GNG Electronics – Fast Growing, Green Themed, Refurbished Electronics Player

GNG Electronics is India’s largest refurbisher of PCs and electronics with a significant presence outside India. It distinguishes by providing warranties on refurbishes ICT devices. It is led by its founder, Sharad Khandelwal, and an experienced management team.

Its IPO of upto INR 4600 million is aimed at strengthening its balance sheet and also involves an offer for sale.

Offer Details of the IPO

Issue of Fresh and Offer for Sale

The IPO includes a fresh issue of upto INR 4000 million and an offer for sale of upto INR 600 million. The offer for sales comprises of equity shares offered by Sharad Khandelwal and Vidhi Sharad Khandelwal and Amiable Electronics Private Limited.

The following promoters/founders selling shares via offer for sale:

• Sharad Khandelwal

• Vidhi Sharad Khandelwal
• Amiable Electronics Private Limited

Price Band: INR 225 to  237 per Equity Share

BRLMs

The BRLMs of the issue are: Motilal Oswal Investment Advisors Private Limited
IIFL Capital Services Limited (formerly IIFL JM Financial Limited) JM Financial Limited

Objectives of the IPO

The purpose of the IPO is to use the net proceeds for de-leveraging. The company expects to use all of the net proceeds to prepay or repay some of its outstanding borrowings and for general corporate purposes.

De-leveraging/Repayment of Debt

• Prepayment and/or repayment, in full or in part, of all or a portion of certain of the company and material subsidiary (Electronics Bazaar FZC’s) existing borrowing: INR 3,200.00 million

Industry Overview – Refurbished Electronics

The refurbished electronics industry is a rapidly expanding business of purchasing, refurbishing, and the reselling of used electronic devices. The market includes people, small and medium businesses and even large enterprises which look for products that are inexpensive and dependable. Second-hand laptops, desktops, smartphones, tablets and other electronics are some of the products of the industry.

The renewed electronics market stems in part from increasing demand for budget technology upgrades, the push for sustainable and environmentally-friendly processes, and the increased understanding of the importance of reducing electronic waste. The market is also fueled on the basis of recent technological developments that have facilitated the restructuring and re-use of electronics-based products.

Key Segments within the Industry

The refurbished market can generally be broken down into the following key sectors:

• Refurbished PCs: The collection, refurbishment, and resale of used PC systems, which have been previously leased by corporations. The used laptops or desktops are fully checked, tested and refurbished like new.
• Refurbished Smartphones and Tablets: This category consists of the purchase, refurbishment and retailing of previously owned handheld devices such as smartphones and tablets. The reconditioned smartphones and tablets are then checked, repaired, and tested to ensure all these standards are met.
• Refurbished Computer Components: This portion of the company focuses on the reclamation, refurbishment and resale of used manufactured computer components such as HDDs, CPUs, DRAMs, and flash products, including NAND and SSDs. The rebuilt power board and all electronic components are tested to assure they conform to the original specifications.

The market can also be divided into the following segments:

• B2B: This portion is comprised of sales deals with businesses and institutions for refurbished electronic and digital goods.
• B2C: (Business to Consumer): This sub-segment includes sales of Remanufactured Electronics to individual users.
• Online marketplaces: This sub-segment includes refurbished electronic sales from online marketplace like eBay, Amazon and other online shopping sites.

In general, the refurbished electronics market is a challenging, fast-paced marketplace dealing in the collection of used electronic equipment, its refurbishment, and resale. Market drivers are affordable technology, the need for sustainable environmental practices.

Industry Size & Growth

The worldwide market for refurbished electronics has been growing rapidly in recent years as consumers look for ways to save on electronics or reduce the impact on the environment. The size and growth trend of the industry is as follows:

• The worldwide market for used and refurbished electronics was worth USD 159.2 billion in CY18 and was estimated to have grown at a CAGR of 4.9% to reach USD 212.1 billion by CY24.
• Going forward, the market is expected to expand at a 10.7% CAGR to USD 352.4 billion by CY29.
• The refurbished electronics market is a smaller segment but is expected to grow faster. It increased from USD 60.3 billion in CY18 to USD 110.6 billion in CY24, witnessing a CAGR of 10.7% and is anticipated to expand at a CAGR of 17.4% during CY24-29 to touch USD 246.7 billion in CY29.
• In India, the used and refurbished market is expected to grow from USD 19.8 bn in FY25 to USD 40 bn in FY30.

Segment-wise Growth

The sector is being driven by several segments:

• Refurbished PCs: Global refurbished PCs market grew from USD 9.7 billion in CY18 to USD 17.1 billion in CY24, at a CAGR of 9.9%, and is projected to increase at a CAGR of 18.9% over CY24-29 to reach USD 40.6 billion. In India, used & refurbished PC market is expected to witness a 17% CAGR over the next five years and reach USD 5.3 billion.
• Refurbished Smartphones: Global refurbished smartphone sales are estimated to grow at a 12.8% CAGR during CY24-29 to reach USD 203.3 billion by CY29. In India, the used & refurbished smartphones are a large and fast growing industry. From USD 4.5 bn in FY25, they are expected to reach USD 11.7 bn in FY30.
• Refurbished Computer Components: The global market for refurbished electronics spare parts is projected to grow at a CAGR of 9.5% during 2024-2029 to be valued at USD 6.1 billion by 2029.

