Started in the year 2007, Ahmedabad - Gujarat based Arihant Institute Limited is a company engaged in providing coaching & educational guidance for students appearing for professional courses - Chartered Accountant, Company Secretary, and CMA. It provides the coaching and guidance from Entry level test exam till final exam and covers all the subjects in depth with test series to improve their confidence and overall result. The Company operates the educational program and coaching under the Brand Name ?Arihant Institute since inception. With dedicated professors and trained staff, it has given education to more than 10000 students appeared for professional & Graduates exam. The company's student strength has improved and with dedicated efforts of the promoters, from the institute, there were 205 National Rankers in CA Inters and Final Courses, 2000+ Chartered Accountant and 175+ Company Secretary. Arihant premises spread over 9,500 sq. feet which include 8 air-conditioned classrooms, well-equipped library, canteen, staff room, 2 studios, backup lab, conference room and large administrative blocks. The company has 23 employees on its payroll. To provide education at distance learning by, company has initiated:> Set up centres for live lectures in and around Ahmedabad> Develop the virtual classroom by providing link to Arihant portal to download & view the lecture> Provide Connectivity with E library, content of lectures and subject wise material> Provide the content and recorded lecture to student in Laptop, pen drive and e mail. As per financial performance, AIL has posted total income/net profits of Rs. 8.64 cr. / Rs. 0.16 cr. (FY13), Rs. 6.10 cr. / Rs. – (1.46) cr. (FY14), Rs. 3.86 cr. / Rs. 0.04 cr. (FY15), Rs. 1.67 cr. / Rs. –(1.45) cr. (FY16) and Rs. 1.69 cr. / Rs. 0.11 cr. (FY17). So there is continuous downward trend in top lines and inconsistency in bottom line with two fiscal i.e. FY14 and FY16 marking mega losses. For first 10 months ended on 31.01.18 of FY18 it has earned net profit of Rs. 0.12 cr. on total revenue of Rs. 1.12 cr. For last three fiscals, it has posted an average negative EPS as well as negative average RONW. Issue is priced at a P/BV of 3.59 on the basis of its NAV of Rs. 8.35 as on 31.01.18. If we annualise latest earnings and attribute it on fully diluted equity post issue, then asking price is at a P/E of around 200 against industry average of 26. As per offer documents it has shown Career Point, CL Educate, MT Educare, Siddharth Education as its listed peers and they are trading at a P/E of around 9, 23, 0 and 33 respectively. (as on 18.05.18). So issue is very much expensive. On BRLM's front, for Monarch Networth Capital Ltd, this is the 6th IPO since last three fiscals and out of recent 5 listings, one below issue price, 3 at par and one above issue price with 2% premium on the day of listing. As of now from last 5 IPOs, only one is trading above issue price and remaining below issue price or at par. So track record of BRLM is poor. As per financials, company's performance is not good, RoNW is negative for last three fiscals and issue is very highly priced as per latest earnings. BRLM's performance is also poor. So, We give AVOID rating to this SME IPO as per the current market condition.
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