Exxaro Tiles IPO : Key things to know

Created on 03 Aug 2021

Wraps up in 5 Min

Read by 4.2k people

Updated on 13 Sep 2023

It's monsoon now, but this monsoon seems different. This monsoon, it's raining IPOs. We had Zomato, Rolex rings, Glenmark Lifesciences, and many more yet to come like Paytm, Nykaa, etc. But have you thought about why there are so many IPOs coming this year?

Currently, we are in the midst of a bull run, so if a company brings in an IPO, they get a better valuation than the normal sideways market. Also, due to low interest rates, investors start to hunt new avenues to park their money and make superior returns. It's a win-win situation for the company as well as investors hoping for listing gains. That's why we are witnessing a rally of IPOs.

Anyway, going with the rally of IPOs, let’s analyze the next one on the cards, Exxaro Tiles, which is slated to go live on the 4th of August.

At the outset, let’s have a birds-eye view of the ceramic industry.

The Indian Ceramic Industry

The Indian Ceramic market is estimated to be about ₹ 40K crore. Of this, 35% is contributed by exports. India is the world's 2nd largest producer of ceramics after China. It is predicted that in the upcoming 2 years, the ceramics sector is going to grow by about 12 - 14%.

Why is the Indian ceramics market growing?  Firstly, due to internal demand and secondly due to the global China +1 strategy. Ceramics are mostly used in sanitary ware, floor tiles, wall tiles, roofing tiles, and vitrified tiles. In India, Morbi (a town in Gujarat) is the hub for Ceramics. You’d be surprised to know that Morbi accounts for nearly 90% of the total ceramic production in India.

We have been talking about ceramics so much, but which industry is this industry linked to? It's simple, the real estate industry. So, if you are bullish on real estate, you should be bullish on ceramics too. Because new buildings will need more amenities, more interior decoration, and rising disposable income, people will spur a little more on the home decor segment. Isn’t it? 

Exxaro Tiles - company info

Exxaro tiles were incorporated in 2007-08, and back then, it was named Ricasil Ceramic Industries. It was basically a frit manufacturing company. Frit is one of the raw materials used for making tiles. Over the years, the company expanded, diversified and evolved into a vitrified tiles manufacturer. Vitrified tile is an alternative to marble and granite flooring.

Currently, the company concentrates on only 2 products - Glazed vitrified tiles and Double charged vitrified tiles. Even though they have just 2 products in their basket, they have about 1000+ designs of just these 2 products. Moreover, Exxaro has a dense network of 2000+ dealers and is present in 27 states.

Talking about promoters, Exxaro seems to be a family run business like most ceramic businesses in India. Mukesh Kumar Patel is the recently appointed MD, and Chairman of the business has 19 years of experience in this industry.

Details of the IPO

IPO Details

IPO Opening Date

Aug 4, 2021

IPO Closing Date

Aug 6, 2021

Issue Type

Book Built Issue IPO

Face Value

₹10 per equity share

IPO Price

₹118 to ₹120 per equity share

Market Lot


Min Order Quantity


Listing At


Issue Size

₹161.09 Cr

Fresh Issue

₹134.23 Cr

Offer for Sale

₹26.86 Cr


Financials of Exxaro Tiles Ltd

Now that we have built a narrative let's have a look at numbers backing the story. The company's revenues grew at a CAGR of 4.71% from 2018 to 2020, while profits grew at a CAGR of 10.97% in the same period. This means the company has optimised its resource utilization. Two major costs that the company has are employee cost and power/fuel cost(F-35). To tackle fuel costs, the company will set up its own gas station, and the company has made efforts to automate manufacturing facilities to reduce employee costs. It can be inferred that the company has stable business performance.

Competitors of Exxaro Tiles

Ceramics is a heavily competitive business. Most of the business is concentrated in the hands of unorganised players. Organised players own a market share of about 43%. Some renowned names are Kajaria Ceramics, Asian Granito, Somany Ceramics, OrientBell Ceramics, Murudeshwar Ceramics, Prism Johnson. Veterans like Somany Ceramics and Kajaria ceramics have been in this market for about a long time and have established their forte and network in this industry.

Exxaro has good PAT margins and lower employee costs compared to its peers and Industrial median, but other operational and financial ratios are a laggard.

Why should you invest in Exxaro Tiles IPO?

  • Rising disposable income in the hands of citizens & booming Real estate market in India.

  • After Covid-19, WFH has become the new normal. This has made people move back to their natives from metro cities. The company’s expansion plan includes expanding in tier 2 and tier 3 cities, and this is the market the company can capitalize on.

  • Backward integration plans of the company to set up gas stations to reduce raw material costs can improve the company's margins.

  • Anti-dumping duties on China has led to a shift in the global China + 1 strategy, and India is the second biggest market after China.

  • Governmental reforms like PMAY, AMRUT Yojana, Housing for all till 2022. Alongside reforms, the development of smart cities could contribute to the growth of the business. 

Risk factors in this IPO

  • This industry is totally dependent on real estate and infrastructure. In recent years, real estate hasn’t given good returns due to several reforms like RERA and GST, which have negatively impacted the housing sector.

  • The company faces fierce competition from already established players.

  • The company is concentrated on just two product lines and hasn’t diversified much.

  • The company earns a significant amount of revenue from international business. Any chances of imposition of anti-dumping duty like that in China puts the company's profitability in a vulnerable position.

  • The company has 2 manufacturing plants, both in the state of Gujarat. This adds to many dependencies on the laws of that particular state. Plus, the logistical cost for expansion into the northern or eastern region would be heavy.

  • GST of vitrified tiles is 28% compared to roofing or earthen tiles, which attract 5% GST, which drags down the company’s profits.


The size of the company is small and has the potential to grow and diversify. Financials are stable, and the company is reducing its debt burden. But, it faces fierce competition from already established players. 

The overall growth of the industry will help the company grow. Also, some of the steps taken by the company to optimize its operations can be fruitful. Now that you know the industry's nuances & the company, it’s entirely your call whether to opt for the IPO or not. So, what’s it going to be? Tell us in the comments.

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Amol Nakashe

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Amol has completed his Electronics Engineering from VIT, Pune. But his passion for the stock market intrigued him in pursuing MBA in Finance. He is a keen reader of topics related to stock markets and follows market updates religiously.

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