Encompass Design India Ltd (ScaleSauce) IPO – SME Board
About the Company :
Encompass Design India Limited, also known by its brand “ScaleSauce”, is a Mumbai-based company originally started in 2010. They help consumer brands grow and sell products both online (e-commerce) and offline. Think of them as a “growth partner” for brands.
They operate in three main areas:
- Brand Scaling (ScaleSauce): They partner with D2C (Direct-to-Consumer) brands to help them sell on platforms like Amazon, Flipkart, and their own websites. They handle marketing, technology, and operations.
- Trading: They trade in agro-products, cotton, and fabrics.
- Digital Services: They provide tech support, performance marketing, and strategy to help brands succeed online.
What They Do: They are a mix of a digital marketing agency, e-commerce operator, and trading company that helps brands sell more products.
READ FULL DRHP HERE: | SEBI DRHP EDIL|
IPO Details Table
| Detail | Explanation | Data |
|---|---|---|
| IPO Opening Date | Buy shares from | 5 Dec 2025 |
| IPO Closing Date | Last date to apply | 9 Dec 2025 |
| Price Band | Price range for shares | ₹101 – ₹107 per share |
| Lot Size | Min. shares to buy | 1,200 shares (~₹1,28,400 at upper band) |
| Total Issue Size | Max money raised | ₹40.21 Crore |
| Fresh Issue | New shares, money goes to company | ₹40.21 Crore (37.58 lakh shares) |
| Offer for Sale (OFS) | Old owners sell shares | Nil (100% money goes to company) |
| Listing Date | Shares start trading | 12 Dec 2025 (Tentative) |
| Listing Exchange | Where it trades | NSE SME (Small & Medium Enterprise) |
| Face Value | Company unit value | ₹10 per share |
| Registrar | Share allocation handler | MUFG Intime India Pvt Ltd |
| Book Manager | IPO arranger | 3Dimension Capital Services |
FIND THE LINK TO CHECK THE ALLOTMENT STATUS: MUFG INTIME
What Will the IPO Money Be Used For?
The company is raising ₹40.21 Crore (Fresh Issue) to use for:
- Office & Interior Work: ₹11.49 Cr to buy office space and renovate it.
- Repaying Loans: ₹11.00 Cr to pay off company debts.
- Working Capital: ₹7.29 Cr for daily business needs (buying inventory, paying staff).
- General Corporate Purposes: Remaining amount for other business needs.
Note: Since there is no Offer for Sale (OFS), promoters are not selling their shares to take money home. All money stays in the company.
IPO Timeline
| Event | Date |
|---|---|
| IPO Opens | 5 Dec 2025 |
| IPO Closes | 9 Dec 2025 (5 PM) |
| Allotment Date | 10 Dec 2025 |
| Refunds Issued | 11 Dec 2025 |
| Shares to Demat | 11 Dec 2025 |
| Listing Date | 12 Dec 2025 |
Business Model & Revenue Structure
How They Make Money:
- Service Fees: Charging brands for managing their e-commerce operations and marketing.
- Trading Margin: Buying goods (like cotton/agro products) at a lower price and selling at a higher price.
- Commission: Earning a cut from the sales growth of partner brands.
Key Financial Metrics (Simple Numbers)
| Metric | FY23 | FY24 | FY25 | H1 FY26 (Sep '25) | Trend |
|---|---|---|---|---|---|
| Revenue | ₹21.62 Cr | ₹40.04 Cr | ₹54.64 Cr | ₹28.15 Cr | Consistent Growth (Doubled in 2 years) |
| Net Profit (PAT) | ₹(1.29) Cr | ₹6.87 Cr | ₹10.79 Cr | ₹5.04 Cr | Turned from Loss to Profit |
| EBITDA Margin | 2.59% | 28.00% | 30.86% | 31.44% | Massive jump in profitability |
| PAT Margin | (Negative) | 17.16% | 19.75% | 17.90% | Very healthy profit margins |
| Debt-to-Equity | 2.14 | 0.78 | 0.44 | 0.42 | Debt significantly reduced |
| ROCE | Negative | 55.36% | 40.49% | 16.33% (Half Year) | Highly efficient capital use |
- Valuation: The P/E ratio is around 15.04x (Post-IPO). This is reasonable compared to industry peers, suggesting the stock is not overpriced.
- Market Cap: The company will be valued at approx ₹151.76 Crore after listing.
