PNN
New Delhi [India], May 10: Urban Tots, a leading toy manufacturing enterprise, has transitioned from a private to a publicly owned entity. This strategic move is a pivotal step in the company's ambitious journey to secure a listing on the stock exchange by 2026.
Founder Statement:
Deepak Chaudhary, Founder of Urban Tots, emphasizes this opportunity by highlighting the significant demand in the domestic toy industry. "India, a net importer of toys, saw over Rs 22,000 Cr worth of toys imported in FY22 from countries such as China, Indonesia, and Taiwan. The government's supportive policies have empowered domestic manufacturers to scale their production and make India a global exporter. Urban Tots aims to capitalize on this momentum through the Production Linked Incentive (PLI) scheme," he said. "Our IPO will mark a landmark event in the toys and apparel sector."
Government Initiatives:
The government's measures include a substantial increase in import duty (from 20 per cent to 60 per cent) and a strong focus on the toy industry within the PLI scheme. The proposed PLI framework, with an estimated allocation of Rs 3,489 Cr, aims to stimulate domestic production from 2024-25 to 2031-32.
Urban Tots:
Urban Tots, the toy division of Deepak Houseware and Toys (DH&T), specializes in manufacturing and selling an extensive range of toys, including plastic and electronic products. The company's brand portfolio features popular products such as heavy toys (e.g., Mercedes and BMW Bikes) and role-playing sets.
Financial Performance:
Urban Tots has showcased exemplary growth in recent years, touching an absolute growth of ~100 per cent consistently in terms of revenue & over 100 per cent in terms of net profit since inception.
- Revenue Growth: The company reported revenue of Rs 16 Cr in FY22 and is projected to reach Rs 80 Cr in FY24, achieving a CAGR of 71 per cent.
- Profit Growth: Net profit margins grew from Rs 2.4 Cr in FY22 to a provisional Rs 9.78 Cr in FY24, maintaining a CAGR of 35 per cent.
- Net Profit Margin: From FY23 to FY24, net profit rose by 138 per cent, from Rs 4.2 Cr to a provisional Rs 10.15 Cr, driven by efficient utilization of resources.
Future Expansion Strategy:
Urban Tots has outlined its strategic growth plans:
- Pre-IPO Funding: In 2024, the company will conduct a pre-IPO round of Rs 60 Cr at a valuation of Rs 553 Cr to bolster production capacity. This will support revenue growth from Rs 200 Cr in FY25 to Rs 400 Cr by FY26.
- IPO Fundraising: By 2026, Urban Tots will launch its IPO to raise Rs 200 Cr at a projected valuation of Rs 2,100 Cr.
- Expansion Plans: The IPO will fuel the establishment of a new production plant in Madhya Pradesh to meet increasing demand. It will also fund two additional plants across India, enabling the company to reach Rs 2,000 Cr in revenue by FY31.
Conclusion:
Urban Tots' IPO presents an exciting opportunity for investors to support a high-potential startup positioned to transform India's toy manufacturing sector. With a clear vision and experienced leadership, Urban Tots aims to become the largest toy manufacturer in India, creating a legacy of growth, innovation, and global market impact. Investors should conduct their due diligence before participating in this remarkable journey.
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