Balaji Solutions Limited IPO 

Last Updated on October 10, 2023 by BFSLTeam BFSLTeam

Have you always wished to invest in hardware and mobile accessories but didn’t find the right company? Balaji Solutions Limited (BSL) has recently filed its papers with SEBI for launching its IPO. This company has been operating in the IT hardware and mobile accessories sector since 2001 and holds good potential for growth in the future.

According to the latest reports, Balaji Solutions Limited has obtained an observation letter from SEBI. Thus, it has got the green signal from the market regulator to float its initial share sale. The company is yet to announce a launch date.

Go through this blog to learn some of the important details about Balaji Solutions Limited IPO.

About Balaji Solutions Limited 

The journey of Balaji Solutions Limited started in 2001 under the able leadership of Rajendra Sakseria. In the initial years, the business started as a sub-distributor. Gradually, the company went off to establish a channel network.

Balaji Solutions is an IT hardware and peripherals and mobile accessories company focused on manufacturing and branding products under its flagship brand ‘Foxin. It’s also engaged in the business of manufacturing original equipment 

and its operations range from sourcing components, designing/ideating, manufacturing and quality testing according to the guidelines provided by brand owners. 

Moreover, Balaji Solutions is also engaged in the business of distributing IT hardware and peripherals, consumable and surveillance products, mobile accessories and products of certain brand owners. 

In the coming days, Balaji Solutions aims to strengthen its business via effective branding, digital marketing and promotional activities. It aims to increase its presence in the domestic market, thereby targeting new customers. The company also plans to increase its presence in the international arena. 

Balaji Solutions Limited IPO Objectives & Details 

Balaji Solutions Limited has filed a Draft Red Herring Prospectus (DRHP) with the market watchdog Securities and Exchange Board of India (SEBI). The IT hardware and mobile accessories company aims to raise Rs. 120 crore through a fresh issue of shares for its IPO.

Balaji Solution’s Offer for Sale (OFS) comprises 75,00,000 shares by promoters. Rajendra Seksaria, a promoter, is offering up to 15,00,000 equity shares. The promoter group Rajendra Seksaria HUF is offering up to 60,00,000 equity shares. The OFS may also include a reservation of shares by eligible employees. 

Balaji Solutions Ltd will use up to Rs. 87 crore from its IPO to fund working capital requirements and general corporate purposes. Moreover, the company may even take into consideration a pre-IPO placement of Rs. 24 crore if it’s advised so by its merchant bankers. If such is the situation, there will be a significant reduction in fresh issue size.

BSL has a manufacturing facility located in Howrah, West Bengal in a strategic position near the Kolkata-Mumbai highway. It aggregates up to a total installed capacity of 216 lakh units in the financial year 2022. Looking at the data till June 30, 2022, we will find that Balaji Solutions sells its products across 28 Indian states and five Union Territories through a network of 3,726 dealers.

Also Read: IPO investment strategy

Strengths 

Analysing the qualitative factors of Balaji Solutions will help you understand whether investing in its IPO will be lucrative in the long run or not. Check the strengths of Balaji Solutions: 

• The company has been operating in the electronics industry for two decades. As a result, it has gained a rich experience which has helped it cement its position in the industry. 
• Balaji Solutions boasts quite a diversified business vertical and offers its customers a wide range of products. A consistent focus on quality provides it with a competitive edge.
• A noteworthy factor is that the company has been successful in establishing strong relationships with its customers. Balaji Solutions has always been focussed on establishing a strong distribution network which has helped it build and maintain strong relationships with its customers.
• Balaji Solutions has an integrated manufacturing facility which has been instrumental in its consistent delivery of quality products. 
• Skill and knowledge are important contributors to success and it’s not any different with Balaji Solutions. Its promoters and senior management team members are very experienced and have extensive knowledge of the hardware and mobile accessories sector. 

Risks Involved 

You need to take into account the risks involved with investing in the Balaji Solutions IPO. It’s important as it will help you understand whether the investment is aligned with your risk tolerance or not.

• The business in which Balaji Solutions is engaged is reliant on product distribution of brand owners. If there’s a decrease in the supply of products or if there’s a loss of one or more brand owners, it might hurt the business including its financial condition, operations and cash flow.
• Balaji Solutions depends on third parties in India and China to manufacture some of its branded products. Suppose these third-party manufacturers are not willing to manufacture the products of Balaji Solutions or fail to meet its exact business requirements. In such a situation, the business of Balaji Solutions will be harmed greatly. 
• Balaji Solutions depends on its dealers for sales and distribution of Foxin products and products owned by other brand owners. If the dealers associated with this company are unable to sell and distribute its products effectively, the business of Balaji Solutions will suffer.

Also Read: How does an IPO work?

Summary

Balaji Solutions Ltd has got the go-ahead from the regulator to float a Rs. 120 crore fresh issue and an OFS of 75 lakh equity shares. It is yet to announce the launch date, listing date, issue price and lot sizes for this IPO. You can keep checking here to know the latest details of the Balaji Solutions Limited IPO. Go through its strengths, risks and IPO details to make an informed investment decision. 

Also Read: How To Apply For An IPO?

Balaji Solutions Limited IPO FAQs