Davin Sons IPO

The company operates in two primary segments: Garment Manufacturing and FMCG Distribution. In the Garment segment, the business specializes in manufacturing and designing readymade garments, including jeans, denim fabrics, denim jackets, and t-shirts for other brands. The garment production process is outsourced to third-party contractors, who receive technical specifications such as design and fabric, with the company overseeing the entire manufacturing process. An in-house design team develops new styles and collections to ensure alignment with current fashion trends. Fabric is sourced from reliable manufacturers in Mumbai and Delhi, with quality control maintained through regular inspections and storage at the warehouse for dispatch.

In the FMCG segment, the company distributes a range of branded packaged products, including biscuits, chips, oils, non-alcoholic energy drinks, and chocolates. As a distributor for large FMCG companies, these products are sold to retailers, shopkeepers, and other distributors across states including Delhi, Haryana, Punjab, Rajasthan, and Arunachal Pradesh. Bulk stocks are procured from vendors and resold in smaller quantities, generating profits through margins and incentives. With over a decade of experience in garment and FMCG distribution, the promoter and experienced team continue to drive innovation in product offerings and maintain a strong market presence. FMCG products are stored in a warehouse in Gurgaon, Haryana, while garment products are stored in Delhi.

Davin Sons IPO Strengths

• Their range of products allows their existing customers to source their various product requirements from them and also enables them to expand their business from existing customers.
• Their long-standing relationships with their suppliers have helped them in creating a distributor-of-choice image for themselves for many of these companies.
• Davin Sons reported a remarkable 242% increase in revenue for FY24, showcasing strong business expansion.
• With operations across eight states, the company benefits from widespread market penetration and access to a diverse customer base.

Davin Sons IPO Risks

• There are outstanding litigation proceedings involving the company, its promoters and/or its directors, an adverse outcome in which may have an adverse impact on their reputation, business, financial condition, results of operations and cash flows.
• Their top ten customers accounted for approximately 64.17% of their total revenue from operations for FY 2022-23. The loss of any of these customers can disrupt their revenues.
• With only 20 employees, scaling operations may present challenges in meeting growing business demands.
• A substantial increase in borrowings indicates rising working capital needs, which could impact financial stability.