Management

• Sharad Khandelwal (Managing Director)
• Amit Midha (Non-Executive Non-Independent Director)
• Ajay Pancholi (Non-Executive Non-Independent Director)
• Vidhi Sharad Khandelwal (Non-Executive Director)
• Sheetal kumar Dak (Independent Director)
• Rinku Vikas Arora (Chairperson and Independent Director)
• Raakesh Jagdish Jhunjhunwala (Chief Financial Officer)

Use of Proceeds

The total issue size is Rs.460.43 cr which comprises fresh issue of Rs.400 cr and offer for sale of Rs.60.44 cr. The company intends to utilize a portion of the Net Proceeds towards Prepayment and/or repayment, in full or in part, of all or a portion of certain outstanding borrowings availed by the Company and Material Subsidiary namely Electronics Bazaar FZC (Rs.320 cr) and rest for general corporate purposes.

Competitive Strengths

Integrated Business Model with Global Scale: GNG Electronics has established a robust, end-to-end business model in the refurbished electronics space, seamlessly managing the entire value chain from sourcing to sales. With advanced refurbishing facilities in India, the UAE, and the US, the company efficiently caters to global markets while optimizing costs and turnaround times. These facilities are equipped to perform everything from basic repairs to complex motherboard and cosmetic enhancements, ensuring consistently high-quality output. A major strength lies in GNG’s scale and global reach — it refurbished nearly 5.9 lakh devices in FY25, marking a 2.3x growth over two years. This is backed by a wide network of 4,154 customer touchpoints and 557 procurement partners, including leading global brands like HP and Lenovo. GNG’s diversified supply chain ensures cost efficiency, dependable sourcing, and steady access to quality devices, firmly positioning it as a frontrunner in the rapidly expanding global refurbished electronics market.

Their commitment to sustainability is deeply rooted in operations, promoting digital inclusivity and responsible recycling. It extends the lifecycle of ICT devices, thereby reducing e-waste and helping corporates meet their ESG goals. With certifications such as “Extended Producer Responsibility” from the Central Pollution Control Board and “Responsible Recycling v3” from SERI, not only ensures eco-friendly practices but also enables them procurement partners to comply with and benefit from EPR regulations. As the E-Waste (Management) Rules, 2022 push for higher recycling targets, their position as an EPR-certified organization strengthens leadership in sustainable ICT solutions. Trust, reliability, and nearly a decade of industry experience drives its mission to deliver value through innovation and long-term client relationships.

Strong global supply chain, established sourcing base with long tail of vendors and wide customer base: GNG Electronics has built a strong, end-to-end business model spanning procurement, refurbishment, and sales, giving us a clear advantage in pricing and operational efficiency. Our refurbished ICT devices are sold in 38 countries through a robust network of 4,154 touchpoints, supported by Value Added Resellers (VARs), distributors, and corporate partners. This multi-channel, multi-geography presence reduces market-specific risks. Their India facility is a certified refurbishment centre for HP and Lenovo — leaders with a combined global market share of 48% — and we are also the largest authorized Microsoft refurbisher in India. These global partnerships boost our sourcing and sales capabilities and enhance customer trust.

It maintains a well-established procurement network comprising corporates, leasing firms, recyclers, NBFCs, consulting companies, and large retail chains like Vijay Sales. Key partners such as Tata Capital, BitRaser, HP, and Lenovo support the buyback and trade-in programs, enabling them to process over 18,500 devices and helping OEMs facilitate new device sales. These alliances offer advantages such as assured product quality, revenue visibility, and enhanced brand goodwill. It also serves as ITAD partners to institutions requiring secure data handling and sustainability compliance, reinforcing credibility and long-term growth potential.

Their efficient supply chain ensures seamless operations from device sourcing to final delivery, reflected in financials with no inventory write-offs or bad debt. While the Indian ecommerce market for refurbished products is evolving, they have built a strong online presence in mature markets like North America and Europe, where are highly rated on ecommerce platforms. To further enhance visibility, it invests in both digital and offline marketing, including SEO, lead generation, trade shows, and in-store branding. These efforts, coupled with consistent quality and service, have fostered repeat business and strengthened global leadership in the refurbished ICT space.

Well - established refurbishing capabilities and state – of - art infrastructure, with focus on quality: GNG Electronics operates five strategically located refurbishing facilities — one in Navi Mumbai, India; three in Sharjah, UAE; and one in Texas, USA — covering a total area of 58,127.82 sq. ft. These are among the largest and most integrated facilities in India’s ICT refurbishment sector. The Sharjah facilities, situated in the Free Zone, offer operational benefits including on-site employee accommodation. All facilities are secured with 24/7 surveillance, emergency alarm systems, and advanced anti-theft sensors, ensuring safety and control.

The strategic placement of these centres near major markets offers significant logistical and cost advantages, enabling faster turnaround times and efficient delivery. Equipped with advanced technology and skilled manpower, the facilities handle high volumes while maintaining strict quality control standards across all stages of the refurbishment process. This global infrastructure not only ensures operational efficiency but also strengthens their ability to meet growing international demand and capitalize on global market opportunities with speed and reliability. Their facility in Navi Mumbai, India, adheres to internationally recognized quality management standards, including ISO 9001:2015 for quality management, ISO 27001:2013 for information security, ISO 14001:2015 for environmental management, and ISO 45001:2018 for occupational health and safety. They have also received an “Extended Producer Responsibility” certification from Central Pollution Control Board.

