Patron Exim Limited

Patron Exim Limited is engaged in the trading and distribution of wide range of pharmaceutical raw material which is also known as APIs (Active Pharmaceutical Ingredients), industrial chemical, excipient and solvents. Presently company's product portfolio comprises of around 150 AIPs, Excipient, Pharma Chemical & Intermediates. They are also in the trading of variety of chemicals, such as, Petrochemicals, Dyes & Pigment Chemicals, Paints & Speciality Chemical, Agro Chemicals, Oil & Refinery Chemicals, Foam & Adhesive, Plywood & Laminates Chemical. The range of Chemicals also includes food industry & water treatment chemicals, resins & plastics chemicals, polymers and additives etc. As on December 22, 2022, we have the total strength of permanent employees 09 in various departments.  As per financial performance, Patron Exim Limited has posted total income/net profits of Rs 25.16 Cr / Rs 0.02 Cr (FY20), Rs 20.53 Cr / Rs 0.07 Cr (FY21), Rs 5.01 Cr / Rs 0.83 Cr (FY22) and Rs 10.54 Cr / Rs 1.45 Cr (upto 8M FY23). So company has shown zig-zag results, but shown very high net profits in last 20 months. Company has posted an average EPS of Rs 0.91 and average RoNW of 9.12% for last three fiscals. Issue is priced at a P/B of 1.63 as per NAV of Rs 16.54 post issue. As per FY22 earnings on fully diluted equity post issue, asking price is at P/E of around 75 and as per annualised FY23 earnings P/E is 29. As per RHP, comparison between listed peers are shown in above table. On BRLM's front, Interactive Financial Services Limited associated with this SME IPO and handled 5 SME IPOs in last 2 years. From last 5 SME IPOs, 2 opened below issue price and remaining opened above issue price or at par on the listing day. As of now from last 5 IPOs, four are trading below and remaining are trading above issue price or at par. ( As on 20.02.2023 ) As per financials Patron Exim Limited has shown zig-zag results, RoNW is 16.15% and P/E is respectively 75 and 29 as per FY22 and annualised FY23 earnings, which looks very aggressively priced. Company has shown exceptional results in IPO year and it may be difficult to maintain same margins in future. Company is in business of trading of pharmaceutical raw material, which is highly competitive and fragmented. Performance of BRLM is poor. So we are giving AVOID rating to this IPO.

• 1   Mr. Narendra kumar Gangaramdas Patel                   
• 2   Mrs. Sushila bahen Narendrakumar Patel