Evoq Remedies Limited IPO

Evoq Remedies Limited is one of the recognized trading house of Pharmaceuticals Raw Materials, Excipients, Bulk Drugs at affordable price catering to the customers located in Ahmedabad. They procure the pharmaceuticals Raw Materials products and chemicals from the suppliers which are having WHO-GMP approved production facilities in India and by focusing on the first-class distribution expertise. EVOQ Remedies Limited is specializes in offering quality products and affordable trading in Gujarat. EVOQ is have a team of focused industry experts, who have in-depth knowledge of the industry and have with them expertise in offering best solutions for meeting their specific needs. They procure all the products from certified & reliable Manufacturers & Importers, who follow procedures as per the stringent national and international quality and safety standards.  The company operates on third party deals and has no assets of its own. As of December 31, 2021, it had 8 employees on its payroll.  As per financial performance, EVOQ has posted total income/net profits of Rs 3.25 Cr / Rs 0.01 Cr (FY19), Rs 9.07 Cr / Rs 0.0003 Cr (FY20), Rs 10.02 Cr / Rs 0.71 Cr (FY21) and Rs 10.56 Cr / Rs 0.93 Cr (upto 10.02.22 FY22). So company has shown average results and super earnings in IPO year is very surprising. Company has posted an average EPS of Rs 5.05 and average RoNW of 57.41% for last three fiscals. Issue is priced at a P/B of 1.66 as per NAV of Rs 16.22 post issue. As per FY21 earnings on fully diluted equity post issue, asking price is at P/E of around 51.50 and as per annualised FY22 earnings P/E is 33.96. As per RHP there are no listed peers.     On BRLM's front, Swastika Investment Limited associated with this SME IPO and has not handled any SME IPO in last 3 years. ( on 23.03.22 ) As per financials, EVOQ has shown average results, RoNW is 96.94% and P/E is respectively 52 and 34 as per FY21 and annualised FY22 earnings, which looks aggressively priced and also sudden rise in profit in IPO year raises concerns. So we are giving AVOID rating to this IPO.

• 1 Mr. Bhumishth Narendrabhai Patel
• 2 Mrs. Payal Bhumishth Patel