Epack Prefab IPO subscriptions 100% full on day-3:’Will make big money for investors in the long term,’ says company MD

The company Epack Prefab Technologies Limited, which manufactures pre-designed steel buildings and prefabricated structures, has launched its IPO. The public issue, which opened on September 24, has been subscribed 100% by day-3 on Friday, September 26, which is the last opportunity for retail investors to invest in it. Epack has set the IPO price band at ₹194 to ₹204. Retail investors can bid for a minimum of one lot, which is 73 shares. For this, an investment of ₹14,892 will be required. A maximum of 13 lots can be applied for. The company manufactures items like columns, rafters, and beams in its manufacturing units, separate from the construction site. Then it only assembles them at the construction site. This saves time and reduces costs by approximately 20%. Modern construction, multi-level car parking, and warehouses are being built using this method. Every kind of modification is possible in this. Read the full interview of the company’s MD Sanjay Singhania… Question 1: What are the main growth drivers in the prefab construction sector in India and how has Epack established its place in this sector? Answer: The prefab industry has grown at a CAGR of 8% to 10% over the past four to five years. However, we have achieved an average annual growth of 55% each year. This is 5 to 6 times faster compared to the industry’s growth. This growth was possible because we have established three design centers in Noida, Hyderabad, and Isaac, where 110 industry experts work. We have three design centers in Greater Noida, Rajasthan, and Andhra Pradesh, with a capacity of 135,000 tons. After the IPO, this capacity will increase to 170,000 tons. Additionally, we have insulated sandwich panel walls, which are used for wall construction. With this, a 200-400 feet wall can be built in just one day, which could take several days using traditional methods. A single painting of this panel lasts for 25 years. Due to the insulation, the electric consumption of AC in buildings made with this is reduced by about 20%. We have a plant with a capacity of 10,000 tons in Greater Noida for making sandwich panels. In Mambattu, Andhra Pradesh, we built a plant with a capacity of 8 lakh square meters in June. We are now going to set up a plant with a capacity of 8 lakh square meters in Rajasthan. After the money comes from the IPO, our total capacity will be 21 lakh 10 thousand square meters. We started in 1999 and since then we have completed more than 7400 projects. Question 2: Where will the funds received from the IPO be used? Answer: This IPO is worth ₹504 crore. Out of this, ₹204 crore are being sold by the company’s promoters through OFS. ₹300 crore are coming to the company. Out of this, ₹160 crore will be for capex. With which we will fulfil following objectives: Question 3: How will the company accelerate its growth further? We have funds for this year. The money received from the IPO (for capex) will be used by the company from the second half of next year. Our asset turn is 4.5 times. This means that if we invest ₹100 crore, we can generate ₹450 crore in revenue. So if we are investing ₹160 crore, we can earn approximately ₹750-900 crore in revenue. Question 4: What value will investors get in terms of long-term growth in the vertical of sustainable construction and EPS packaging business after listing? Answer: Last year (FY25) our net profit was ₹59 crore, which is 38% more than the previous year. But even better has been our ROE and return on capital employed. Both have been above 22%. If this is more than 15%, it is considered quite good in the market. We will also keep it above 20% going forward. There might be some decline in this financial year, but next year when we invest the IPO money into the business, it will gain momentum again. This allows us to provide any investor with good returns. Question 5: There are competition and supply chain challenges in this sector. How is Epack facing these challenges? Answer: The prefab market is growing rapidly. According to CRISIL’s report, the growth of this sector will reach 12% to 15% in the future. During this time, our growth will be 5-6 times faster than the market. This is because we have a dedicated management team that works solely for growth. Our company has a team of about 3,000 people. This includes about 880 staff and more than 2,000 workers. We work on design and marketing in every major city in India. We are using AI in our business. This has made our work faster and more accurate. All these things give us more advantage in market competition. Question 5: What is the strategy for entry into export markets (overseas projects)? Answer: We export to the Middle East, Africa, and SAARC countries like Nepal and Bangladesh. But this is only 1% of the total business. The reason for this is that until now our manufacturing units were only in North India, making access to ports expensive and difficult. But after the plant is built in Andhra Pradesh, we are just 60 kilometers away from Chennai port. This allows us to increase our exports. However, it will take time to build a team and establish a presence in the market. But our planning is to focus significantly on exports. Question 6: What steps is Epack taking to attract customers towards prefab solutions and increase market awareness, especially in tier-2 and tier-3 cities? Answer: The construction market in India is approximately ₹6 lakh crore, out of which the prefab market is only ₹22,000-25,000 crore (3-4%). However, due to its benefits, the market is growing rapidly. Our reach in tier-2 and tier-3 cities is quite limited. But the best marketing in these places is a sample structure itself. For example, we built airports in Darbhanga and Saharanpur. People were quite attracted to see them being built quickly and found it more economical compared to the traditional construction process. So, as construction is happening with this process, people’s inclination towards this technology is increasing. The government has also formed a BMPPC council to promote this technology.