Mehai Technology Ltd

Started in 2013, Mehai Technology Ltd is engaged into manufacturing of LED Bulbs, Fixtures, Moon Light Bulbs, Tubelights as well as assembling of Pen Drives and Power Banks. They sell their products through a set of dealers / distributors who place their order and after receipt of order they cater to their markets. They majorly sell through online portals viz Flipkart, eBay, Amazon, Shopclues, PayTM etc. They are in process of launching IC based LED bulbs, this will place their brand among reputed LED lighting manufacturers. They are also planning to manufacturing of Pen Drives in near term. On performance front, MTL has posted turnover/net profits of Rs. 0.62 cr. / Rs. 0.01 cr. (FY15), Rs. 1.24 cr. / Rs. 0.02 cr. (FY16), Rs. 5.22 cr. / Rs. 0.31 cr. (FY17). For the first month ended on 30.04.17 of the current fiscal, it has earned net profit of Rs. 0.04 crore on a turnover of Rs. 0.29 crore. For last three fiscals it has reported weighted average EPS of Rs. 18.84 with an average RoNW of 43.34% on an equity capital of Rs. 1.29 crore. If we annualize one month earning of FY18 and attribute on fully diluted equity post issue, then asking price is at a P/E of 44 plus. As claimed in the prospectus it has no listed peers to compare with. Issue is priced at a P/BV of around 2.38. Thus issue is aggressively priced. On merchant banker’s front, this is the 1st mandate from its stable and it has no track records. As per financials, company's growth is good, RoNW is 43.34% for last three fiscals and issue is aggressively priced. But after demonetization organized players in this sector will get benefit and focus on LED lightings an added advantage,  so we give NEUTRAL rating to this SME IPO.

• 1  Mr. Sudhir Ostwal
• 2 Ms. Shalini Jain