Party Cruisers Limited

Party Cruisers Limited came(PCL) into existence in 1994. Since incorporation, Company specializes in Wedding Management and Events Management Business wherein they  offer all of the clients a complete variety of wedding and event facilities. The Wedding Management Services range from pre-wedding, during wedding and post wedding events like in-house designing, designation wedding event décor etc. The Event Services range from planning & marketing to production and décor etc. As a Wedding and Events Management, the company work on the initial conception (pre-event publicity, venue research & booking, transport), to turnkey production (set-up, on-site management, staffing, stage designing, entertainment), to post-event support (final material distribution, delegate attendance assessment, post-event report) . As per company's management, 75% of wedding management services contribute towards the company's revenue and the balance is contributed by event management services. The company offer professional wedding services through company's 2 registered brands - 'Vivaah' and 'Vows-Away and Beyond' and through Franchisee. The company offer event management services through "Live space" and "Event Factory". On the financial performance front, Party Cruisers Limited has reported turnover/net profits (loss) of Rs. 15.35 cr. / Rs. 1.47 cr. (FY18) , Rs. 18.88 cr. / Rs. 1.93 cr. (FY19) and Rs. 15.88 cr. / Rs. 1.00 cr. (FY20) . For upto H1 of FY21, company has posted 1.71 Cr total income and 0.22 Cr net profit. Sudden fall in revenue in current half year of FY21 is related to current pandemic situation. For the last three years, company has posted average EPS of Rs. 52.09 and RoNW of 17.63%. The issue is priced at a P/BV of 1.66 based on its NAVs of Rs. 30.76 post issue. As per FY20 earnings, on fully diluted equity post issue, IPO is priced at P/E of around 29. If we annualise latest earnings of FY21 on fully diluted equity, than P/E is around 62. So issue looks fully priced. On BRLM's front First Capital Overseas  Limited has handled 7 IPOs in last three fiscals. Out of last 7 listing, all 6 are opened above issue price and 1is opened below issue price on the day of listings. As of now from last 7 IPOs, 5 are trading below issue price and remaining above issue price. ( As on 20.02.2021 ) For Party Cruisiers Limited, company has shown average financial results, RoNW is 10.81% and P/E is 29, for FY20, so issue looks fully priced. As the current situation of pandemic is easing, but still there are Government restrictions for Wedding and other events, also what will be effect of pandemic on life-style post pandemic will have big impact on this Industry. This service industry of event management has very high competition. Performance of BRLM is poor. So we give AVOID rating to this SME IPO.

• 1 MR. ZUZER HATIM LUCKNOWALA
• 2 MRS. RACHANA ZUZER LUCKNOWALAINITIAL