Key Drivers of Growth

The refurbished electronics market is also witnessing robust growth due to a number of factors, including:

• Rising Appetite for Sustainable Technology: As consumers become more environmentally conscious, the demand for second hand electronics as a sustainable choice to new tech is growing.
• Money Saving: Refurbished electronics can save money and give extended value through reduced pricing and second-hand usability.
• Refurbishment Technological Progress: The progress in the refurbishment technologies have now made possible producing great quality refurbished devices that meet consumer expectations.
• Government Interventions: Governments are also taking measures to push the repair business as is the case with the EU’s Right to Repair.
• Rising Need for Accessible Tech: Accessible tech will become more in demand from emerging markets and the emerging middle class.

Company Background

GNG Electronics Limited was established on October 19, 2006 by Sharad Khandelwal, a veteran entrepreneur. The company refurbishes and sells electronics on its website. GNG Electronics Limited is engaged in a various range of businesses including:-

Refurbished ICT Devices: The company refurbishes and resell various types of ICT devices, such as laptops, desktops, tablets, servers, premium smartphones, mobile workstations and accessories.

Refurbishment as a Service: The company provides refurbishment of ICT equipment, refurbishes ICT devices to customers and makes devices ready for re-use.

Lease: The company also provides customers short term lease and rentals of devices.

Overall, the company’s products and services are aimed at offering customers an economical solution that is also environmentally friendly and helps recycle electronic waste.

Key Features of Its Strategy

• Proven Refurbishment Ability: The company’s proven ability to refurbish a variety of ICT products to a high standard.
• Diverse range: The company wide range of products and services allow the company to serve a broad range of customer needs.
• Sustainability – The Company have a commitment to sustainability and reducing eWaste.

In conclusion, GNG Electronics Limited is a key industry player in the refurbished ICT device industry that boasts robust operational ability and a comprehensive offering.

Competitive Landscape

The used electronics industry is very competitive and it is a global business. Key players in the market are:

• CertiDeal: A European refurbisher of electronics that has a strong online presence and high-quality products.
• Close the Loop: An American company that focuses on refurbishing and recycling electronics, and is particularly known for its sustainability initiatives.
• Gazelle: US Based company that provides a platform for customers to buy and sell used/certified pre-owned electronics.
• MusicMagpie: A British company with strong online business buying and selling used CDs, DVDs and electronics.

Competitive Positioning

• Strong e-commerce and social presence: With a robust e-commerce system and a social media presence, Electronics Bazaar has made itself available to potential customers around the world.
• Quality Products: The company is focused on building a trusted brand in the refurbished electronics industry.
• Efficient logistics and distribution: Electronics Bazaar’s efficient logistics and distribution system ensures that products are delivered to customers quickly and efficiently.
• Focus on sustainability: Its dedication to sustainability and reducing e-waste makes it unique in its competitors and also attracts the customers concerned on environment.

Strengths:

·         Strong Market Position: Electronics Bazaar is the largest refurbisher of laptops and desktops in India and is one of the biggest ICT refurbishers in the world and India. The successful position of the company with its Pixadus brand can be attributed to the high-quality refurbished products which offer a lot of value at a very competitive price point, along with a wide range of warranties.

·         Well-Established Refurbishing Capabilities: Electronics Bazaar has 5 refurbishing centers spread across India, USA & UAE with sophisticated refurbishing facilities. This allows the company to provide customers even in USA and UAE with flexible and reliable solutions.

Weaknesses:

·         Limited Geographic Presence: The company faces global competition but has a limited presence beyond India. This can hinder the company’s ability to grow its customer base and its revenue.

·         High Competition: Refurbished electronics market is very competitive, with numerous players in the space. Such competition could result in pricing pressure and adversely affect the company’s market share.

A financial profile: A history of sustained growth.

Robust revenue growth: The company has recorded consistent revenue growth with a 2 year CAGR of 46%. In the Fiscal 2025, the company earned INR 14,111.10 million from operations against INR 11,381.38 million in Fiscal 2024.

Drivers of Revenue Growth

• Strategic Focus on Required ICT Devices: The company’s strategic focus on refurbishing ICT devices has resulted in growing revenue from operation. The company has been able to meet the thriving demand for second-hand ICT hardware by revamping popular devices.
• Geographical Expansion: The company’s geographical expansion, particularly in the USA and European Union, have increased the Company’s revenue from operations.

Strong Profit Growth: The company has witnessed a PAT CAGR of 45.9% over the last 2 years. The company recorded a PAT of INR  690.33 million in Fiscal 2025, up 31.9% from INR  523.05 million in Fiscal 2024. This growth in net income is due to the company’s ability to sustain its gross margins.

Drivers of profit growth

• Stable Gross Margin: The company’s Gross margin has been stable while revenue growth has been strong.
• Cost controls: The company has a strong focus on controlling costs.
• Increase in Other Income: The company’s other income, which includes interest income and export incentives, has surged over the last few years. This increase in other income has added to the profit increase.

Table 1: Brief Financials & KPI Comparison

Source: DRHP