I am sharing my notes as a new thread for this company. There has already been a thread for this company on this forum, however that is closed. I am particularly intrigued by the company because of its integration in providing the space for the events as well as proper management of the events. I see some value here because the company is trying to create synergies in this space not just in the venue management space but also creating services around them to provide end to end solutions. The objective of starting this thread is to understand the nuances in this industry (so core learning) rather than self judgements and perceptions.
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- India events and exhibition market is projected to grow from USD 5.23 billion in 2024 to USD 7.80 billion by 2029, with a CAGR of 8.31 during this period.
- The retail market in India is anticipated to reach USD 1,750 billion by 2026, underscoring the country’s economic potential.
- Dubai is the biggest market for exhibition and trade fairs. 1 lakh people participate in Dubai exhibitions from India every year.
- So for an exhibition business, the main client is the exhibition organizer for the venue. So when he books the venue, he also gives the list of his vendor to the venue that these are the companies that are going to execute the entire work for them.
- And venue is not asking any direct deposit from the companies like us
- But if at all there is a deposit, it is paid by the exhibition organizers.
- And exhibition organizers are also normally not paying the deposit because they are the client of the venue, so venue needs exhibition organizer in order for them to grow.
- These are basically the industry standards which the management discussed.
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- Exhibition and event managing company with end to end services and infrastructure. They also have trade fair publications in India as well as UAE.
- They claim to be India’s first venue management company.
- Company was founded in 1997 with initial capital of just Rs2300.
- Exhicon offers an extensive range of products and services, including media and integrated marketing, temporary and permanent event infrastructure and event management services. We have evolved into an end-to-end
service provider, sufficiently managing all aspects of the exhibitions and events industry. - Key services include designing and construction of B2B and B2C fairs and events assisting clients with necessary permissions and licenses
- Their diverse clientele ranges from the state government, domestic associations, international clients and sectors such as hospitality, F&B, FMCG, international trading and healthcare.
- Some notable fairs that they manage annually is the general insurance fair.
- Their portfolio includes prestigious events such as G20 Bharat 2023, the Global Kokan Festival, the Namo Job Fair, the UP Trade Show in Noida, as well as the large corporate events for clients such as and major corporate event in Pune.
- Client repetition is 80-85.
- Company claims to have no competition domestically as there are multiple services which are required (32) for fairs and exhibitions and they provide end to end services which no other player is doing right now.
- They have a jv with magar enterprises which operates Messe Global exhibition center which they operate and manage venue for them.
- 360 degree company- cater to the venue, exhibition organizer and participant in the exhibition.
- Exhicon is entirely B2B, and geographical split is 20% international and 80% domestic. Digi globe is B2C because of the customers are directly the exhibitors.
- B2B is 75% business and B2C is 25%.
- So the entire revenue from Exhicon standalone, Exhicon, the listed company, comes from providing services to the exhibition organizers, which includes managing the entire event, setting up temporary venues as required, giving the entire services that goes into conducting the event, F&B also.
- and the entire revenue of Exhicon digi globe comes from service providing to the exhibition organizers. That is around INR 41 crores or you can say around 45% of the consolidated revenues.
- The entire revenue from Digi Globe comes from stall design, catering to the social media, the SOE, the marketing support services to the clients who are participating in the exhibitions. So that’s around, say, 20% of the total revenue.
- The company also secured its prestigious Nuclear Power Corporation of India tender to manage 120 events within a period of June 2024 to April 2025 and they managed to do 120 events in a span of less than 5 months across 10 states.
- Their expertise lies in the end-to-end event management services along with the in-house infrastructure for execution of these kind of events.
- Primarily, when you see an event management agency, they have a agency background or a management skill set, wherein Exhicon with in-house material, logistics, and inhouse equipment has a lot of other leverages.
- H2 is generally a heavy quarter for them in terms of event management.
GROWTH POINTERS
- They plan on expanding abroad, particularly middle east
- Have also made some acquisitions in middle east, have some more in pipeline
- Planning to open exhibition venues at three more locations in Ayodhya, Mumbai and Pune( bigger area) will be putting capex in building these Venues, will also focus on acquisitions- which they believe are undervalued and which adds value to the shareholders
- the company also signed a joint venture to open its 1st owned venue, which is largest of the Pune called Messe Global Convention Center.
- Since the Phase 1 is nearing completion, the company is also planning to open 2 more venues in Mumbai and Ayodhya with Ayodhya already having a 5-acre land parcel as acquired by the company,
- Currently, company has its presence in 3 countries and is simultaneously targeting expansion into 5 more countries over the next 3 years
- Messe Global Convention Center that is set to be operational by March ‘25. will provide around INR 40 to INR 50 crore revenue.e from the next financial year,
- the capacity of Messe Global is 35,000 pax indoors and outdoors put together
- so an interesting value add here is that they are creating a plug and a play area in which any event can take place within 2 hours of the venue booking, earlier it was 24-48 hours. because of inherent add onns to the venue
- like stage and fnb stalls etc, but with exhicon’s services and integrated systems. In one day they can do two events in a day with a max. capacity of 1100people.
- plus they have a hall capacity of 5500 people who can be seated inside the hall, they also have a parking space of 2-3 acres which can have store good number of cars.
- If you talk about the entire facility, it’s spread out to 9 acres of the total area with the biggest open Lawn of 80,000 square feet with a parking space for 3,000 cars is spread out to 2 acres, and 5,000 2-wheelers parking facility, and with a plug and play arena of 1,100 seating capacity and a convention area of 5,500 seating capacity.
- So overall, 35,000 guests can be accommodated at one go in one event and this makes us the largest event venue of Pune.
- So Pune as a venue will definitely add great value to our numbers next year. We will also be able to add at least 2 more venues in the following 2 years.
- s. Ayodhya, we already acquired the land of 5 acres and will start building next year, next financial year.
- , if you look at the consolidated numbers of H1, 80% has still come from Exhicon - Copo and Digi Globe, which have been there for the last 3 years
- Also looking at orders from UAE and Saudi, total 5 orders which they have to execute
- they say that they remain asset light by jv with people to acquire lands for events, whats the partnership like. How much do they give to the other party? Are there any risks assosiated with a business model like this
- is this their maot? Thye create jvs with conventional hall owners to remain asset light. Thye also mentioned that going forward also fixed assets wojnt be more than 20-25% of their balance sheet size. Its very capital intensive for someone to start a venue
- “But we have devised ways of keeping capital cost much lower than and we are just being comparative because we have to compare venue with the venue not with any other business, which is extremely asset light. So we’ll be relatively asset light at any point of time. And fixed asset as a percentage of our balance sheet size would not be more than 20%, at the most 25% of the balance sheet size”.
- for eg the land parcel in pune where they are building the conventional centre is owned by anothe party but all the capex and operations belong to Exhicon.
- How does the other party benefit in this sort of a setting. Do they get fixed premium every year or one time premium for jv. How/
- so can nesco whose the market leader in venue management not create a 360 platform to also help exhibitors with their exhibitions. Why do you only have this competitive advantage?
I am sharing them particularly because I feel this space has a lot of potential in India in the coming time. I would really appreciate if esteemed investors from the community can chip their thoughts and add value to the discussion.