Paragon Fine And Speciality Chemicals Limited

As per financial performance, Paragon Fine And Speciality Chemicals Limited has posted total income/net profits of Rs 84.36 Cr / Rs 4.39 Cr (FY21), Rs 84.57 Cr / Rs 4.49 Cr (FY22), Rs 105.01 Cr / Rs 9.89 Cr (FY23) and Rs 29.00 Cr / Rs 3.62 Cr (Upto Q1 FY24). So company has shown average results, but sudden rise in net-profit just before IPO, is very surprising. Company has posted an average EPS of Rs 4.98/- and average RoNW of 43.39% for last three fiscals. Issue is priced at a P/BV of 2.64 as per NAV of Rs 37.82/- as on post issue. As per FY22, FY23 and annualised FY24 earnings on fully diluted equity post issue, asking price is at P/E of respectively around 43.58, 19.78 and 13.51. As per RHP, comparison between peers is shown in above table. On BRLM's front, Hem Securities Limited is associated with this SME IPO and handled 18 SME IPOs in last 3 years. From last 10 IPO, one opened below issue price and remaining opened at par or above issue price on the listing day. As of now from last 10 IPO, four are trading below issue price and remaining are trading above issue price. ( As on 20.10.23 ) As per financials, Paragon Fine And Speciality Chemicals Limited has shown average results, RoNW is 44.29% and P/E is respectively 43.58, 19.78 and 13.51 as per FY22, FY23 and annualised FY24 earnings. So, issue looks fully priced. Also, sudden rise in net-profit is very surprising. Company is in business of custom synthesis and manufacturing of speciality chemical intermediates, which is highly fragmented and competitive segment. Performance of BRLM is average. So we are giving SUBSCRIBE rating to this SME IPO for listing gains. Readers must consult a qualified financial advisor prior to making any actual investment decisions.

• 1  Dr. Pravinchandra Jasmat Vasolia
• 2  Kishorkumar Panchabhai Patolia
• 3  Vallabh Ratanji Savaliya
• 4  Rutesh Vallabhbhai Savalia
• 5  Shivam Kishorbhai Patolia