Fabino Life Sciences Limited

Fabino Life Sciences Ltd is engaged in manufacturing, marketing, trading and Packing of pharmaceutical and other wellness focused consumer products, Company's core business is marketing of Pharmaceutical formulation & products in domestic market through own distribution network and sales force under own brand name, getting the Ayurvedic formulations manufactured through loan licensing facilities, packing, labeling etc. They export wellness and FMCG products like Coffee, Malt powder, Protein powder, Hair shampoo which are marketed by them. Company has over 70 launched and active products available in market categorized into (i) Allopathic (ii) Covid 19 (iii) Food & Wellness (iv) Herbal (v) Veterinary (vi) Multi-Vitamin segments. The shampoo and hair maintenance products from the company are under the brand - Keepshine, while all the others products are marketed under the brand - Fabino. The company has its manufacturing unit in the National Capital Region, India. Some of the products are manufactured by them in house at the processing centre in Sonipat Haryana, some of the products are manufactured at the contract manufacturing facility in Haryana and other product range is manufactured by third party manufacturers on made to order basis as per the instructions. As per financial performance, Febino Life Sciences Limited has posted total income/net profits of Rs 2.76 Cr / Rs 0.0001 Cr (FY19), Rs 7.51 Cr / Rs 0.06 Cr (FY20), Rs 3.05 Cr / Rs 0.03 Cr (FY21) and Rs 1.12 Cr / Rs 0.01 Cr (Q1 FY22). So company has shown poor results over last couple of years. Company has posted an average EPS of Rs 0.63 and average RoNW of 4.58% for last three fiscals. Issue is priced at a P/B of 1.66 as per NAV of Rs 21.70 post issue. As Per FY21 earnings on fully diluted equity post issue, asking price is at P/E of around 252 and as per annualised FY22 earnings P/E is 135. As per RHP, Comparison between listed peers are shown in above table, but they can't be compared on apple to apple basis.  On BRLM's front, Aryaman Financial Services limited  associated with this SME IPO and handled 16 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, one are trading below and remaining is trading above issue price or at par. ( As on 29.12.21 ) For FLSL Limited, financials data are poor, P/E is respectively 252 and 135 as per FY21 and annualised FY22 earnings, which looks very aggressively priced. Pharmaceuticals and Wellness sector has shown good growth and will remain growing for next couple of years. Performance of BRLM is good. So we give AVOID rating to this SME IPO.

• 1 Atul Kumar Jain