PRE-IPO PRESENTATION

JUNE 2018
PRE-IPO PRESENTATION

CONTENTS
▸ABOUT MOTI GROUP
▸ABOUT AARON INDUSTRIES
▸ABOUT THE PROMOTERS
▸OUR BUSINESS
- MANUFACTURING
- MARKETING
- NEW VENTURE
▸ELEVATOR INDUSTRY
▸EXPANSION PLANS
▸FINANCING OF CAPITAL EXPENDITURE
▸FINANCIAL HIGHLIGHTS
▸DETAILS OF INITIAL PUBLIC OFFER
▸A WORD FROM THE MANAGEMENT TEAM
PRE-IPO PRESENTATION

ABOUT THE MOTI GROUP

▸ Founded way back in 1961 by Mr. Chinubhai Doshi, Moti Group
started its journey by manufacturing Iron Clad Switches.

▸ As years passed, the Moti brand gained popularity and experience

in manufacturing of switchgear products, Distribution Boxes,
Busbar Chambers, Loom Switch and Miniature Circuit Breaker.

▸ Further additions to the product portfolio were Cable tray and

building hardware material like Z-perline, Slotted Channel, etc.

▸ More than 90% power looms run by Moti brand Loom switch in
Gujarat.
PRE-IPO PRESENTATION

ABOUT AARON INDUSTRIES

▸ In 2013, Aaron Industries Pvt. Ltd. was incorporated as a
separate entity, for diversifying into Elevator Industry.

▸ New range of products, consisting of elevator cabins and

elevator doors were manufactured, under the name of
Aaron.

▸ Within a short span, Aaron has shifted its focus from

simple elevator cabins to extra-ordinary designer elevator
cabins.
PRE-IPO PRESENTATION

OUR JOURNEY SO FAR

2013
Aaron industries was incorporated
by Mr. Amar Doshi as a separate
entity for manufacturing of
2014
Took part in Elevator Expo at
elevators.
Mumbai, and got recognised
for designer cabins.
2015
The company, for the first time
imported Auto Door
Operators from Europe. 2016
Developed in-house „Door
Operating System‟
May 2017 for elevators.

Technology expansion by CNC Bending

Machine and Laser Cutting Machine.
 July 2017
Company exported it‟s first lot to
Uganda. In same year, it
has exported to Kenya and Nepal Sep 2017
as well. Started manufacturing of
electrical products.

Nov 2017
Nepal‟s first car lift was installed,
which was supplied by Aaron.
Jan 2018
Converted into a
limited company as

Feb 2018 Aaron Industries Ltd.

Company‟s turnover crosses the

INR 10 crores levels.
March 2018
The company achieved the milestone
of manufacturing 1,000+ „Complete
Automatic Door Sets‟
 PRE-IPO PRESENTATION

PROMOTER GROUP

Mr. Monish Doshi, aged 29

Mr. Amar Chinubhai Doshi, aged 55 years,
Mr. Karan Amar Doshi, aged
years is the Managing Director, is the Director, Promoter and
31 years, is the Whole Time
Chairman and Promoter of the CFO of the company. He has
director and Promoter of the
company. He has been the Director of been the Director of the
company. He has been
the company since it‟s incorporation. company since its
associated with the company
incorporation. He holds a
since it‟s incorporation. He
He has over 30 years of business experience bachelor‟s degree of Business
holds a bachelor‟s degree of
and more than 6 years of experience in Administration from
Engineering from University
Elevator manufacturing industry. University of Pune. He has also
of Pune. He obtained his
obtained his Master of Business
Masters in Mechanical
Since inception he is handling the Administration.
engineering from University
overall business affairs including the
of Southern California
planning, strategies and business He has over 6 years of business
He has over 7 years of business
development. experience.
experience.
PRE-IPO PRESENTATION

BUSINESS ACTIVITIES

BUSINESS SEGMENTS

MANUFACTURING MARKETING

* The company does not participate in the business of Annual Maintenance Contract (AMC) and
elevator installation/maintenance.
PRE-IPO PRESENTATION

MANUFACTURING
‣ We are primarily involved in the
manufacturing of
1) Elevator doors
2) Cabins
3) Door Operators
4) and a small portfolio of electrical product
(for contract manufacturing).

Our flagship product, designer cabins, is an

axis for customer appeal and anticipation.

With this, we intend to offer exclusivity to

your property with the simplest of things like
elevators.

