Nanavati Ventures Limited

Started in 2010, Nanavati Ventures Limited is a Diamond Trading company. The company sells diamonds largely to a domestic customer base that includes jewellery manufacturers, large department store chains, retail stores, and wholesalers. The company is located in Surat, Gujarat. Company was engaged into the business of trading of diamonds since the day of incorporation. They procure the rough and unpolished diamonds in several sizes and shapes from the suppliers and then the processing and polishing of rough gemstone is done by skilled workers on job-work basis. As per financial performance, NVL has posted total income/net profits of Rs 0.55 Cr / Rs 0.00 Cr (FY19), Rs 5.95 Cr / Rs 0.05 Cr (FY20), Rs 11.32 Cr / Rs 0.12 Cr (FY21) and Rs 10.50 Cr / Rs 0.10 Cr (9M FY22). So company has shown improvements in results. Company has posted an average EPS of Rs 139.92 and average RoNW of 199.79% for last three fiscals. Issue is priced at a P/B of 1.19 as per NAV of Rs 42.02 post issue. As per FY21 earnings on fully diluted equity post issue, asking price is at P/E of around 69 and as per annualised FY22 earnings P/E is 62. As per RHP, Comparison between listed peers are shown in above table.     On BRLM's front, First Overseas Capital Limited associated with this SME IPO and handled 11 IPOs in last 4 years. From last 10 IPOs, 8 opened above issue price and remaining below issue price or at par. As of now from last 10 IPOs, three are trading above and remaining are trading above issue price or at par. ( As on 25.04.22 ) As per financials NVL, has shown above average results, RoNW is 1.94% and P/E is respectively 69 and 62 as per FY21 and annualised FY22 earnings, which looks aggressively priced. The Jewellery sector is highly competitive and there is nothing special with this company. Performance of BRLM is poor post listing. So we are giving AVOID rating to this IPO.

• 1 Mr. Shreykumar Hasmukhbhai Sheth
• 2 Mrs. Kashmira Hemantkumar Nanavati
• 3 Ms. Vaishnavi Hemantkumar Nanavati