Greenhitech Ventures Limited

Greenhitech Ventures Limited company is engaged in trading of various petroleum-based products for the different categories of industries based on their requirement. This includes supply of biofuels, bitumen, light density oils, furnace oils etc. The company is also engaged in Operation & Maintenance as Job worker for Ethanol manufacturing in Government owned distilleries. They provide business solutions and services to consumers of Fuels and other alternative materials across India. The company is engaged in Operation & Maintenance as Job worker for Ethanol manufacturing in Government owned distilleries. Company is not having its owned manufacturing unit. The Company bids for tender of Government owned distillery for Operation & Maintenance as Job worker for Ethanol manufacturing. After receipt of tender, the company runs the ethanol plant in government owned distillery and manufacture ethanol and transfer all ethanol manufactured to the respective distillery. Hence there is no procurement and selling of Product for ethanol manufacturing as the Company manufacturer ethanol in government owned distillery for transferring to them only. As per financial performance, Greenhitech Ventures Limited has posted total income / net profits of Rs 40.07 Cr / Rs 0.24 Cr (FY21), Rs 66.11 Cr / Rs 1.35 Cr (FY22), Rs 25.04 Cr / Rs 0.57 Cr (FY23) and Rs 4.75 Cr / Rs 0.41 Cr (upto 31.01.24 FY24). So as per previous financials data, company has shown declining results. Trade receivable is around 71% of FY23 total sales. Issue is priced at a P/BV of 1.91 as per NAV of 26.31 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 17.39, 41.06 and 54.95 respectively, which looks aggressively priced. As per RHP, there is no listed peers. On BRLM's front, Expert Global Consultants Private Limited is associated with this SME IPO and handled 10 SME IPOs in last 2 year. From last 10 SME IPOs, all opened above issue price or at par on the day of listing. As of now from last 10 SME IPOs, three are trading below issue price and remaining are trading above or at par issue price. ( As on 06.04.24 ) As per financials, Greenhitech Ventures Limited has shown zig-zag results, RoNW is 18.14% and P/E is respectively 17.39, 41.06 and 54.95 as per FY22, FY23 and annualised FY24 earnings. So, issue looks aggressively priced and higher trade receivables is also big problem. Company is engaged in trading of various petroleum-based products, which is highly competitive and fragmented segment. Performance of BRLM is good. So, we give AVOID rating for this IPO. Readers must consult a qualified financial advisor prior to making any actual investment decisions.

• 1 Mr. Naved Iqbal
• 2 Mr. Mohammad Nadeem