Pramara Promotions Limited

As per financial performance Pramara Promotions Limited has posted total income/net profits of Rs 40.96 Cr / Rs 0.33 Cr (FY21) and Rs 49.42 Cr / Rs 1.34 Cr (FY22) and Rs 51.19 Cr / Rs 2.22 Cr (FY23), So company has shown average results and sudden rise in bottom-line before IPO is very surprising. Company has posted an average EPS of Rs 2.45/- and average RoNW of 10.65% for last three fiscals. Issue is priced at a P/BV of 3.55 as per NAV of Rs 17.77/- as on post issue. As per FY22 earnings on fully diluted equity post issue, asking price is at P/E of around 42.32 and as per FY23 earnings P/E is 25.58. Also trade receivables are nearly 31% of FY23 earnings. As per RHP, there are no listed peers. On BRLM's front, Fedex Securities Private Limited is associated with this SME IPO and handled 16 SME IPOs in last 4 years. From last 10 IPOs, two opened below issue price and remaining opened at par or above issue price on the listing day. As of now from last 10 IPOs, 4 are trading below issue price and remaining are trading above issue price. ( As on 31.08.23 ) As per financials, Pramara Promotions Limited has shown average results, RoNW is 13.87% and P/E is respectively 42.32 and 25.58 as per FY22 and FY23 earnings. So issue looks fully priced. Company is in business of ideation, conceptualization, designing, manufacturing and marketing of promotional products and gift items for clients, which is highly fragmented and competitive segment. Also issue expenses are around Rs 2.5 Cr, which is very high for such small SME IPO. Performance of BRLM is average. So we are giving AVOID rating to this SME IPO. Readers must consult a qualified financial advisor prior to making any actual investment decisions.

• 1  Rohit Lamba
• 2 Sheetal Rohit Lamba