Indifra Limited has developed a two-edged business model with a spectrum of services including pipeline and infrastructure management and distribution of electrical appliances as a trading vertical. They cater to various gas distribution companies for management of their gas distribution pipelines. Under this vertical, in past, they have catered to Adani Gas Limited. As on date, they cater to Charotar Gas Sahakari Mandali Limited (CGSML), for gas pipeline management services. They started the gas pipeline management services with CGSML the leading gas distribution company in the region and the world’s first co-operative Natural Gas Provider, in year 2022 with a proposition to collaborate and provide comprehensive gas pipeline management services in Charotar region of Gujarat. In FY 2017, the company seized upon an opportunity to expand its business horizon by venturing into the sales of electrical appliances. Recognizing the increasing demand for high-quality products that enhance the comfort and convenience of customers, the company became a key distributor for V Guard, a renowned brand in the electrical appliances industry, catering to the needs of customers in the Gujarat region. By leveraging its existing network and expertise in the gas pipeline management sector, they strategically capitalized on the synergies between the two businesses. The company's electrical appliances portfolio includes voltage stabilizers, induction cooktops, inverters, batteries, ceiling fans, domestic switch gears and distribution boards (DBs), air coolers, water heaters, modular switches, solar water heaters, air source heat pump water heaters, energy-saving fans, and room heaters. As per financial performance, Indifra Limited has posted total income / net profits of Rs 3.07 Cr / Rs 0.11 Cr (FY21), Rs 10.92 Cr / Rs 0.40 Cr (FY22), Rs 10.01 Cr / Rs 0.99 Cr (FY23) and Rs 0.64 Cr / Rs 0.04 Cr (upto Q1 FY24). So as per previous financials data, company has shown zig-zag results, and Q1 FY24 data is very poor. Company has posted an average EPS of Rs 3.78 and average RoNW of 74.40% for last three fiscals. Issue is priced at a P/BV of 2.45 as per NAV of 26.57 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 118.76, 47.82 and 658.13 respectively, which looks very aggressively priced. As per RHP, comparison between listed peers is shown in above table. On BRLM's front, Beeline Capital Advisors Private Limited is associated with this SME IPO and handled 25 SME IPOs in last 3 years. From last 11 IPOs, all opened above issue price or at par on the day of listing. As of now from last 11 IPOs, one IPO is trading below issue price and remaining are trading above issue price. ( As on 18.12.23 ) As per financials, Indifra Limited has shown zig-zag results, RoNW is 82.45% and P/E is respectively 118.76, 47.82 and 658.13 as per FY22, FY23 and annualised FY24 earnings. So, issue looks very aggressively priced. Also poor Q1 FY24 results and higher issue expenses raises doubts. Company is in business of a spectrum of services including pipeline and infrastructure management and distribution of electrical appliances as a trading vertical, which are highly competitive and fragmented segments. 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.
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