Aspire & Innovative Advertising Limited is engaged in the business of trading of wide range of consumer durables like kitchen appliances, home appliances, white goods, mobile phones and its accessories, solar products etc. of multiple renowned brands such as Bajaj, Prestige, Vivo, Samsung, Crompton, Whirlpool, Hindware, Havells and many more. The range of products are offered at different price points to meet diverse customer requirements across India along with delivery of products mainly in the rural and semi urban areas. They provide one platform that bring multiple brands under one umbrella so as to fulfil the requirements of the customer thus, improving their lifestyles. They started the business in 2017 with an objective of providing basic but advanced products to India’s rural and semi urban population along with product delivery up to customers’ doorstop, in rural and semi urban areas of the country with focus on un-banked and underbanked customer segments through partners working in this space. To achieve this objective, in addition to the sales team, they sell the product majorly through intermediaries i.e. Non - Banking Financial Companies (NBFCs), Micro Finance Institutions (MFIs) and there is no other trading platform for selling of products. They have entered into commercial arrangements with a large number of intermediaries like Non-Banking Financial Companies (NBFCs), Non-Banking Financial Companies (NBFCs)- Micro Finance Institutions (MFIs) along with Warehousing and Transportation facilities in 16 states in India. They have more than 15 intermediaries for marketing of the various products at various locations. They operate an asset light business model, where the major expenditure is for payment of facilitation fees & commission to these intermediaries for their services which include services like marketing of the products to their existing customer base in rural and semi urban communities, allowing the field staff & trainers to interact with their customers, collation of expected demand and providing banking and financial services to them for buying the products. Based on such expected demand, they place orders with related product companies to deliver the required products at the different warehouses across various states of India. For the purpose of storing and then delivering the products to customers, they have warehousing and transporting facility in 16 states of India from where they deliver these products at doorsteps of customers, mostly in the rural and semi-urban areas. For the period ending Sept. 30, 2023, March 31, 2023, March 31, 2022 & March 31, 2021, the total expenditure towards Facilitation Fees & commission expenditure accounted for Rs. 2908.89 lakhs, Rs. 6693.79 lakhs, Rs. 5791.94 lakhs & Rs. 2053.74 lakhs respectively. The product portfolio comprises of more than 50 products such as pressure cookers, induction cooktops, mixer-grinder, Dinner Sets, sewing machine, ceiling fan, iron, inverter bulbs, electric heaters, mobile phones, television, fridge, washing machine, headphones, solar lanterns etc. In addition to offering third-party brands, they started selling Stainless Steel Dinner Sets under the own brand name in 2022. Furthermore, in 2023, they expanded the product range to include pressure cookers, also, branded under the name i.e. “Aspire Classico”. These products are sourced or manufactured by third parties according to the specifications developed by them. For the period ending September 30, 2023 and F.Y ending March 31, 2023 the total turnover from sale of products under the own brand was Rs. 1838.45 lakhs and 1636.85 lakhs respectively, which constituted 10.82% and 5.21% of total revenue from trading business respectively. As per financial performance, Aspire & Innovative Advertising Limited has posted total income / net profits of Rs 108.33 Cr / Rs 2.28 Cr (FY21), Rs 255.58 Cr / Rs 4.37 Cr (FY22), Rs 346.20 Cr / Rs 5.31 Cr (FY23) and Rs 177.10 Cr / Rs 3.93 Cr (upto Q2 FY24). So as per previous financials data, company has shown good growth. Company has posted an average EPS of Rs 3.42 and average RoNW of 38.68% for last three fiscals. Issue is priced at a P/BV of 3.09 as per NAV of 17.5 as on 30.09.2023. If we attribute latest earnings of FY22, FY23 and annualised FY24 on fully diluted equity post issue, then asking price is at a P/E of around 18.74, 15.44 and 10.42 respectively, which looks fairly priced. As per RHP, there are no listed peers. On BRLM's front, Hem Securities Limited is associated with this SME IPO and handled 41 SME IPOs in last 3 year. From last 10 SME IPOs, one opened below issue price and remaining opened above issue price or at par on the day of listing. As of now from last 10 SME IPOs, three are trading below issue price and remaining trading above or at par issue price. ( As on 20.03.24 ) As per financials, Aspire & Innovative Advertising Limited has shown good results, RoNW is 34.22% and P/E is respectively 18.74, 15.44 and 10.42 as per FY22, FY23 and annualised FY24 earnings. So, issue looks fairly priced. Company is in business of trading of wide range of consumer durables, which is highly competitive and fragmented 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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