Started in 1985, Ambani Organics Limited is Thane - Maharastra based company, engaged in the business of speciality chemicals for more than 3 (three) decades. Company is a manufacturer, processor, importer, supplier and exporter of water based speciality chemicals used in Paper Industry, Paint Industry, Textile Industry, Carpet Industry, Adhesive Industry, etc. They are an 'ISO 9001:2015 – Quality Management System' certified company and they have also obtained GOTS (Global Organic Textiles Standards) certification for some of their textile industries chemicals. AOL has 2 (two) manufacturing facilities in Maharashtra located adjacent to each other. Company has currently 2000 MT installed capacity and is operating around 47.50% capacity utilisation. Company is planning to enhance capacity to 2500 MT in FY1819 and 3000 MT in FY1920. Company has a dedicated in-house Research & Development and Quality Assurance/Quality Control Team which undertakes rigorous testing and quality management. As on March 31, 2018, Company had 80 employees on payroll. AOL manufactures a wide range of products which can be classified into Textile Auxiliaries, Acrylic Polymers, Binders and Paint Driers. Major raw materials are Butyl, Styrene Acrylic, Acrylamide, Dowfax, Potassium Persulfate. Raw materials are sourced through both domestic and international manufacturers and traders. As per financial performance, company has posted total income/net profits of Rs. 34.20 cr. / Rs. 0.32 cr. (FY14), Rs. 37.66 cr. / Rs. - (2.44) cr. (FY15), Rs. 32.91 cr. / Rs. - (0.39) cr. (FY16), Rs. 52.90 cr. / Rs. 0.80 cr. (FY17) and Rs. 65.58 cr. / Rs. 1.91 cr. (FY18). So company's performance is zig-zag and there is great improvement in top-line and bottom-line in last two fiscals. If company can maintain same performance in future, is a big question. For last three fiscals, it has posted an average EPS of Rs 2.95 and an average RoNW of 20.03%. Issue is price at P/BV of 2.34 based on its NAV of 28.23 post issue. If we take latest earnings of FY18 and attribute it on fully diluted equity post issue, then asking price is at a P/E of around 17 plus, against industry average P/E of 33. As per offer documents it has shown Nikhil Adhesives Ltd as its listed peer who is currently trading at a P/E of around 20.17 (as on 03.07.18). So issue is fully priced as per latest earnings. On BRLM's front, for Aryaman Financial Services Limited this is the 35th IPO and from last 10 IPOs, 3 opened below issue price, 3 at par and other listed with 1% to 10% 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 02.07.18 ) As per financials, company's performance in last two fiscals improved greatly, RoNw is 20.03% for last three fiscals and issue is fully priced as per latest earnings. Company is planning to expand its capacity and utilisation, that may increase its top-line and bottom-line. Performance of BRLM is also not good. So we give NEUTRAL rating to this SME IPO as per current market situation.
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