Strategic Global Expansion and Deeper Market Penetration for Long-Term Growth: GNG Electronics is well-positioned to capitalize on the rapidly growing global refurbished electronics market, expected to reach USD 246.7 billion by CY29 at a CAGR of 17.4%. In India, the refurbished PC market is projected to grow even faster at a 30% CAGR, reaching USD 4 billion by FY30. To tap into this opportunity, GNG is expanding across both developed and emerging markets, supported by refurbishing facilities in India, UAE, and the US — strategically located to cover nearly 70% of global GDP. The recent incorporation of a subsidiary in the Netherlands further strengthens its European presence.

The company has grown its customer base from 1,833 in FY23 to 4,154 in FY25 and is targeting students, professionals, SMEs, and institutions with a broad portfolio of 5,840 SKUs. Value-added offerings like extended warranties, financing options, and assured buyback programs enhance customer appeal. GNG is also investing in digital marketing and offline brand partnerships to boost visibility and repeat business. This multi-pronged strategy supports scalable, sustainable growth and positions the company to capture a larger share of the expanding global market.

Well positioned to harness global shift to sustainability and growing focus on ESG: Since beginning refurbishment operations in 2014, GNG Electronics has built a strong presence in the ICT Devices industry, led by a seasoned management team with deep domain expertise. Our refurbished products, priced up to one-third lower than new devices and backed by warranties of up to three years, offer an affordable, high-quality alternative. This aligns with growing global emphasis on sustainability and ESG compliance. Refurbishment helps extend device life, reduce e-waste, and minimize demand for raw materials — critical in addressing the environmental impact of electronics. For instance, manufacturing one new laptop consumes around 1,200 kg of earth materials and emits 250–330 kg of CO₂e. By choosing refurbished alternatives, resource use and landfill waste are both significantly reduced. Our facilities follow international standards such as ISO 14001 and ISO 9001:2015, ensuring quality and compliance in all operations.

The E-Waste (Management) Rules, 2022 mandate progressive collection targets for producers, and our status as a government-certified refurbisher and EPR certificate holder from the Central Pollution Control Board strengthens our ability to contribute to these goals. In addition to promoting responsible recycling of surplus IT assets, our operations support job creation and enable corporates to meet sustainability targets. We are also helping to standardize the fragmented refurbished electronics sector in India. Markets like Europe increasingly reward companies that meet ESG norms, placing GNG in a strong position to benefit from such shifts. Our integrated approach — combining affordability, environmental responsibility, and quality assurance — positions us well to capitalize on the global transition to sustainable consumption.

Key Risks & Concerns

Increase in key raw material prices: GEL sources parts and materials such as hard drives and random access memory for operations from a combination of domestic and foreign suppliers. Any significant increase in the prices of parts and materials essential for operations may negatively impact business and financial performance.

Significant working capital requirements: The company’s business requires a significant amount of working capital as there is considerable time lag between purchase of inventory and realisation from sale of ICT Devices. As of March 31, 2025, the company has working capital requirement of Rs.261 cr.

Export risk: As of FY25, the company derived ~75.5% of its revenue from exports. Thus, failure to manage business in overseas markets or the inability to grow business in new geographic markets may affect the company’s growth and may have a material adverse effect on its business operations.

Product Concentration: As of FY25, the company derived ~76% of its revenue from the sale of laptops and hence, any decline in demand for the product may have an adverse impact on the company’s business, revenue and profitability.

Outlook and Valuation

GNG Electronics Ltd. has established a strong competitive position in the high-growth refurbished ICT device industry, supported by global OEM partnerships, deep B2B integrations, and a fully integrated business model. Its first-mover advantage and end-to-end control in the refurbishment chain provide both scale and sustainability. With favourable industry tailwinds and a growing global presence, the company stands to gain as demand shifts from unorganized to organized players. Longstanding relationships with established customers have contributed to their success thus far and will continue to be a key driver of future growth. They will not only help them expand its market share but also facilitate their entry into new markets, further solidifying the position as one of the global leader in the refurbished ICT industry.

Between FY23 and FY25, GNG has experienced significant growth, with revenues soaring from Rs.659 crore to Rs.1,411 crore, which translates into a CAGR of 46%. Meanwhile, profitability also witnessed a positive trend, with EBITDA margins rising to 8.3% in FY25 from 7.1% in FY23. The company's return ratios also remained strong in FY25, with the ROE at 30.4% and the ROCE at 17.31%. This robust performance stems from strong pricing driven by brand-certified refurbishment, solid export demand, and healthy order inflows from international institutional clients.

GNG Electronics offers investors a rare opportunity to tap into the growing refurbished tech segment, aligned with global trends in digital inclusion, circular economy, and ESG mandates. Its global reach, certifications, and improving profitability make it attractive — especially given the lack of direct listed peers in this niche segment. The business is well-positioned to capitalise on the growing demand for refurbished electronics, particularly benefiting during economic downturns when consumers seek more affordable options. While we believe that GNG operates in an interesting market, the business remains low margin, with limited pricing flexibility and high working capital dependency. In our view, the margins are expected to exhibit volatility stemming from its product mix and demand fluctuations. Additionally, the company is expected to repay debt of Rs 320 crore in FY26, which shall aid in saving on interest costs and boost profitability. On valuation front, the issue is priced at 39x based on FY25 earnings on post issue capital. Hence, considering strong tailwinds in the IT asset disposition segment and healthy fundamentals, we assign a SUBSCRIBE rating to the issue.