Creative Graphics is a pre-press company, engaged in the manufacturing of flexographic printing plates including Digital Flexo Plates, Conventional Flexo Printing Plates, Letter Press Plates, Metal Back Plates, and Coating Plates. The company is serving the customers across India as well as outside India namely African Countries, Thailand, Qatar, Kuwait and Nepal. Beyond the core business, they have expanded the horizons through the 2 (two) wholly owned subsidiaries, which are: - 1. Creative Graphics Premedia Private Limited 2. Wahren India Private Limited Creative Graphics Premedia Private Limited (Hereinafter refer as 'CG Premedia'): CG Premedia is an end-to-end provider of premedia services, from design adaptation to print production. CG Premedia collaborate and strategize directly with various brands to provide our services in artwork, prepress, mock-ups and 3 D packshots. CG Premedia is an integrated studio that combines all the activities together to help bring life to a company’s brand and ultimately fuel sales. The company was incorporated in the year December 2021 and in a short span it had served various well known corporate houses such as ITC, TATA Consumers, MARS, Cavin Kare, Haldiram, Dabur India, KRBL, Himalaya, Hamdard Laboratories, and many more. Wahren India Private Limited (Hereinafter refer as “Wahren India”): Wahren is a diversified arm of Creative Graphics group, we incorporated Wahren India Private Limited on May 24, 2022 with intent to provide high-quality packaging solutions for the pharmaceutical industry. Wahren India is primarily dedicated to production of Alu-Alu Foil, Blister Foil, Tropical Alu-Alu Foil, CR Foil, Pharmaceutical Sachet. As per financial performance, Creative Graphics Solutions India Limited has posted total income / net profits of Rs 48.04 Cr / Rs 2.28 Cr (FY21), Rs 68.68 Cr / Rs 4.65 Cr (FY22), Rs 91.78 Cr / Rs 8.64 Cr (FY23) and Rs 48.46 Cr / Rs 7.24 Cr (upto Q2 FY24). So as per previous financials data, company has shown very good growth, but sudden rise in net-profit just before IPO raises doubts. Company has posted an average EPS of Rs 83.16 and average RoNW of 45.42% for last three fiscals. Issue is priced at a P/BV of 2.58 as per NAV of 32.9 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 44.38, 23.89 and 14.25 respectively, which looks fully priced. As per RHP, there are no listed peers. On BRLM's front, Corporate Capital Ventures Private Limited is associated with this SME IPO and handled 11 SME IPOs and 1 Main Board IPO 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 and from last 1 Main board IPO, that is opened above issue price. As of now from last 10 SME IPOs, one is trading below issue price and remaining trading above or at par issue price and from last 1 Main board IPO, that is trading above issue price. ( As on 22.03.24 ) As per financials, Creative Graphics Solutions India Limited has shown good results, RoNW is 45.42% and P/E is respectively 44.38, 23.89 and 14.25 as per FY22, FY23 and annualised FY24 earnings. So, issue looks fully priced, but sudden rise in net-profit just before IPO is very surprising. Company is in business of manufacturing of flexographic printing plates, th segment is expected to do well in future also. Performance of BRLM is good. So, we give SUBSCRIBE rating for this IPO. Readers must consult a qualified financial advisor prior to making any actual investment decisions.
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