Aelea Commodities Limited was engaged in Trading of Sugar, Cashew, Pulses and other Commodities product at the starting. Thereafter, they decided to venture into the business of Cashew Processing and setup a processing unit in the premises of Gujarat Agro Infrastructure Mega Food Park Near Town of Mota Miya Mangrol, Taluka Mangrol, District Surat, Gujarat, India. They specialize in the comprehensive processing and trading of cashews, catering to both the B2B and B2C markets. As on date of this Red Herring Prospectus, the Company has one Subsidiary viz., Supreme Commodities DMCC located at Dubai. The company is deeply entrenched in the processing and trading of cashews, while also actively engaged in the trading of a diverse range of commodities such as Sugar, Pulses, Soybean, Rice, Wheat Flour, and more. In the realm of cashews, they have presence in both B2B and B2C segments. On the other hand, the trade in products like Sugar, Pulses, Soybean, Rice, Wheat Flour, etc., is exclusively conducted through the B2B channel. The company engages in importing Raw Cashew Nuts (RCN) from diverse African nations, including Benin, Tanzania, Burkina Faso, Senegal, and Cote d’Ivoire, necessitating substantial quantities and tying up working capital funds. They specialize in trading RCN and Cashew Kernels for consumption. Additionally, it trades in by-products from sugar mills, such as Bagasse. The Company plans to start processing the Cashew Nut Shell into Cashew Nut Shell Liquid (CNSL) in phased manner. As of March 31, 2024, our company is utilising 95% (38 MT/Day of 40 MT/Day) of the installed capacity of the existing manufacturing unit. By installing new machinery in the existing processing unit and setting up of a new cashew processing unit and installation of plant & machineries thereon at non-agricultural open land situated at Taluka Mangrol, District Surat, Gujarat, India, they plan to optimize the production processes. They aim to significantly enhance the output of high quality cashew kernels and venture into further processing of the Cashew Nut Shell into Cashew Nut Shell Liquid (CNSL). Furthermore, installation of new plant and machinery at existing processing unit and proposed new plant they aim to significantly increase the installed capacity, by addition of 100 MT/Day, from 40 MT/Day to approx. 140 MT/Day and 50 MT of CNSL Oil. As per financial performance, Aelea Commodities Limited has posted total income / net profits of Rs 105.50 Cr / Rs 10.63 Cr (FY22), Rs 110.14 Cr / Rs 1.91 Cr (FY23), Rs 144.50 Cr / Rs 12.22 Cr (FY24), and Rs 27.58 Cr / Rs 2.80 Cr (31.05.25 FY25). So as per previous financials data, company has shown good growth. Company has posted an average EPS of Rs 5.68 and average RoNW of 21.04% for last three fiscals. Issue is priced at a P/BV of 2.92 as per NAV of 32.5 as on 31.05.24. If we attribute latest earnings of FY23, FY24 and annualized FY25 on fully diluted equity post issue, then asking price is at a P/E of around 101.19, 15.83 and 11.50 respectively, which looks fairly priced. As per RHP, comparison between listed peers is shown in above table. On BRLM's front, Ekadrisht Capital Private Limited is associated with this SME IPO and handled 2 SME IPOs in last 3 years. From last 2 SME IPOs, all opened above issue price or at par on the day of listing. As of now from last 2 SME IPOs, all are trading above issue price. ( As on 10.07.24 ) As per financials, Aelea Commodities Limited has shown good growth, RoNW is 26.61% and P/E is respectively 101.19, 15.83 and 11.50 as per FY23, FY24 and annualized FY25 earnings. So, issue looks fairly priced and post capacity expansion company may show good growth. Company is engaged in the business of trading of Commodities and Cashew Processing, which is highly fragmented and competitive business segment. Performance of BRLM is good. So, we give NEUTRAL rating for this IPO. Readers must consult a qualified financial advisor prior to making any actual investment decisions.
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