Gleam Fabmat Limited

Started in June 2018, Delhi based Gleam Fabmat Limited is a company engaged in the trading of a wide range of aluminium products such as Aluminium Sheets, Aluminium Coils, Rivets and textiles products. Prior to conversion in public limited company it was a proprietary concern carrying business under the name J P Metals. The Company plans to leverage its promoter networks in the trading community to grow its business. It has expanded its verticals by venturing into Fabric segment. It is also developing a strong team to meet its proposed operational needs. On financial performance front, as per offer documents, GFL has shown just four month's working for a period from June 2018 to September 2018. On this performance with non annualised data it has posted an EPS of Rs. 11.43 and RoNW of 14.01%. Issue is priced at a P/BV of 0.86 on the basis of its NAV of Rs. 11.63 as on 30.08.18 and at a P/BV of 0.98 on the basis of post issue NAV of Rs. 10.20. For the 4 months period it has posted net profit of Rs. 0.21 cr. on a turnover of Rs. 10.22 cr. If we annualise latest earnings and attribute it on fully diluted equity post issue then asking price is at a P/E of around 16 despite being at par offer. As per offer document, it has shown Endurance Techno, MM Forging, Bharat Forge and Rico Auto as its listed peers. Although not strictly comparable, they are currently trading at a P/Es of around 53, 14, 27 and 13 (as on 12.02.19). As per offer documents, it has shown Garv Industry and Advitya Trade as its listed peers that are currently trading at a P/Es of around 46 and 138 (as on 16.02.2019 closing). Both these issues were from the same LM. However, they are strictly not comparable. On BRLM's front, for Aryaman Financial Services limited this is the 43rd IPO. From last 10 IPOs, 1 at par and remaining above issue price with around 2% above issue price at max. As of now, from last 10 IPOs, 1 is trading below issue price and remaining above issue price with gain of around 0 - 25%. ( As on 19.02.19 ) Company has shown very limited financial data, RoNW is 14.01% and issue looks fully priced with respect to current earnings. Performance of BRLM is good. Current market scenario is in down trend and company is very new with fully priced IPO on par issue price. So we give AVOID rating to this SME IPO.

• 1 Mr. Amit Gupta
• 2 Mr. Arun Gupta
• 3 Mr. Anil Kumar Gupta