Basilic Fly Studio Limited

As per financial performance Basilic Fly Studio Limited has posted total income/net profits of Rs 17.30 Cr / Rs 0.33 Cr (FY21) and Rs 24.00 Cr / Rs 0.79 Cr (FY22) and Rs 70.51 Cr / Rs 26.44 Cr (FY23), So company has shown good results, but sudden rise in net-profit just before IPO raises doubts. Company has posted an average EPS of Rs 11.72/- and average RoNW of 53.30% for last three fiscals. Issue is priced at a P/BV of 5.21 as per NAV of Rs 18.63/- as on 31.03.23. As per FY22 earnings on fully diluted equity post issue, asking price is at P/E of around 284.27 and as per FY23 earnings P/E is 8.53. As per RHP, comparison between listed peers is shown in above table, but showing such big company as peer is very surprising. On BRLM's front, GYR Capital Advisors Private Limited is associated with this SME IPO and handled 15 SME IPOs in last 3 years. From last 10 IPOs, all opened at par or above issue price on the day of listing. As of now from last 10 IPOs, three are trading below issue price and remaining are trading above issue price. ( As on 28.08.23 ) As per financials, Basilic Fly Studio Limited has shown good results, RoNW is 87.59% and P/E is respectively 284.27 and 8.53 as per FY22 and FY23 earnings. So as per FY22 earnings issue is very aggressively priced and as per FY23 earnings, its fairly priced. Also sudden rise in net-profit just before IPO raises concerns. Company is in business of providing VFX solutions for movies, TV, net series, and commercials, which is highly fragmented and competitive segment. But sector has good growth opportunity. Performance of BRLM is good. So we are giving SUBSCRIBE rating to this SME IPO. Readers must consult a qualified financial advisor prior to making any actual investment decisions.

• 1  Mr. Balakrishnan
• 2  Ms. Yogalakshmi S