Osia Hyper Retail Limited

Incorporated in 2013, Ahmedabad-based Osia Hypermart Retail Limited is an emerging retail supermarket chain. It focuses on value retailing by offering products at competitive pricing. Currently, the brand has 11 distribution stores across five cities (Ahmedabad, Vadodara, Dehgam, Gandhinagar and Gandhidham) in Gujarat. Each Osia shopping store is segregated into different segment such as crockery, Handbags, Women's wear, Cosmetics, Footwear,Menswear, handlooms, etc. It has more than thousands of products focused on fulfilling every need of a family. The Osia is a distributor which sources the products from Calcutta, Mumbai, Delhi, Surat, Agra, Ahmedabad and Tripura. The company is planning to expand the business with comparative arrangement stores which can provide products maintaining a balance between cost and quality. The company is also looking forward to trade wholesale which will boost the growth of the company. The competitive strengths of the company are: • A range of products• Good brand reputation in Gujarat• 11 distribution stores in Gujarat• Products for lower to upper-class consumers On the financial performance front, Osia has posted turnover/net profits of  Rs. 53.54 cr. / Rs. 0.35 cr. (FY16), Rs. Rs. 95.33  cr. / Rs. 0.88 cr. (FY17), Rs. 142.23 cr. / Rs. 5.35 cr. (FY18).  For the 30.11.18 of FY19, it has earned a net profit of Rs. 4.74 cr. on a turnover of Rs. 145.01 cr. Performance of company improved drastically since FY17 and it's expected to grow at same rate for next couple of years. For last three fiscals, Osia has posted (on a consolidated basis) an average EPS of Rs. 9.33 and an average RoNW of 31.95%. The issue is priced at a P/BV of 4.42 on the basis of its NAV of Rs. 57.00 as on 30.11.18. If we annualise latest earnings and attribute it on fully diluted post issue equity, then asking price is at a P/E of around 21, thus issue appears fully priced and if we take FY18 earnings, then P/E is around 28. Comparison with listed peers is given in above table. On BRLM's front, for Monarch Net-worth Capital Limited this is the 11th SME IPO. From last 10 IPOs, 5 opened below issue price, 3 at par and remaining above issue price. Currently from last 10 IPOs, 7 are trading below issue price and remaining above issue price. Company has shown improvements in results, RoNW is 31.07% and issue looks fully priced with respect to current earnings. It's expected that retail supermarket business will grow at good rate and there are very good opportunities for growth. Performance of BRLM is poor. So we give NEUTRAL rating to this SME IPO.

• 1 Mr. Dhirendra Gautam Chopra
• 2 Mrs. Kavita Dhirendra Chopra