Agarwal Float Glass India Limited, started in 2018, is engaged in the business of trading of glass and specialised glass products by procuring quality products from manufacturers and selling it either through the sales managers or directly to the customers, as a wholesaler of glass and glass products. Their customers are spread across the country and work across varied industry segments such as, office buildings, hotels, institutions, banks, insurance companies, shopping malls, diplomatic residences, etc. Their products cater to a range of end use industries including construction, automotive, and industrial sectors, with a variety of applications such as exterior and interior spaces of residential and commercial buildings. Company's product portfolio largely consists clear glass, different kinds of value-added glass products and processed glass products, of varying thickness. They also trade a range of value added glass products including clear frosted glass, clear sheet glass, mirror, tinted glass, reflective glass which have a wide range of applications. They also offer processed glass, which includes, toughened glass, frosted glass, frosted design glass, leaguered glass, figure glass, heat-strengthened glass, insulated glass, PVB laminated glass, and bullet-resistant glass and all building glasses among others. Company is highly dependent upon the suppliers and distributors, namely Saint-Gobain India Private Limited, Sisecam Flat Glass India Private Limited, Gold Plus Glass Industry Limited, Asahi India Glass Limited and Gujarat Guardian Limited, for delivering quality products to the customers. The Company is a wholesaler of glass and glass products, and operated from its Registered Office and godowns. Company primarily carried out its business in Rajasthan. As on September 30, 2022, the Company has employed 20 employees including the Directors, who look after the business operations, administrative, secretarial, marketing andaccounting functions in accordance with their respective designated goals. As per financial performance, Agarwal Float Glass India Limited has posted total income/net profits of Rs 32.27 Cr / Rs 0.08 Cr (FY20), Rs 31.88 Cr / Rs 0.24 Cr (FY21), Rs 42.17 Cr / Rs 1.02 Cr (FY22) and Rs 23.69 Cr / Rs 2.68 Cr (upto H1 FY23). So company has shown average sales growth, but jump in net profit just before IPO is very surprising. Company has posted an average EPS of Rs 2.99/- and average RoNW of 19.87% for last three fiscals. Issue is priced at a P/BV of 2.01 as per NAV of Rs 20.92/- post issue. As per FY22 earnings on fully diluted equity post issue, asking price is at P/E of around 29.96 and as per annualised FY23 earnings P/E is 5.69. As per RHP, there are no listed peers available. On BRLM's front, GYR Capital Advisors Private Limited associated with this SME IPO and handled 11 SME IPOs in last three years. From last 10 SME IPOs all opened above issue price or at par. As of now from last 10 IPOs, two are trading below and remaining are trading above issue price or at par. ( As on 06.02.2023) As per financials, Agarwal Float Glass Private Limited has shown average results, RoNW is 4.40% and P/E is respectively 29.96 and 5.69 as per FY22 and annualised FY23 earnings, which looks fairly priced. But it's only due to super profits in last one and half years and sustainability of same in future is very doubtful. Also company is in business of trading of glass & glass products which is highly competitive and fragmented. Also issue expenses is very high. So we are giving AVOID rating to this SME IPO.
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