Kotyark Industries Limited

Kotyark Industries Limited is primarily engaged in the manufacturing of Bio Fuel which is an alternative source of energy and has the ability to replace and a good substitutes of traditional fossil fuels like coal, firewood, lignite, etc. The company is serving towards renewable green energy and sustainable development of renewable natural resources (Biofuels) through the adoption of environmentally friendly technology that favors the net reduction of greenhouse gas emissions for use in a vehicle for public and private transport as well as various equipment and Gen Sets. Company believes in qualitative production matching the customer requirements, timely deliverables and cost efficiency and have thereby developed a long-continuing relationship with the customers. With the experience of the Promoter, technological drive, continuous research, supplier tie-ups, customer relationships, government support and industry demand for biofuel, The Company is one of the key players across the state of Gujarat and Rajasthan in bio-fuel sector and has plans to expand its presence on PAN India basis On the financial performance front, Kotyark Industries Limited reported turnover/net profits (loss) of Rs. 37.56 Cr./ 0.58 Cr. (FY19), Rs. 25.78 Cr / 0.49 Cr. (FY20), Rs. 65.29 Cr. / 1.04 Cr. (FY21) and Rs. 28.11 Cr/ 0.52 Cr. (Q1FY22). So company has Shown good growth. For the last 3 years, company has posted average EPS of Rs. 2.70 and RoNW of 29.78%. The issue is priced at a P/BV of 2.48 based on its NAV of Rs. 20.53 post issue. As per FY21 earnings and on post issue equity, IPO is valued at P/E of around 40.42 and as per FY22 annualised earnings P/E is 20.45 which looks fully priced. As per RHP, there is no listed peers. On BRLM's front, Beeline Broking Limited associated with this SME IPO and handled 11 IPOs in last 3 years. From last 10 IPOs, seven opened below issue price and remaining above issue price. As of now from 10 IPOs, three trading below issue price and remaining are trading above issue price. (As on 18.10.21 ) For Kotyark Industries Limited, financials are good, RoNW is 32.79% and P/E is around 40.42 for FY21, so issue looks fully priced. The renewable green energy sector is demand of time and GoI is also pushing this sector, so we expect good growth of the sector. Performance of BRLM is average. So we give NEUTRAL rating to this SME IPO.

• 1  Mr. Gaurang Rameshchandra Shah