Cell Point (India) Limited

As per financial performance, Cell Point (India) Limited has posted total income/net profits of Rs 278.12 Cr / Rs 1.6 Cr (FY20), Rs 223.56 Cr / Rs 0.69 Cr (FY21), Rs 270.04 Cr / Rs 1.65 Cr (FY22) and Rs 221.68 Cr / Rs 5.81 Cr (9M FY23), So company has shown average results, but the sudden rise in net profit in IPO year is very surprising. Company has posted an average EPS of Rs 11.6/- and average RoNW of 10.55% for last three fiscals. Issue is priced at a P/BV of 2.33 as per NAV of Rs 42.87/- post issue. As per FY22 earnings on fully diluted equity post issue, asking price is at P/E of around 113 and as per annualised FY23 earnings P/E is 24. As per RHP, comparison between listed peers are shown in above table. On BRLM's front, First Overseas Capital Limited is associated with this SME IPO and handled 15 SME IPOs in last 3 years. First Overseas Capital Limited : This is 16th IPO from this BRLM. From last 10 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 IPOs, five are trading below issue price and remaining are trading above issue price or at par. ( As on 02.06.23 ) As Per financials, Cell Point (India) Limited has shown average results, RoNW is 12.32% and P/E is respectively 113 and 24 as per FY22 and annualised FY23 earnings, which looks very aggressively priced. Also sudden rise in net profit just before IPO raises concerns. Company is in business of multi-brand retail selling of mobiles & related products, which is highly competitive and fragmented, with many players. Performance of BRLM is average. So we are giving AVOID rating to this SME IPO, readers must consult a qualified financial advisor prior to making any actual investment decisions.

• 1 Mr. Mohan Prasad Panday
• 2 Mr. Bala Balaji Panday