Renting of Hotels, Banquet, Exhibition Venue Furniture Made by Us

Opportunity Snapshot

  • Country: India India
  • Industry: Manufacturing
  • Stage: Expansion/Growth
  • Years in operations: 40, Employees: 30
  • Investment size: $1,000,000 / min. $200,000
  • ROI: 15% in 7 years
  • Type of investment: Equity

Investment Opportunity

Investment of Rs 1000 in 1 of our Banquet Chairs manufactured by us earns you Rs 10,000 at least in 5 years and you still own the Asset!!!!

B2B model,
Break even in 6 to 7 months. Profitable from Year 1
Dominance of margin and profitability over growth
Low cash burn on customer acquisition
Scalable
This is a major Pivot of our 40 year old business of Manufacture of Banquet Furniture. We have been in the business of Manufacture and Sale of Banquet Furniture, supplying to leading Hotels and Banquet venues in India. The company has built a strong brand repute and network of contacts and it now aims to make a pivot to renting of Banquet Furniture.

Our designs are widely accepted all over India we have demonstrated the strength of our Brand and quality with over 15000 customers over the last many years and having developed strong client relationships,.

We intend to improve production and contract manufacture high-quality Banquet Chairs, Tables and Covers. The promoters have 40 years of experience in manufacturing these products, during which we have also developed over 200 in-house designs. We currently own a manufacturing facility in Delhi The new business model will be asset Based, supported by contract manufacturing. The company's competitive edge lies in its superior quality products, Heritage Brand and extensive supplies over 40 years to 15,000 customers.Our quality is far superior to that available in the Market.

The company's customers are Hotels, Banquet Venues, Exhibitors, Event management Companies ,-High-end caterers.IN NCR there are over 1500 Banquet and Marriage venues and many Events .The market for Banquet Furniture is currently predominantly served by local Tentwallas, Assurance of quality and service delivery is the s competitive advantages During the marriage season, there is huge demand and the current supply is shoddy. That's where an opportunity exists for a provider of high quality furniture. No manufacturer is in this line and we can therefore recondition our Stocks rapidly
and at lowest cost.

Production cost of a chair is projected to be INR1,200 and it could be lent out for INR35 / day (in line with market rate). Break-even would be achieved in 30 rental days.

Year 1 Revenue projection is INR 22 crores. With EBITDA of Rs 6.34 Cr
The company is projected to achieve INR 400 crores revenues in 5th year reflecting significant growth .Net profit margin is expected to be 15 % which is expected to rise to 45 % in the 5th year.

We have invested 40 years in this business and over 50 Lakhs in Plant and machinery. This is a great opportunity for a strategic investor like you to invest in this company when it is ready to expand and participate in its growth to become one of the leading players in this unique space. We are looking for growth capital to be invested in stages against pre-determined milestones with a deal structure that can take convertible format with a deal structure that can take convertible format with conversion at mutually agreeable multiples/terms.

Total funds required now is US $ 1 million for making 10000 chairs and allied tables , Infrastructure and Logistics and manpower for pilot project in NCR. Once done successfully in 9 months internal revenues are adequate for expansion to other cities. Revenues start from 4th month onwards.

Competitive Advantage

The company's competitive edge lies in its superior quality products, Heritage Brand and extensive supplies over 40 years to 15,000 customers.Our quality is far superior to that available in the Market. For instance, we use thick pipes and Foam in chairs and high quality upholstery and the end product chair is such that it eliminates the need for covers.

The market for Banquet Furniture is currently predominantly served by local Tentwallas, with only 1-2 organized players. Assurance of quality and service delivery is the company's competitive advantages over the local tentwallas. During the marriage season, there is huge demand and the current supply is shoddy. That's where an opportunity exists for a provider of high quality furniture. No manufacturer is in this line and we can therefore recondition our Stocks rapidly and at lowest cost

Rationale for the deal

An Investment of Rs 1000 in 1 our Banquet Chairs manufactured by us earns you Rs 10,000 at least in 5 years and you still own the Asset!!!!So what can be achieved with 10,000 Chairs and Tables? WOW!!!We have invested 40 years in this business and over 50 Lakhs in Plant and machinery. Our funds deployed are large. Production cost of a chair is projected to be INR1,000 and it could be lent out for INR35 / day (in line with market rate). This suggests break-even would be achieved in 30 rental days.

Use of financing

Total funds required now is US $ 1 million for making 10000 chairs and allied tables , Infrastructure and Logistics and manpower for pilot project in NCR. Once done successfully in 9 months internal revenues are adequate for expansion to other cities. Revenues start from 4th month onwards.

Opportunity for the investor

This is a great opportunity for a strategic investor like you to invest in this company when it is ready to expand and participate in its growth to become one of the leading players in this unique space. We are looking for growth capital to be invested in stages against pre-determined milestones with a deal structure that can take convertible format with conversion at mutually agreeable multiples/terms.Organized events industry size is estimated to be USD 850 million (as at Oct 2016). IN NCR there are over 1500 Banquet and Marriage venues and many Events .

Year 1 projection is INR 22 crores. With EBITDA of Rs 6.34 Cr these are at a conservative assumption of 30 % Banquet venue Utilization per year. Year 1
The company is projected to achieve INR 400 crores revenues in 5th year from now, reflecting significant growth .Net profit margin is expected to be 15 % which is expected to rise to 45 % in the 5th year.

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