Cost of Acquisition – For Promoters
- Promoters: Mr. Ruman Kailash Agarwal & Mr. Yogendra Vashishta.
- Pre-IPO Holding: 80.19%.
- Acquisition Cost: While exact acquisition cost per share isn’t explicitly in the summary, promoters typically hold shares at face value or very low cost since inception.
- Promoter Selling: None. Promoters are not selling any shares in this IPO.
Industry Outlook
- E-commerce Enablers: The “D2C” (Direct-to-Consumer) wave in India is booming. Brands need experts to handle Amazon/Flipkart sales, which benefits companies like ScaleSauce.
- Agro/Textile Trading: This part of the business is volume-driven but has lower margins compared to the tech/services side.
Key Risks & Concerns
-
Revenue Mix: A portion of revenue comes from trading (agro/cotton), which is a low-margin, high-volume business. It can be volatile.
-
SME Liquidity: This is an SME IPO. You must buy/sell in lots of 1,200 shares. It is harder to exit quickly compared to mainboard stocks.
-
Financial Restatements: The company had differences between its audited financial statements and the restated ones in the DRHP, which is a compliance risk factor to note.
-
Geographic Concentration: Major revenue comes from top 5 states. Any disruption there impacts business.
IPO FAQS
What is an IPO?
- An IPO (Initial Public Offering) is when a private company sells its shares to the public for the first time to raise money.
- Example: If a well-known pizza company wants to grow, it can list its shares on the stock exchange so anyone can buy a piece of the company.
How can you apply for an IPO (using Zerodha or Upstox)?
- Make sure you have a Demat account and your bank account is linked.
- Steps:
- Log in to your broker’s app (e.g., Zerodha Kite, Upstox).
- Go to the IPO section.
- Select the company’s IPO you want to apply for.
- Enter how many shares (or ‘lots’) you want and the price you wish to bid.
- Enter your UPI ID, submit your application, and approve the UPI payment request.
How are IPO shares allotted?
- If more people want shares than are available, the company uses a lottery system to decide who gets them.
- If you don’t get shares, your money is simply returned.
What is GMP (Grey Market Premium)?
- GMP shows the extra price people are willing to pay for IPO shares before they officially start trading.
- Example: If IPO price is ₹100 and GMP is ₹20, people are unofficially ready to pay ₹120. It hints at the IPO’s popularity but isn’t a guarantee.
Where to check upcoming IPOs (IPO calendar)?
- Visit popular finance sites like Chittorgarh, IPOWatch, or official exchange websites (NSE, BSE) and look for the “Upcoming IPO” section.
What are IPO listing gains?
- If the share’s price rises on the first trading day, you can make instant profit.
- Example: You buy at ₹150, and it opens at ₹200, you gain ₹50 per share.
How can you make profit from an IPO?
- Quick gains on listing day (if the stock price goes up).
- Long-term: If the company grows, the share price could increase further.
Which IPO is best to buy?
- There is no single best IPO. Check the company’s background, current demand, and GMP, but always research before investing.
- High GMP or popularity doesn’t guarantee profits.
Are IPOs safe?
- IPOs can be profitable but also risky; prices can go up or down sharply.
- Only invest if you are ready for potential losses.
How to check IPO allotment status?
- After the IPO process, check on exchanges (BSE/NSE websites) or the IPO registrar’s site (like K-Fintech, Bigshare,or mufg-intime) by entering your PAN or application number to see if you got shares.
Important Tips for Retail Investors Applying for an IPO
- Use Only Your Own PAN Card:
Avoid using the same PAN card for multiple IPO applications. For example, if you have already applied using your PAN for one IPO, don’t try to apply again with the same PAN under different accounts or through others. - Apply in the Right Category:
Ensure you select the correct investor category (such as Retail Individual Investor) when filling out your application. Applying under a wrong category can lead to rejection or disqualification. - Maintain Sufficient Bank Balance:
Before applying, ensure your bank account linked to the application has enough funds to cover the full bid amount. For instance, if the IPO application requires a payment of ₹15000, make sure your account holds at least that amount. - Use Your Own Bank Account:
Always apply through your own bank account. Using someone else’s account can cause your application to be rejected during the verification process. - Avoid Last-Minute Applications:
Don’t wait until the deadline day or moments before to apply. Last-minute submissions may face technical glitches or processing delays, reducing the chances of success.