Euro Panel Products Limited is engaged in the business of manufacturing and supplying of Aluminium Composite Panels (ACPs) globally. ACPs are kind of panels, which are widely used as an exterior covering of commercial buildings and corporate houses due to its durability and easy maintenance in almost any kind of climate. Company manufactures ACPs at the factory unit located at Umbergaon, Gujarat and the Head Office is located at Mumbai, Maharashtra. They operate through the distribution channels on PAN India basis, through the depots, distributors and dealers. As on the date of this Prospectus the Company has more than 79 distributors and 67 dealers. Currently, the depots are located at Chhattisgarh, Delhi, Gujarat, Madhya Pradesh, Maharashtra, Uttar Pradesh through which products are supplied to the customers, distributors and clients. Under 'Eurobond', they offer a wide portfolio of ACPs that complements the architectural structures in India. Company has been associated with various organizations which includes Government Organizations, Hospitals, Multi-Speciality Hospitals, Airports etc. In past, they have entered the foreign market and have been exporting the products in USA, South Africa, Uganda, Nigeria, Tanzania, Sri Lanka and Nepal since year 2014. Company has been recognised as One Star Export House by Ministry of Commerce and Industry. Euro is also an Annual Member of Indian Green Building Council (IGBC). On the financial performance front, Euro Panel Products Limited has posted turnover/net profits (loss) of Rs 108.67 Cr / 3.93 Cr (FY19), Rs 142.99 Cr / Rs 396 Cr (FY20), Rs 143.30 Cr / 3.70 Cr (FY21) and Rs 31.90 Cr / Rs 1.87 Cr (Q1 FY22). So Company has shown almost static results, but sudden rise in net profit in Q1 FY22 raises questions. For the last three years, company has posted average EPS of Rs. 2.44 and RoNW of 15.42%. The issue is priced at a P/BV of 2.19 based on its NAV of Rs 31.90 post issue. As per FY21 earnings, on fully diluted equity post issue, IPO is priced at P/E of around 46 and if we annualise FY22 earnings then P/E is 23. So issue looks aggressively priced. As per RHP, there are no listed peers. On BRLM's front, Fedex Securities Limited associated with this SME IPO and handled 13 IPOs in last 3 years. From last 10 IPOs, one opened below issue price and remaining above issue price or at par. As of now from 10 IPOs, four are trading below and remaining is trading above issue price or at par. (As on 14.12.21 ) For Euro Panel Product Private Limited financials are average, RoNW is 15.42% and P/E is respectively 46 and 23 as per FY21 and annualised FY22 earnings, so issue looks aggressively priced. Also sudden rise in Q1 FY22 profit raises concerns. Performance of BRLM is average. So we give AVOID rating to this SME IPO.
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