Aaron Industries Limited

Started in 2013, Aaron Industries Limited is Surat Gujarat based company engaged in the business of manufacturing and trading of Elevator products and other elevator parts with the continuation of existing business also. Currently, the company provides Elevator product and parts including Elevator cabins, Doors, Frem, Header, Traction Machine etc. Aaron Industries also provides electronic equipment like Busbar chambers, Cable tray, Distribution boxes, Loom switch and building hardware material like Z perline and slotted channel etc. As per financial performance, AIL posted turnover/net profits of 0.39 cr. / Rs. 0.01 cr. (FY14), 2.38 cr. / Rs. 0.04 cr. (FY15), Rs. 3.32 cr. / Rs. 0.04 cr. (FY16), Rs. 4.80 cr. / Rs. 0.05 cr. (FY17) and Rs. 11.79 cr. / Rs. 1.07 cr. (FY18). Thus it has shown outstanding performance for FY18 which is a bit surprising. For last three fiscals, it has posted an average EPS of Rs. 6.24 and an average RoNW of 23.41% on the basis of paid up equity capital of Rs. 1.88 cr. as on 31.03.18. Issue is priced at a P/BV of 2.01 on the basis of its NAV of Rs. 18.94 as on 31.03.18. It has no listed peers to compare with. If we take latest earnings and attribute it to fully diluted equity post issue, then asking price is at a P/E of around 17 thus it appears fully priced. Sustainability of its FY18 performance in the year before IPO raises concern. On BRLM's front, for Gretex Corporate Services Pvt Ltd this is the 14th IPO and from last 10 IPOs, 1 opened below issue price, 4 at par and other listed with 1% to 5% premium on the day of listing. As of now, from last 10 IPOs, 5 are trading below issue price and remaining above issue price. ( As on 16.08.18 ) As per financials, company's performance is average, RoNw is 30.05% for last three fiscals and issue is fully priced as per latest earnings. Sudden increase in bottom-line in FY18 raises concerns and performance of BRLM is also not good. So we give AVOID rating to this SME IPO as per current market situation.

• 1 Mr. Amar Chinubhai Doshi
• 2 Mr. Karan Amar Doshi
• 3 Mr. Monish Amarbhai Doshi
• 4 Ms. Radhika Amar Doshi
• 5 Ms. Toral Karan Doshi
• 6 Ms. Bhoomi Monish Doshi