Arham Technologies Limited

Arham Technologies Limited is engaged in assembling / manufacturing of LED Smart Televisions, with different screen sizes under their brand 'STARSHINE'. They also manufacture Fans, Air Coolers and Mixer Grinders through third party manufacturers under the brand 'STARSHINE'. They have network of dealers and distributors across Chhattisgarh, Madhya Pradesh, Odisha, Vidarbha, Andhra Pradesh and parts of Uttar Pradesh. Company also serves under Original Equipment Manufacturer ('OEM') business models for LED Televisions. Under the OEM model, they manufacture and supply products as per the requirements of the customers, who then further distribute these products under their own brands. With primary focus on quality, Arham Technologies Limited has been catering to a number of regional brands in Central India. With serving Original Equipment Manufacturer (OEM), they have adopted a cost-effective pricing strategy which gives the clients an upper hand over other brands. The Company's Installed capacity as on March 2022 is 84,000 nos. per annum. The company's capacity utilization in FY22, FY21 and FY20 is respectively 86.86, 75.83 and 76.67% with production capacity 84,000, 60,000 and 36,000 units in respective year.  The total strength of manpower as on date of this prospectus is 48 employees. As per financial performance, ATL has posted total income/net profits of Rs 13.79 Cr / Rs 0.57 Cr (FY20), Rs 22.80 Cr / Rs 2.03 Cr  (FY21), Rs 37.87 Cr / Rs 3.02 Cr (FY22) and Rs 21.40 Cr / Rs 1.28 Cr (6M FY23). So company has shown good results. Company has posted an average EPS of Rs 3.69 and average RoNW of 42.21% for last three fiscals. In FY22 trade receivables are around 25% of total sales, which is very high. Issue is priced at a P/B of 1.97  as per NAV of Rs 21.27 post issue. As per FY22 earnings on fully diluted equity post issue, asking price is at P/E of around 11.77 and as per annualised FY23 earnings P/E is 13.84. On BRLM's front, Hem securities Limited is associate with this IPO, and have handled around 28 IPOs in last three fiscals. From last 10 IPOs, two opened below issue price and remaining above issue price or at par on the day of listing. As of now, from last 10 IPOs, five are trading below issue price and remaining above issue price or at par.  ( As on 30.11.22 ) As per financials, ATL has shown good results, RoNW is 42.33% and P/E is respectively 11.77 and 13.84 as per FY22 and annualised FY23 earnings, which looks fairly priced. Company is in business of LED Smart TVs and other electrical products and this segment is expected to grow at good rate in next couple of years. Performance of BRLM is average.  So we are giving "SUBSCRIBE WITH CAUTION" rating to this IPO and risk taking investors may apply for listing gains as well as long term.

• 1 Mr. Roshan Jain
• 2  Mr. Ankit Jain
• 3  Mr. Anekant Jain