This product has also received furtherance

and praise at the trade expos.
PRE-IPO PRESENTATION

Marketing

Complete elevator sets Individual elevator parts

Consists of: Singular products:

Elevator motors Doors
Cabins and Car Frame Cabins
Doors and Door Operators Car Frame
Panels, and other accessories Door Operators
Boom Barriers
Parking Lifts
For the parts we don‟t manufacture,
we use formal and informal tie-ups These products are primarily marketed
to source the same. through intermediaries.
PRE-IPO PRESENTATION

INSTALLED CAPACITY AND UTILISATION

FY 18 FY 17
NAME OF THE
PRODUCT CAPACITY INSTALLED
UTILISATION (%)
CAPACITY INSTALLED
UTILISATION (%)
(UNITS) (UNITS)

DOOR OPERATORS 3,600 20 3,600 9

DOORS 12,000 40 12,000 23

CABINS 900 69 900 47

DOOR SETS 1,500 77 1,500 39

ELEVATOR KITS 60 13 NIL NIL

TERRITORY WISE SALES

TERRITORY FY 18 (%)
GUJARAT 59

MAHARASHTRA 9

ANDHRA PRADESH 9

EXPORTS 7

OTHERS 17
PRE-IPO PRESENTATION

NEW VENTURE
Parking Lifts and Boom Barriers

This segment was started about six months back, under which the company has been exploring
future demand for parking solutions.

Under this segment, we solely distribute products of Newturn Automation Pvt. Ltd.

We have also started approaching and consulting real estate developers with these products.

However, this segment will generate revenue only in the completion stage after physical
installation of these products.

Our main focus markets complete South Gujarat territory.

This business, we believe, has a gestation period of at least 18 months before it‟s visible in our
revenue streams.
DISCLAIMER
UNLIKE MANY OTHER INDUSTRY SECTORS, THE ELEVATOR INDUSTRY IN INDIA
IS NOT WELL DOCUMENTED FOR AND DOES NOT HAVE RELIABLE PRODUCTION OR
SALES STATISTICS. HENCE, FOLLOWING DATA IS A CONJECTURE BASED ON
VARIOUS INDUSTRY SOURCES AND OUR MANAGEMENT TEAM.

PLEASE NOTE THE ABOVE BEFORE FORMING ANALYSIS AND PROJECTIONS ON THE
SAME.
PRE-IPO PRESENTATION

INDUSTRY DATA
▸India is the second largest market for Elevators after China.
▸Approximately 50,000-55,000 elevator units are sold in India per year, generating a
revenue of roughly INR 10,000 crores ($1.6 Bn).
▸Residential and commercial market split is 75% : 25%.
▸Indian markets are dominated by few big players:
Kone Elevator India Pvt. Ltd.
Johnson Lifts Pvt. Ltd.
Schindler India Pvt. Ltd.
Otis Elevator Company (I) Ltd.
Thyssenkrupp Elevator India
▸These top 5 players generated combined revenue of about INR 6,000 crores in 2015-
16, as per ROC filings.
▸Although various researchers map the growth of this industry at around 8-10%, the
five players mentioned above have cumulatively grown revenue at a CAGR of 14.2%
from 2013-16 (Source: Ace Equity).
▸Except Johnson Lifts Pvt. Ltd. (Chennai), all the above players are foreign.
PRE-IPO PRSENTATION

MOVING AHEAD
▸ The market is expected to grow at 1-2%
points more than the GDP growth.
However, the aggressive investments by
bigger players suggest superior
confidence.

▸ The cumulative gross block for the above

mentioned companies (Otis, Jhonson,
Kone and Schindler) has more than
doubled (510 Cr to 1110 Cr) between
2013-16 (Source: Ace Equity).

▸ Recent expansions:
1. Kone India is setting up a new 18-acre
project in Chennai.
2. Johnson Lifts announced a heavy duty
escalator manufacturing facility in
Chennai.
3. OTIS reported an investment of 100 Cr
to expand manufacturing facility.
PRE-IPO PRESENTATION

Trends supporting the growth of this industry

Urbanisation High-rise Public infrastructure AMRUT

Currently 34 Cr Increasing construct- Improving public Execution of

people are living in ion of high-rise infrastructure across ambitious projects
cities. With 2030, the buildings will only major cities will like AMRUT Smart
number will more prove a boom for increase the usage cities will give
than double with the elevator of lifts in public the elevator
68+ cities having a industry. projects. industry a major
population of at least hike.
1 million, says
McKinsey report.
PRE-IPO PRESENTATION

EXPANSION PLAN
‣ Our company has taken up an expansion plan to setup a
manufacturing unit in Kosamba, Gujarat.

‣ The manufacturing unit is setup for a backward integration for

Raw Materials.

