Dachepalli Publishers BSE SME IPO review (Not Rated)

•    The company is engaged in publishing educational content-based books for K-12 segment across CBSE, ICSE, State Board Curriculums.
•    Currently, the south centric publisher having its operations in 10 states and Union Territories in India, aims to be a Pan India publisher.
•    Its portfolio includes 600+ titles for six prominent brands.
•    The company posted robust growth in its top and bottom lines for the reported periods.
•    Based on its recent financial data, the issue appears fully priced.
•    Investors may lap it up for medium to long term.

ABOUT COMPANY:
Dachepalli Publishers Ltd. (DPL) is an established content-based educational publishing house dedicated to serving the K–12 segment across CBSE, ICSE, and State Board curriculums. It provides high-quality textbooks along with partnering with various schools ranging from the capacity of 100 to 50,000 students as a comprehensive academic support system. Its integrated content and support services are designed to empower educators, streamline academic delivery, and enhance student learning outcomes across all grade levels.

DPL traces its roots back to a modest bookstall established by their forefather in the early 1900s. Initially focused on retailing textbooks and magazines, the business gradually evolved to meet the growing educational needs of the region, expanding into publishing Urdu textbooks, diaries, and eventually comprehensive academic content. With over a century of legacy in the book trade, the Dachepalli name has become deeply trusted and widely recognized across the states it operates in. This longstanding presence gives it a significant edge in building credibility and fostering long-term relationships with schools, educators, and retailers alike.

As of 2025, its portfolio features over 600 titles distributed under six prominent brands: Dachepalli publishers Limited, Apple Book Company, Orange Leaf Publishers, Pelican Publishing House, Sangam Publishing House, and School Book Company. Alongside printed materials, the company provides schools with curriculum-aligned digital resources at no additional cost. Upon purchasing its textbooks, schools gain access to a range of educational tools—including instructional videos, a test generator, and other academic software—installed directly within their premises. This approach not only helps schools become digitally empowered with tailored technology but also allows them to avoid the high costs of third-party software. Because its digital tools are designed exclusively to complement its textbooks, schools that enrol on its platform tend to maintain their partnership with the company for 3 to 4 years, benefiting from a seamless and integrated academic ecosystem.

Its robust sales and distribution network supports operations, with a particular focus on south India. In fiscal year 2025, the company achieved notable success by selling over 4 million books across key educational stages— pre-primary (Nursery to UKG), primary (Classes 1 to 5), and secondary levels (Classes 6 to 10). Its extensive network encompasses numerous schools and distributors, supported by collaborations with vendors specializing in printing, paper sourcing, binding, lamination, and packaging. 

The company works with over 75 contractual authors, both in-house and outsourced. Its strategy to remain asset-rich allows it to optimize operations, focusing on content development and efficient sales and distribution. The company operates across 10 states and Union Territories in India. Its integrated supply chain, in-house print facilities, and centralized warehouse in Hyderabad, Telangana, support its operations. DPL’s distribution network includes over 300 distributors and dealers, bolstered by a dedicated in-house sales team of over 60 trained professionals. Its team of 205 employees, including a dedicated salesforce, is crucial to maintaining its market position and driving continuous improvement. 

ISSUE DETAILS/CAPITAL HISTORY:
The company is coming out with its maiden book building route IPO of 3960000 equity shares to mobilize Rs. 40.39 cr. The company has announced the price band of Rs. 100 – Rs. 102 per share of Rs. 10 each. The IPO opens for subscription on December 22, 2025, and will close on December 24, 2025. The minimum application to be made is for 2400 shares and in multiple of 1200 shares thereon, thereafter. Post allotment, shares will be listed on BSE SME. The issue constitutes 26.44% of post-IPO paid-up equity capital of the company. From the net proceeds of the issue, the company will utilize Rs. 25.00 cr. for working capital, Rs. 6.00 cr. for repayment of certain borrowings, and the rest for general corporate purpose.

The IPO is solely lead managed by Synfinx Capital Pvt. Ltd., while Bigshare Services Pvt. Ltd. is the registrar to the issue. JSK Securities & Services Pvt. Ltd. Is the market maker, as well as a syndicate member.

The company has issued/converted entire initial equity shares at par value, it has also issued bonus equity shares in the ratio of 4 for 5 in March 2025. The average cost of acquisition of shares by the promoters is Rs. 3.89, Rs. 3.93, Rs. 5.56, Rs. 9.82, and Rs. 9.91 per share. 

Post-IPO, company’s current paid-up equity capital of Rs. 11.02 cr. will stand enhanced to Rs. 14.98 cr. Based on the upper price band of the IPO, the company is looking for a market cap of Rs. 152.76 cr. 

FINANCIAL PERFORMANCE:
On the financial performance front, for the last three fiscals, the company has posted a total revenue/net profit, of Rs. 45.26 cr. / Rs. 0.48 cr. (FY23), Rs. 50.90 cr. / Rs. 3.32 cr. (FY24), Rs.  64.25 cr. / Rs. 7.56 cr. (FY25). For H1- FY26 ended on September 30, 2025, it earned a net profit of Rs. 7.62 cr. on a total revenue of Rs. 40.36 cr. Its trade receivables are at an alarming level. Clarifying on this, the management informed that due to the historical trends of education materials advance orders for the next education year is planned 4 to 6 months ahead, it reflects as higher receivables due to billing which gets realised only by the new term. The management also informed that with the demands from the schools they are dealing in for other relevant used for the education year, they have plans to be the one stop supplier for all educational year related materials. This really augurs well as the company has bright prospects on this count.

For the last three fiscals, the company has reported an average EPS of Rs. 3.43 (simple average), and an average RoNW of 19.92%. The issue is priced at a P/BV of 3.22 based on its NAV of Rs. 31.72 as of September 30, 2025, and at a P/BV of 2.03 based on its post-IPO NAV of Rs. 50.30 per share (at the upper cap). 

If we attribute its FY26 super annualized earnings on post-IPO expanded equity base, then the asking price is at a P/E of 10.03, and based on its FY25 earnings, the P/E stands at 20.20. Thus, the issue appears fully priced.

The company has posted PAT margins of 1.05% (FY23), 6.53% (FY24), 11.83% (FY25), 18.87% (H1-FY26), and RoCE Margins of 4.25%, 10.71%, 18.22%, 14.99%, respectively, for the referred periods. 

DIVIDEND POLICY:
The company not paid any dividends for the last 10 years. It has adopted a dividend policy in April 2025, based on its financial performances and future prospects. 

COMPARISON WITH LISTED PEERS:
As per the offer document, the company has shown Chetana Education, S Chand & Co., as its listed peers. They are currently trading at a P/E of 8.37, and 11.3 (as of December 16, 2025, 2025). However, they are not truly comparable on an apple-to-apple basis. 

MERCHANT BANKER’S TRACK RECORDS:
This is the 1st mandate from Synfinx Capital in the ongoing fiscal, and has no past track records so far.