Fone4 Communications SME
Listing performance
Scheduled dates
Tentative timetable — a past date is not confirmation the step completed
Issue details
- IPO date
- 25 Apr 2022 – 27 Apr 2022
- Listing date
- 06 May 2022
- Face value
- ₹10 per share
- Issue price
- ₹10 per share
- Lot size
- 10,000 shares
- Total issue size
- ₹6.80 Cr
- Market cap at offer price
- ₹17.05 Cr
- Promoter holding
- 95.12% → 57.18% pre-issue → post-issue
- ISIN
- INE0L3H01014
- Registrar
- Cameo Corporate Services Ltd.
- Lead managers
- Finshore Management Services Ltd.
- Registered office
- 1st Floor, 45/692-B, Ashna Arcade, Vylopilly Road, Thammanam, Kerala
Reservation and application size
How the issue is split between investor categories, and what each may bid
| Investor category | Shares | % of net | % of total |
|---|---|---|---|
| Market maker | 3,40,000 | — | — |
Application size
Minimum 10,000 shares per lot, in multiples, at ₹10
| Application | Lots | Shares | Amount |
|---|---|---|---|
| Retail (min) | 1 | 10,000 | ₹1,00,000 |
| Retail (max) | 2 | 20,000 | ₹2,00,000 |
| S-HNI (min) | 3 | 30,000 | ₹3,00,000 |
| S-HNI (max) | 10 | 1,00,000 | ₹10,00,000 |
| B-HNI (min) | 11 | 1,10,000 | ₹11,00,000 |
Category limits
| Category | Bid size | Cut-off |
|---|---|---|
| Retail (RII) | Up to ₹2 lakh | Yes |
| Small HNI (sNII) | ₹2 lakh – ₹10 lakh | No |
| Big HNI (bNII) | Above ₹10 lakh | No |
| Employee | Up to ₹5 lakh | Yes |
Bidding at cut-off means accepting the final issue price without naming one. Only retail and employee applicants may do so.
Valuation and performance
Valuation at offer price
| Metric | Pre-issue | Post-issue |
|---|---|---|
| EPS (₹) | −0.57 | — |
| Market cap | — | ₹17.05 Cr |
No price-to-earnings multiple is shown: the company reported a loss, and an earnings multiple struck on negative earnings would read as a cheap valuation while meaning the opposite.
Key performance indicators
- Return on net worth
- 0.00%
- EBITDA margin
- 4.21%
- NAV per share
- −₹0.10
Single period as reported. Year-on-year movement is in the financials table below, where every period is published.
About Fone4 Communications SME
Fone4 Communications (India) Limited commenced its business in 2014, promoted by Mr. Sayyed Hamid, and is headquartered in Cochin, Kerala. Inspired by growth in the online e-commerce segment for electronics and electricals, the company developed a technological platform (www.fone4.in) allowing customers to purchase consumer electronics with attractive offers. The company operates 25 strategically located showrooms across Kerala (Calicut, Cochin, Kollam, Kottayam, Malappuram, Palakkad, Thrissur, Trivandrum) and generates revenue through both retail (93.50% as of September 30, 2021) and e-commerce (6.50%) segments. It offers a wide range of products from major manufacturers including Apple, Samsung, Oppo, Vivo, Xiaomi, Nokia, Redmi, Techno, Karbonn, OnePlus, Dell, Lenovo, Asus, HP, Acer, Avita, TCL, LG, and Sansui, with Samsung, Vivo, Oppo, and Xiaomi contributing approximately 79% of company revenue.
Company Analysis
from RHPFone4 Communications is an online e-commerce and retail electronics outfit that sells consumer electronics gadgets and accessories across multiple brands through 25 showrooms in Kerala and online channels.
Fone4 Communications (India) Limited commenced its business in 2014, promoted by Mr. Sayyed Hamid, and is headquartered in Cochin, Kerala. Inspired by growth in the online e-commerce segment for electronics and electricals, the company developed a technological platform (www.fone4.in) allowing customers to purchase consumer electronics with attractive offers. The company operates 25 strategically located showrooms across Kerala (Calicut, Cochin, Kollam, Kottayam, Malappuram, Palakkad, Thrissur, Trivandrum) and generates revenue through both retail (93.50% as of September 30, 2021) and e-commerce (6.50%) segments. It offers a wide range of products from major manufacturers including Apple, Samsung, Oppo, Vivo, Xiaomi, Nokia, Redmi, Techno, Karbonn, OnePlus, Dell, Lenovo, Asus, HP, Acer, Avita, TCL, LG, and Sansui, with Samsung, Vivo, Oppo, and Xiaomi contributing approximately 79% of company revenue.
Objects of the Issue
- To meet the working capital requirements of the company ₹600.50 Lakhs p.53
- To meet the Issue Expenses ₹49.50 Lakhs p.53
- General Corporate Purposes ₹30.00 Lakhs p.53
Issue Structure
- Total Issue
- ₹680.00 Lakhs
- Fresh Issue
- 68,00,000 Equity Shares at ₹10/- per share aggregating to ₹680.00 Lakhs
- Price Band
- ₹10/- per Equity Share
- Face Value
- ₹10/-
Business Model
The company operates a multi-brand retail and e-commerce business model. It sources products from manufacturers and Tier-1 dealers on credit for 15 days and sells through its 25 retail showrooms and online platform. Retail stores are located in high foot-traffic areas to attract customers, while the e-commerce platform (www.fone4.in) offers various payment modes including EMI, COD, debit/credit cards, UPI, and net banking. The company uses a centralized warehouse and trusted courier agencies for stock movement and delivery.
