Associated Coaters Limited is engaged in the business of providing services by way of pre-treatment and powder coating of aluminium extrusions in Architect and Real Estate Industry. The process begins with a comprehensive cleaning, where the targeted surface of aluminium extrusions is thoroughly cleansed of any dirt, grease, or contaminants that might impede the subsequent coating process. Following this, a strategic chemical solution is applied to enhance the adhesion of the powder coating. This involves the application of an acidic solution for surface etching or the use of a specialized pretreatment agent to optimize surface wettability. Located in Vivekanandapur, 24 Paraganas (south), Kolkata, the company takes pride in providing timely and efficient deliveries of powder-coated aluminium sections across Kolkata, Orissa, Siliguri, Bihar, and Jharkhand. Over the six-year journey, they have evolved into the Approved Applicator of Akozonobel, Jotun, and Asian Paints in Architectural coating. The yearly capacity is 1,200 metric tons which includes Automatic Coating Plant and Manual Coating Plant, making them a growing player in eastern India in terms of aluminium extrusion coaters. The Continuous investments in cutting-edge equipment have positioned them at the forefront of technology. Currently, they operate two manual powder coating plants and a fully automatic powder coating plant established in July 2017. The commitment to innovation is evident in the installation of a Decoral wood finish line in September 2017 and a PVDF Coating Line in 2023. Striving for quality in the installation of a Decoral wood finish line in September 2017 and a PVDF Coating Line in 2023. Striving for quality improvement is at the core of the mission. The full immersion pre-treatment process, closely monitored by the chemical supplier, plays a crucial role in maintaining high standards. Combined with the use of architectural-grade super durable powder, they ensure the delivery of top-notch quality. The team of skilled supervisors is dedicated to delivering outstanding results, tailored to the specific needs of the clients. With a committed workforce, inherent strength, and collaborations with fabricators, they adapt the services to assist businesses in achieving their goals. The instrumental role played by the Promoter and Key Managerial Personnel in the company's growth is noteworthy. Before incorporating the company, the Promoter successfully executed large-scale projects through a sole proprietorship established in 2006 for powder coating contracts. With a robust management team boasting significant industry experience, they attribute the market position to the vision of the Promoters and senior management team, each with over a decade of experience in the industry. As per financial performance, Associated Coaters Limited has posted total income / net profits of Rs - Cr / Rs (0.001) Cr (FY21), Rs 1.39 Cr / Rs 0.13 Cr (FY22), Rs 3.58 Cr / Rs 0.54 Cr (FY23) and Rs 3.97 Cr / Rs 0.75 Cr (upto Q3 FY24). So as per previous financials data, company has shown good growth. Company has posted an average EPS of Rs 3.41 and average RoNW of 66.03% for last three fiscals. Issue is priced at a P/BV of 3.06 as per NAV of 39.58 as on Post issue. 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 119.41, 30.13 and 16.19 respectively, which looks fully priced. As per RHP, there is no listed peers. On BRLM's front, Gretex Corporate Services Limited is associated with this SME IPO and handled 22 SME IPOs in last 3 year. From last 10 SME IPOs, two 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, two are trading below issue price and remaining are trading above issue price. ( As on 28.05.24 ) As per financials, Associated Coaters Limited has shown good results, RoNW is 77.19% and P/E is respectively 119.41, 30.13 and 16.19 as per FY22, FY23 and annualised FY24 earnings. So, issue looks fully priced, but higher issue expenses raises some doubts. Company is in the business of pre-treatment and powder coating of aluminium extrusions in Architect and Real Estate Industry, which is highly competitive and fragmented segment. Performance of BRLM is good. So, we give AVOID rating for this IPO. Readers must consult a qualified financial advisor prior to making any actual investment decisions.
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