GNG Electronics (GNG) offers refurbishing services for laptops, desktops and ICT devices, both globally and in India. The company has a significant presence across India, USA, Europe, Africa and UAE.

The company operates under the brand `Electronics Bazaar', offering sourcing to refurbishment to sales to after' sale services and providing warranty.

The company offers other value'added services such as information technology asset disposition (ITAD) and e ' waste management services, warranties, doorstep service, on-site installation, flexible pay options, easy upgrades, assured buyback programs and buyback programs for refurbished ICT devices.

GNG Electronics provides tailored buyback solutions for laptops and desktops to help large format retail stores such as Vijay Sales (India) Private Limited (Vijay Sales) and OEM brand stores such as HP India Sales Private Limited (HP) and Lenovo Global Technology (India) Private Limited (Lenovo) to run efficient, customer'friendly buyback programs facilitating sale of new devices.

The company has a sales network with the refurbished ICT devices being sold in 38 countries as of March 31, 2025. GNG Electronics sales network comprises 4,154 touch points in India and globally, as of March 31, 2025.

Object of the offer

The IPO consists of a fresh issue of Rs 400 crore, and 2550000 equity shares through offer for sale.

The selling shareholders include Sharad Khandelwal, who will offload 35000 equity shares at the upper price band aggregating Rs 0.79 crore, Vidhi Sharad Khandelwal, who will offload 35000 equity shares at the upper price band aggregating Rs 0.79 crore, and Amiable Electronics Private Limited, which will offload 2480000 equity shares at the upper price band aggregating Rs 58.78 crore.

Out of the proceeds from the fresh issue, Rs 320 crore will be used for repayment/ prepayment/ redemption, in full or in part, of certain borrowings availed of by the company and its material subsidiary namely, Electronics Bazaar FZC and the balance for general corporate purposes.

Strengths

GNG is India's largest refurbisher of laptops and desktops and among the largest refurbishers of ICT devices overall, both globally and in India with significant presence across India, USA, Europe, Africa and UAE, in terms of value, as of March 31, 2025.

The company has built long-term relationships with procurement partners by offering value-driven synergies, supporting sustainability goals, and ensuring data privacy. Its procurement network grew from 157 in FY 2022 to 557 in FY2025, with plans for further expansion. Partnerships with brands like HP and Lenovo enhance credibility, enable efficient buyback programs, and strengthen market positioning. The company aims to expand these programs globally while maintaining compliance through certifications, fostering trust and long-term collaboration.

GNG has five refurbishing facilities located across India, USA and UAE. It has one facility in Navi Mumbai, Maharashtra, India, one facility in Dallas, Texas, USA and three facilities in Sharjah, UAE, aggregating to 58,127.82 sq. ft. The strategic positioning of these facilities near major markets provides the company with significant cost and logistical advantages, allowing for efficient operations and timely delivery. These advanced facilities are equipped with technology and manpower, enabling the company to handle high volumes of products efficiently while ensuring quality control throughout the refurbishment process. This global presence allows it to serve customers in multiple countries with ease and reliability and exploit the huge global market opportunities.

The company is committed to high ESG standards, focusing on sustainability through quality certifications and environmental compliance. Its refurbishment processes reduce e-waste by extending the lifespan of electronics, aligning with global sustainability goals. Prioritizing ESG strengthens its value proposition, opens new revenue streams, and positions it to benefit from incentives in markets like Europe. The company aims to expand its role in government initiatives through certifications and collaborations to further drive its sustainability vision.

The company is promoted by Sharad Khandelwal (CEO), who has rich experience of over three decades in the Indian IT distribution industry. Khandelwal is an ICAI Gold medalist. The senior management team consists of professionals with over 3 decades of industry experience at global brands like Amazon, HP and Dell.

Weaknesses

The company earned more than 75% of its revenues from sales of refurbished laptops and any decline in demand for such products or technological obsolescence will impact the company's business.

Increase in the prices of parts and materials essential for the company's operations may affect its margins, and the company's ability to procure these parts may be affected by price fluctuations.

GNG revenue generated from outside India accounts for a significant portion of its revenue from operations. As of Fiscal 2025, Fiscal 2024 and Fiscal 2023, the company derived 75.53%, 57.97% and 50.53%, respectively, of its revenue from outside India. Any failure to manage its business in overseas markets or its inability to grow its business in new geographic markets may affect the company's growth.

Top 10 customers contributed more than 45% of the total revenue in FY2025 and loss of any of these customers will adversely affect the company's revenues.

The company has substantial indebtedness which requires significant cash-flows to service and limits its ability to operate freely. Debt servicing coverage ratio stood at 0.25x in FY2025. Any breach of terms under the financing arrangements or the company's inability to meet its obligations, including financial and other covenants, under its debt financing arrangement, may adversely affect the financial condition of the company.

The company had negative cash flow from operations in all the 3 previous years of operations.

The company in the past has entered related party transactions and may continue to do so in the future, which may potentially involve conflicts of interest with the equity shareholders.

Legal claims against promoters and company stood at Rs 41.0 crore and 9.2 crore respectively.

Contingent liabilities as on March 31,2025 stood at Rs 9.7 crore.

Valuation

In FY2025, consolidated sales were up by 24.0% to Rs 1411.11 crore compared to FY2024. Growth in revenues was mainly due to increase in sale of products outside India to Rs 1065.78 crore for FY2025 from Rs 6,59.75 crore for Fiscal 2024, driven by geographical expansion in USA and European Union. OPM inclined by 132 bps to 8.28%, which led to 47.5% increase in operating profit to Rs 116.89 crore. Other income increased 63.6% to Rs 9.26 crore. Interest cost increased 60.3% to Rs 38.35 crore and depreciation increased 158.6% to Rs 9.45 crore.PBT stood at Rs 78.344 crore in FY2025 as against Rs 57.32 crore in FY2024. Tax expenses for FY2025 were Rs 9.31 crore compared to tax expense of Rs 5.02 crore in FY2024. Net profit increased 32.0% to Rs 68.83 crore.

FY2025 EPS on post-issue equity works out to Rs 6.04. At the upper price band of Rs 237, P/E works out to 39.2x.

The total outstanding borrowings were Rs 434.36 crore on a consolidated basis as of March 31, 2025. The plan is to repay 73.67% of the debt using the issue proceeds. This will significantly reduce interest cost and boost profits. The FY2025 PAT would be 100.48 crore (as against PAT of Rs 68.83 crore) and EPS would be Rs 8.81 if 73.67% of the interest cost is eliminated, assuming all other factors, including the tax rate, remain unchanged. Debt/Equity of the company will moderate to 0.18x post-IPO as against Debt/Equity of 1.91x pre-IPO. The adjusted P/E ratio, at the upper price band, moderates 26.9x.

The company does not have any listed peers.

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