Ishan International Limited

Silver Pearl Hospitality & Luxury Spaces Limited is a hospitality company and operate in the mid-priced hotel sector, consisting of the upper-midscale, midscale and economy hotel segment. Its current properties are located in Rakchham, Kinnaur, Himachal Pradesh. Company's first hotel property started operations in FY 19-20. They also operate a cafe? at Rakchham. All the hotels, cafes and restaurants are operated under the brand name 'Osiya'. Currently, they are operating with 36 rooms in 4 properties. Company owns, manages, operates and markets the hotels. They also operate restaurants and a cafe. The cafe? has seating capacity for 100 people. Company has entered into a MoU dated January 1, 2022 for Online Marketing and Branding of Tashi Dolma Home stay and Baba Inn Guest Home situated at Kinnaur, Himachal Pradesh on commission basis. As part of growth and geographical diversification strategy, they intend to purchase a hotel property in Goa. This property will increase the geographical reach and also provide the business during winter season from November to February which is comparatively a lean season for the properties situated in Rakkcham, Himachal Pradesh. The Company has entered into a Memorandum of Understanding dated January 12, 2022 for the purchase of property with the current owners at the price of Rs 680.00 Lakhs. The Company has paid an advance of Rs 30.00 Lakhs for the same and balance of Rs 650.00 Lakhs will be paid of the Net Proceeds of the Issue. As per financial performance, Silver Pearl has posted total income/net profits of Rs 0.29 Cr / Rs 0.005 Cr (FY20), Rs 0.18 Cr / Rs 0.03 Cr (FY21) and Rs 0.46 Cr / Rs 0.12 Cr (FY22). So company has shown average results. Company has posted an average EPS of Rs 0.64 and average RoNW of 2.59% for last three fiscals. Issue is priced at a P/B of 1.06 as per NAV of Rs 17.02 post issue. As per FY21 earnings on fully diluted equity post issue, asking price is at P/E of around 428 and as per FY22 earnings P/E is 121. As per RHP, Comparison between listed peers are shown in above table.     On BRLM's front, Inventure Merchant Banker Services Private Limited, is associated with this SME IPO and handled 5 IPOs in last 3 years. From last 5 IPOs, 3 opened above issue price and remaining below issue price or at par. As of now from last 5 IPOs, one is trading above and remaining are trading below issue price or at par. ( As on 31.05.22 ) As per financials Rhetan TMT Limited, has shown good growth in top line, RoNW is 10.14% and P/E is respectively 825 and 52 as per FY21 and FY22 earnings, which looks aggressively priced. Also sudden jump in margin for net profit in IPO year raises questions. Company is in construction related industry and is highly competitive, but also growth opportunity.  Performance of BRLM is average. So we are giving AVOID rating to this IPO.

• 1 Mr. Shantanu Srivastava