Owais Metals and Minerals Processing Limited is an efficient and effective manufacturer and processor of various metals and minerals. Uniquely diversified across the broad spectrum of natural resources with main interests in manufacturing and processing metal and minerals. The company is engaged in the manufacturing and processing of the following products. 1. Manganese Oxide (MNO) 2. MC Ferro Manganese 3. Manufacturing of Wood Charcoal 4. Processing of Minerals such as Ferro Alloy, Quartz and Manganese Ore. The products like Manganese Oxide is used in fertilizer industry and is also used by the Manganese Sulphate Plants. Manganese Ore is used in manufacturing of Ferro Manganese, Silico Manganese, Manganese Oxide, Batteries and other Ferro products also it can be directly sellable in the market. MC Ferro Manganese is used in steel and casting industries, as it assists in removing sulphur from steel and improve properties, like durability, machinability and malleability. It can deoxidize molten metal. The Wood Charcoal is used in furnaces of industries which requires high heat for their manufacturing process such as Steel industry. Processed Quartz is being used hotel industry, Ferro Alloys industry, tiles & ceramic industry, glass industry and industry of interiors & furniture. The major products are being supplied to the state of Madhya Pradesh, Maharashtra Punjab, Delhi and Gujrat. The company has recently added new products to its portfolio these products are Wood Charcoal and Processed Quartz. The company has a manufacturing unit for wood charcoal at Rajasthan and Meghnagar. Processing of Quartz has been done through the Meghnagar plant. The factory is situated in Meghnagar which is a Strategic location as it is situated on the border of Gujarat, Madhya Pradesh and Rajasthan. Gujarat, Madhya Pradesh and Rajasthan are the three major consumers of Manganese oxide and MC Ferro Manganese. This location helps them in minimize the transportation cost and labour cost. They try to attain maximised output of the products through the operational excellence, processing capability and state of the art infrastructure. They focus on large scale expansion of product portfolio in India and aims to emerges as a well-known natural resource processing company. For manufacturing and processing of minerals and metals both machine and labour are required. They have a semi-automatic plant and machines available and also, they work in the Tribal area where there is sufficient availability of cheaper labours. The company has sufficient land and factory shed for manufacturing and processing of metals and minerals with other necessary infrastructural facilities such as power, water, labour etc. As per financial performance, Owais Metal and Mineral Processing Limited has posted total income / net profits of Rs 21.09 Cr / Rs 0.24 Cr (FY21), Rs 28.33 Cr / Rs 0.49 Cr (FY22), Rs 39.74 Cr / Rs 5.41 Cr (FY23) and Rs 39.78 Cr / Rs 7.65 Cr (upto Q3 FY24). So as per previous financials data, company has shown good growth. But, sudden increase in net profit, just in before IPO generates doubts. Company has posted an average EPS of Rs - and average RoNW of - for last three fiscals. Issue is priced at a P/BV of 5.37 as per NAV of 16.21 as on 31.12.2023. If we attribute latest earnings of FY22, FY23 and annualised FY24 on fully diluted equity post issue, then asking price is at a P/E of around 325.49, 29.23 and 15.50 respectively, which looks fully priced. As per RHP, comparison between listed peers is shown in above table. On BRLM's front, Gretex Corporate Services Limited is associated with this SME IPO and handled 19 SME IPOs in last 3 year. From last 10 SME IPOs, three opened below issue price and remaining opened above issue price or at par on the day of listing. As of now from last 10 SME IPOs, one is trading below issue price and remaining are trading above issue price. ( As on 21.02.24 ) As per financials, Owais Metal and Mineral Processing Limited has shown zig-zag results, RoNW is (22.22%) and P/E is respectively 325.49, 29.23 and 15.50 as per FY22, FY23 and annualised FY24 earnings. So, issue looks fully priced, but sudden rise in net-profit is very surprsing. Company is manufacturer and processor of various metals and minerals, which is highly competitive and fragmented segment. Performance of BRLM is good. So, we give AVOID rating for this IPO. Readers must consult a qualified financial advisor prior to making any actual investment decisions.
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