GSM Foils Limited is engaged in the business of manufacturing Blister Foils and Aluminium Pharma Foils (also known as “Strip Foils”) which is used in packing of pharmaceutical medicines which includes capsules and tablets both. This is a primary packaging material which comes in direct contact with the medicine, hence, utmost care is taken with regards to its quality. Over the past few years, they have acquired definite know how in different types of foils used in pharmaceuticals companies. They offer Aluminium foils in different sizes, shapes and thickness to meet diverse needs of the clients. The range of the products includes plain and printed aluminium foils and strip foils along with alu alu base foils and it ranges from 0.020/ 0.025/ 0.030/ 0.040 micron for coated /ploy laminated/ blister/ strip printed foils. Aluminium Foil or Strip Foils are one of the packaging options for highly sensitive pharmaceutical products that protects the medicines from oxygen, moisture, and other environmental influences. These foils are used in packaging of capsules which requires more bursting strength as they are bigger in size and is used to create a push-through closure with lid film where tablets and capsules are protected perfectly and hygienically. They have developed a manufacturing facility at Gala No 06/106/206/306, Sapphire Building, Diamond Industrial Estate, Vasai East IE, Thane, Vasai, Maharashtra, India, 401208 in 7,973 Sq. feet area with ground plus 3 floors for smooth execution of all the business operations. The manufacturing facilities are equipped with the necessary tools, machineries, other equipment’s and amenities, to support a seamless manufacturing process, hassle-free production, Quality testing, research, storage and packaging. All the machineries are periodically upgraded and lubricated with experienced personnel so as to retain production rate. Capacity utilization for period ended 31.03. 2023 , 2023, 2022 and 2021 are respectively 80%, 78%, 77% and 77%. The company have PAN India presence with the clientele base in 13 states and 1 Union territory for the domestic market based on sales made for the period ended December 31, 2023, June 26, 2023 and for the financial year ended March 31, 2023, 2022 and 2021 in states of Dadra & Nagar Haveli and Daman & Diu, Goa, Gujarat, Haryana, Himachal Pradesh, Jammu & Kashmir, Karnataka, Madhya Pradesh, Maharashtra, Puducherry, Sikkim, Tamil Nadu, Telangana and West Bengal. As per financial performance, GSM Foils Limited has posted total income / net profits of Rs 36.46 Cr / Rs 0.34 Cr (FY21), Rs 71.85 Cr / Rs 0.64 Cr (FY22), Rs 65.89 Cr / Rs 1.43 Cr (FY23) and Rs 38.10 Cr / Rs 1.75 Cr (upto Q3 FY24). So as per previous financials data, company has shown zig-zag results. Company has posted an average EPS of Rs 19.44 and average RoNW of 12.74% for last three fiscals. Issue is priced at a P/BV of 1.93 as per NAV of 16.62 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 64.36, 28.67 and 17.60 respectively, which looks fully priced. As per RHP, comparison between listed peers is shown in above table. On BRLM's front, Shreni Shares Limited is associated with this SME IPO and handled 26 SME IPOs in last 3 year. From last 10 SME IPOs, all opened above issue price on the day of listing. As of now from last 10 SME IPOs, one is trading below issue price and remaining are trading above issue price. ( As on 18.05.24 ) As per financials, GSM Foils Limited has shown good growth, RoNW is 17.11% and P/E is respectively 64.36, 28.67 and 17.60 as per FY22, FY23 and annualised FY24 earnings. So, issue looks fully priced. Company is in business of manufacturing Blister Foils and Aluminium Pharma Foils (also known as “Strip Foils”) which is used in packing of pharmaceutical medicines which includes capsules and tablets both, which is highly fragmented and competitive business segment. BRLM performance is good. So, we give NEUTRAL rating for this IPO. Readers must consult a qualified financial advisor prior to making any actual investment decisions.
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