store network, establishing new storage facilities, and implementing backward integration strategies for food processing and packaging under the brand “MagSon.” The remaining proceeds will be utilized to address working capital needs and support corporate initiatives.
About Magson Retail:
Magson Retail operates in the retail and distribution sectors, specializing in frozen, gourmet, and specialty foods. In December 2021, the company launched its own line of high-quality products known as Rf Gourmet. This brand offers a range of items including French Fries, Chilli Garlic Potato Shots, Delhi Aloo Tikki, Veggie Burger Tikki, Chicken Seekh Kababs, and more.
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