MRC Exim Limited

Started in Oct 2015, MRC Exim Limited is Mumbai based company engaged in the business of trading of various industrial, metals and alloy products including iron and steel. MRC Exim is multi-product trading company with a diverse product portfolio. The product portfolio of the company includes product such as GI Pipes, Insulators, Transmitter, Heat Exchangers, Conductors, Water Pumps, Graphite, Cobalt, Tungsten, Aluminum, Coil & Steel Pipe, D1 Tool Steel, D2 Tool Steel and Tool Steel HSD amongst others. MRC Exim serves the corporate and other clients from fabrication and manufacturing industry. MRC directly buy its required products from manufacturers. Hence they get the products modified as per their customer’s specifications. On performance front, MRC has reported turnover/net profits of Rs. 4.09 cr. / Rs. 0.01 cr. (FY16) and Rs. 16.70 cr. / Rs. 0.12 cr. (FY17). For first half of current fiscal it has posted net profit of Rs. 0.05 cr. on a turnover of Rs. 9.07 cr. For last two and half fiscals it has reported an average EPS of Rs. 0.42 per share and average RoNW of 5.25%. Issue is priced at a P/BV of 1.48 on the basis of NAV as on 30.09.17 and at a P/BV of 1.30 on the basis of post issue NAV. If we annualize latest earnings and attribute it on fully diluted equity post issue, then asking price is at a P/E of around 150 against industry average of 66. Thus issue is priced exorbitantly. On merchant banker’s front, this is the 4th mandate from its stable and last three listings after opening at a premium, close at a discount to offer price on the day of listing. As per financials, company's growth is good, RoNW is 1.59% for FY17 and issue is very aggressively priced as per latest earnings. So, we give AVOID rating to this SME IPO.

• 1 Mr. Kirit Kumar Shah
• 2 Mr. Chandu K.Jain