Navoday Enterprises Limited

Incorporate in 2007, Navoday Enterprises Limited treats marketing and advertising fundamental to business strategy and revenue management. The company provide Outdoor, Print, Ground events/activations and digital marketing. Company's primary offering is in outdoor or out-of-home media company also known as OOH advertising. Company's offering of outdoor media includes advertising on hoardings, billboards on road, highways, streets, lamp post boards, mobile sign trucks, kiosks, traffic booth etc. The company is also engaged in Events Management which includes planning, organising and managing events. The company manage commercial events, corporate events, cultural events and also small brand promotion events for the clients. The company is also engaged in branding and designing through print and online & digital media. The company also design various publicity materials for the clients such as pamphlets, brochures, flyers etc for their own consumption. The company have in-house design capabilities for the same. The company provides integrated solutions to the clients which includes management consultancy including market research, strategy, operations and process. The consultancy also includes crucial aspects like corporate finance, working capital finance, project finance and financial restructuring to corporate. The company is primarily focused on small and midsize enterprises (SMEs). On the financial performance front, NEL reported turnover/net profits (loss) of Rs. 23.11 cr./ 0.19 cr. (FY18), Rs. 16.51 cr./ 0.35 cr. (FY19) and Rs. 48.27 cr. / Rs. 1.12 cr. (FY20). For upto Q3 FY21, company has posted 14.84 Cr total income and 0.39 Cr net profit. So company has shown zig-zag results. For the last three years, company has posted average EPS of Rs. 4.99 and RoNW of 32.99%. The issue is priced at a P/BV of 0.98 based on its NAVs of Rs. 20.43 post issue. As per FY20 earnings, on fully diluted equity post issue, IPO is priced at P/E of around 6.84 and if we annualise FY21 earnings, then P/E is around 15. So issue looks fully priced. As per RHP, comparison between peers is shown in above table. On BRLM's front Inventure Banker Services Pvt. Ltd. has handled 2 IPOs in last three fiscals. From 2 IPOs, Both are opened above issue price. As of now from 2 IPOs, Both are trading above issue price . ( As on 11.06.2021 ) For Navoday Enterprises Limited, financials are zig-zag, RoNW is 39.26%, P/E is around 6.84 for FY20 and if we annualise FY21 earnings, then PE is around 15. So issue looks fully priced as per FY21 annualised profit. The marketing and event management business segment is highly competitive and also has huge growth potential. BRLM has handled very limited IPOs in last 3. So we give AVOID rating to this SME IPO.

• 1 Anand V. Mode
• 2 Synematic Media Consulting Pvt. Ltd.