Business Segments
SWOT Analysis
- • Established online and offline retail presence in Kerala with 25 strategic showrooms(p.17)
- • Trusted online platform for consumer electronics and accessories in Kerala(p.17)
- • Diversified product portfolio across major consumer electronics brands(p.17)
- • EBITDA positive performance indicating operational viability(p.18)
- • Positive cash flow from operating activities in recent periods(p.25)
- • Established multi-brand retail chain with 25 strategically located showrooms across Kerala(p.71)
- • Proven track record and awards from major manufacturers and government(p.70)
- • Cost-efficient supply chain with centralized warehouse management(p.71)
- • Diversified product portfolio from leading global brands(p.71)
- • Multi-brand retail presence with 25 showrooms across Kerala(p.130)
- • Diversified product portfolio across electronics and consumer durables(p.130)
- • Positive net-worth and tangible assets exceeding minimum regulatory thresholds(p.146)
- • Demonstrated business continuity with 3+ year track record(p.146)
- • Positive cash accruals in multiple fiscal periods(p.147)
- • Significant accumulated losses in prior years impacting financial position(p.21)
- • Heavy dependence on a limited number of brands for majority of revenues(p.21)
- • All premises and retail stores are leased, not owned by the company(p.22)
- • Significant outstanding litigations with quantifiable financial implications(p.20)
- • Dependence on external suppliers and distributors for all product sourcing(p.21)
- • High dependence on key promoters and directors for operations and management(p.24)
- • History of significant losses with negative net worth in recent years(p.57)
- • High debt burden relative to company size(p.71)
- • Very recent leadership appointments in key independent director positions(p.89)
- • Dependence on retail segment for 93.50% of revenue with e-commerce at only 6.50%(p.71)
- • Geographic concentration with all operations limited to Kerala state(p.71)
- • Limited e-commerce presence despite industry trend towards online sales(p.76)
- • Significant accumulated losses and negative reserves(p.111)
- • High financial charges burden relative to EBIT(p.131)
- • High depreciation expenses eroding profitability(p.131)
- • Ongoing unpaid contingent liabilities related to employee benefits(p.125)
- • Non-compliance with PF Act provisions during review period(p.125)
- • Dependence on limited number of related party suppliers(p.127)
- • Pending litigation involving promoter with material disputed amounts(p.136)
- • Tax assessment disputes with significant demand amounts(p.134)
- • Mandatory SME listing limits near-term upside(p.160)
- • Minimum paid-up capital migration threshold(p.160)
- • Expansion into new geographies beyond Kerala(p.23)
- • Growth in Indian consumer durables market driven by rising disposable income(p.17)
- • Leveraging online-to-offline integration model to enhance market reach(p.17)
- • Growing e-commerce segment for consumer electronics and durables(p.17)
- • Expansion into Southern India beyond Kerala(p.70)
- • Growth in organized retail sector due to GST implementation and e-way bill(p.74)
- • Significant growth potential in e-commerce channel currently underutilized(p.76)
- • Plan to scale retail footprint from 25 to 100 stores in Kerala by end of 2023(p.74)
- • Long-term strategic expansion to 400 retail stores across South India(p.74)
- • Expansion into lower middle-class segment with affordability focus(p.74)
- • Potential for strategic acquisitions in retail and logistics sectors(p.70)
- • Expansion of retail footprint beyond Kerala(p.130)
- • Debt reduction and improved financial positioning(p.130)
- • Enhanced online and omnichannel capabilities(p.130)
- • Growth in consumer electronics and durables market in India(p.130)
- • Path to main board listing(p.160)
- • Fundraising capacity via capital increase(p.160)
- • Geographic concentration of operations in Kerala creates revenue vulnerability(p.22)
- • Intense competition from organized and unorganized retail players(p.22)
- • Aggressive price competition from online retailers(p.23)
- • Seasonal and cyclical volatility in consumer spending patterns(p.24)
- • Adverse impact from COVID-19 pandemic on business operations(p.22)
- • Dependency on brand reputation and image in highly competitive market(p.21)
- • Regulatory changes in taxation and government policies affecting margins(p.29)
- • Intense competition from established organized players with greater resources(p.72)
- • Vulnerability to technology obsolescence and rapid product cycle changes(p.72)
- • Heavy reliance on physical retail locations vulnerable to lockdowns(p.74)
- • Dependence on four brands for 79% of revenue creating concentration risk(p.71)
- • Supply chain vulnerabilities and logistics complexity across geographies(p.75)
- • Rental exposure with store agreements expiring and requiring renegotiation(p.77)
- • Severe business disruption from natural disasters such as flooding(p.130)
- • COVID-19 pandemic impact on operations and demand(p.130)
- • Rapid technological advancement and inability to keep pace with change(p.130)
- • Intense competition in electronics retail sector(p.130)
- • Exposure to general economic and business cycles(p.131)
- • Regulatory and legal changes affecting retail sector(p.131)
- • Political instability and government policy changes(p.131)
- • Potential failure in licensing and regulatory compliance(p.131)
Promoters
| Name | Role | Pre-Issue | Post-Issue |
|---|---|---|---|
| Sayyed Hamid | Promoter | 47.56% | 28.59% |
| Roudha Zerlina | Promoter | 47.56% | 28.59% |
| Sayyed Haris Sayyed Imbichi | Promoter Group | 4.88% | 2.93% |
| Mr. Sayyed Hamid | Founder Promoter | 50% | — |
| Mrs. Roudha Zerlina | Founder Promoter | 50% | — |
Auto-extracted from the company's RHP using AI, with each fact linked to its source passage (hover any row to see the quote & page). Provided for research only, not investment advice — verify against the official RHP before relying on it.