‣ The following are the details of expected expenditure under

Phase-1.

PARTICULARS AMOUNT ( IN CR.)

‣ The land for this expansion
has been identified and
Land & Building 3.4 acquired. It is currently under
Machinery 1.5 the process of title transfer.
Equipments 0.2
Electrification 0.5
‣ We expect completion and
commission of Phase-1 by
Working Capital 1 Dec‟ 18.
Miscellaneous 0.2
TOTAL 7
PRE-IPO PRESENTATION

FINANCING OF CAPITAL EXPENDITURE

Borrowed Funds Owner Fund

We have been sanctioned a term loan
limit of INR 5.76 crores by HDFC Bank Raising INR 4.77 crores of Equity
under “Scheme of Financial Assistance by the way of SME IPO on NSE
by way of Capital Subsidy and Interest Emerge.
Subsidy to Micro, Small and Medium
enterprises” which entitles us to a 6.5%
interest subsidy. Company will also
receive a one-time INR 25 Lakhs capital
subsidy on commencement of the new
plant.

Pulls down our borrowing cost to 3%

and hence, makes us comfortably
placed to meet our interest obligations.

The company has also been sanctioned

an INR 2.5 crores CC limit.
PRE-IPO PRESENTATION

FINANCIAL HIGHLIGHTS (In crores)

PARTICULARS 2020 2018 2017 2016 2015 2014

ESTIMATE

REVENUE 22 11.76 4.79 3.3 2.37 0.39

EBITDA 4.6 1.57 0.25 0.14 0.07 0.01

EBITDA % 21 13 5 4 3 3

FINANCE COST 0.25 0.14 0.17 0.08 0.01 0

DEPRECIATION 0.6 0.1 0.01 0.01 0.01 0

PROFIT AFTER TAX 2.63 0.93 0.05 0.03 0.03 0.01

*Estimates are as per judgement of the management, considering no growth in the current plant and only
50% capacity utilisation in the new plant.
PRE-IPO PRESENTATION

FINANCIAL HIGHLIGHTS (In crore)

PARTICULARS 2018 2017 2016 2015

SHARE CAPITAL 1.88 0.18 0.18 0.01

SHAREHOLDERS FUND 3.53 0.28 0.23 0.05

DEBT 0.99 1.33 1.13 0.39

TRADE
1.81 0.61 0.77 0.56
PAYABLE
NET BLOCK 1.44 0.12 0.09 0.08

INVENTORIES 3.31 1.49 1.18 0.28

TRADE RECEIVABLES 1.55 0.69 0.75 0.6

PARTICULARS 2018 2017 2016 2015

DEBT/EQUITY 0.28 4.75 4.91 7.8

FIXED ASSET TURNS 8.2 39.9 36.7 29.6

WORKING CAPITAL
DAYS
94.7 119.6 128.3 49.3
PRE-IPO PRESENTATION

IPO DETAILS
PARTICULARS UNIT AMOUNT
FACE VALUE Rs./ SHARE 10

PROFIT ADTER TAX 2018 Rs. 93,05,349

FRESH ISSUE @ 26.28% DILUTION IN NO. OF SHARES 12,56,905

ISSUABLE SHARES ROUNDED OFF WITH LOT SIZE 12,57,000

ISSUE PRICE Rs. 38

ISSUE SIZE Rs. 4,77,66,000

LOT SIZE NO. OF SHARES 3,000

TOTAL NO. OF LOTS NO. 419

POST ISSUE MARKET CAPITALISATION Rs. 18,17,47,844
POST ISSUE P/E MULTIPLE 19.53
POST ISSUE P/B MULTIPLE 5.14

SHAREHOLDING PRE ISSUE POST ISSUE

PROMOTER AND PROMOTER GROUP 100 73.72

PUBLIC 0 26.28
PRE-IPO PRESENTATION

WORD FROM THE PROMOTER

Dear shareholders,
We started this company with the purpose to innovatively convert resources into
products that provide ease, comfort, safety and to add value to human life. Since the very
inception, our vision has been very clear to run the business in an utmost organised
fashion that will, in future, help us scale the upward and forward curve smoothly.
Being an SME business, we are glad to have the right platform that provides us with an
opportunity to accelerate our growth.
We believe that this IPO will get with itself a new-leg of growth for the company and will
transfrom Aaron from a family run business to one which is owned by the public.
Yours sincerely,
Mr. Amar C. Doshi
(Chairman, Aaron Industries Ltd.)
PRE-IPO PRESENTATION

CONTACT US
▸ Mr. Ankit Tank
CS and Compliance
[email protected]

www.aaronindustries.net