AccelerateBS India Limited

As per financial performance, AccelerateBS India Limited has posted total income/net profits of Rs 4.93 Cr / Rs 0.68 Cr (FY20), Rs 4.52 Cr / Rs 0.43 Cr (FY21), Rs 3.56 Cr / Rs 0.26 Cr (FY22) and Rs 3.48 Cr / Rs 0.59 Cr (10M FY23), So company has shown declining results. But sudden jump in net profit just before IPO raises concerns. Company has posted an average EPS of Rs 3.82/- and average RoNW of 23.33% for last three fiscals. Issue is priced at a P/BV of 5.56 as per NAV of Rs 16.20/- post issue. As per FY22 earnings on fully diluted equity post issue, asking price is at P/E of around 74.64 and as per annualised FY23 earnings P/E is 27.21. As per RHP, comparison between listed peers are shown in above table. On BRLM's front, Shreni Shares Limited is associated with this SME IPO and handled 16 SME IPOs in last 3 years. From last 10 SME IPOs, one opened below issue price and remaining opened above issue price on the listing day. As of now from last 10 IPOs, one is trading below issue price and remaining are trading above issue price. ( As on 03.07.23 ) As per financials, AccelerateBS India Limited has shown average results, RoNW is 23.33% and P/E is respectively 74.64 and 27.21 as per FY22 and annualised FY23 earnings, which looks aggressively priced. Also jump in net-profit just before IPO ( last 10 months ) raises doubts. Company is in Digital Technology Services, which is highly competitive and fragmented. Performance of BRLM is good. So we are giving AVOID rating to this SME IPO, readers must consult a qualified financial advisor prior to making any actual investment decisions.

• 1 Mr. Kunal Arvind Shah
• 2 Mr. Keyur Dipakkumar Shah