Accent Microcell Limited

Accent Microcell Limited is one of the Global leading manufacturers of Microcrystalline Cellulose (MCC). Company's two manufacturing facilities located at Pirana Road, Ahmedabad and Dahej, SEZ (Bharuch), they have developed a strong global sales model, as they are serving customers across India and in more than 45 countries including USA, Canada, Germany, UK, Japan, China, Australia, Korea, Netherlands, Turkey, Vietnam, Italy, Indonesia, Poland, Egypt, France, Thailand, New Zealand, Brazil, Russia, Mexico, Chile, Zimbawe, Denmark, Greece and many others. Presently, they majorly manufacture Microcrystalline Cellulose ('MCC'). It is widely used as texturizer, anticaking agent, binder, lubricant, a bulking agent, diluent which finds a wide range of applications in Pharmaceutical, Nutraceutical, Food, Cosmetic and other industries. They manufacture 22 grades of MCC, with particle sizes ranging from 20 microns to 180 microns. The major grades of MCC manufactured and marketed by the Company are branded under the name 'accel'. Besides 'accel' they also sell the products under the name 'acrocell', 'maccel' and 'Vincel'. The total installed capacity from the existing two facilities is 8,000 metric tonnes per annum and with the ongoing capex, the company is developing another facility at Navagam Kheda, which is expected to commercialised by March, 2025, they intend to add 2400 metric tonne which make the total capacity of the company as 10,400 metric tonnes per annum. As per financial performance, Accent Microcell Limited has posted total income / net profits of Rs 134.82 Cr / Rs 4.80 Cr (FY21), Rs 167.54 Cr / Rs 5.89 (FY22), Rs 206.96 Cr / Rs 13.01 Cr (FY23) and Rs 59.92 Cr / Rs 7.05 Cr (upto Q1 FY24). So as per previous financials data, company has shown good results, but sudden rise in net profit just before IPO is very surprising. Company has posted an average EPS of Rs 7.17 and average RoNW of 23.85% for last three fiscals. Issue is priced at a P/BV of 2.07 as per NAV of 67.55 as on post issue. If we attribute latest earnings of FY22, FY23 and annualised FY24 on fully diluted equity post issue, then asking price is at a P/E of around 49.99, 22.64 and 10.44 respectively, which looks fully priced. As per RHP, comparison between listed peers is shown in above table. On BRLM's front, Corporate Capitalventures Private Limited is associated with this SME IPO and handled 9 SME IPOs in last 3 years. From last 9 IPOs, two opened below issue price and remaining opened above issue price or at par on the listing day. As of now from last 9 IPOs, two are trading below issue price and remaining are trading above issue price. ( As on 05.12.23 ) As per financials, Accent Microcell Limited has shown good result, RoNW is 29.44% and P/E is respectively 49.99, 22.64 and 10.44 as per FY22, FY23 and annualised FY24 earnings. So, issue looks fully priced. Company is in business of manufacturing of Microcrystalline Cellulose. Performance of BRLM is good. So, we give SUBSCRIBE rating for this IPO. Readers must consult a qualified financial advisor prior to making any actual investment decisions.

• 1 Mr. Vasant Vadilal Patel
• 2 Mr. Ghanshyam ArjanBhai Patel
• 3 Mr. Nitin JasvantBhai Patel
• 4 Mr. VinodBhai ManiBhai Patel