Meson Valves India Limited

As per financial performance, Meson Valves India Limited has posted total income/net profits of Rs 15.42 Cr / Rs 0.11 Cr (FY21) and Rs 14.31 Cr / Rs 2.12 Cr (FY22) and Rs 37.19 Cr / Rs 4.52 Cr (FY23), So company has shown good results, but sudden rise in bottom-line before IPO is very surprising. Also trade receivables are around 41% of FY23 total revenue. Company has posted an average EPS of Rs 4.36/- and average RoNW of 24.48% for last three fiscals. Issue is priced at a P/BV of 2.65 as per NAV of Rs 38.47/- as on post issue. As per FY22 earnings on fully diluted equity post issue, asking price is at P/E of around 48.77 and as per FY23 earnings P/E is 22.91. As per RHP, there are no peers. On BRLM's front, Shreni Shares Limited is associated with this SME IPO and handled 19 SME IPOs in last 3 years. From last 10 IPO, one opened below issue price and remaining opened at par or above issue price on the listing day. As of now from last 10 IPO, all are trading above issue price. ( As on 06.09.23 ) As per financials, Meson Valves India Limited has shown good results, RoNW is 24.46% and P/E is respectively 48.77 and 22.91 as per FY22 and FY23 earnings. As per FY22 earnings issue looks aggressively priced and as per FY23 earnings issue looks fully priced. Also sudden rise in net profit and higher value of trade receivables are very surprising. Company is in business of supplying of valves, actuators, Strainers and remote-control valves systems to the industries both in domestic and international markets, which is highly fragmented and competitive segment. Performance of BRLM is very good. So we are giving AVOID rating to this SME IPO. Readers must consult a qualified financial advisor prior to making any actual investment decisions.

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