Proventus Agrocom Limited

Proventus Agrocom Limited is an integrated health food brand with the presence in entire range of dry fruits, nuts, seeds and berries and healthy snacking products across the value chain. In 2017, company has launched the brand 'ProV' and today they have 100+ SKUs offering through the subsidiaries, ProV Foods and Proventus Retail, that include the premium quality of dry fruits including almonds, cashews, walnuts, raisins and pistachios, sourced from the orchards across India and abroad.  ProV has six brand segments, namely 'ProV Select' which is the economical at home daily consumption category, 'ProV Premium' which is the flagship high quality category, 'ProV Regal' which is the luxury jumbo sized produce category, 'ProV Flavours' which is augmented with flavours, 'ProV Fusion' which is a line of exquisite trail mixes, and the most recently launched 'ProV Minis' for pick-and-go needs and replacement to unhealthy junk snacks at a price point of just INR 30 each pack.  As on March 31, 2023, the Company & its subsidiaries has employed 39 permanent full-time employees including managerial personnel in various departments. As per financial performance, Proventus Agrocom Limited has posted total income/net profits of Rs 900.89 Cr / Rs (21.9) Cr (FY20), Rs 301.74 Cr / Rs 1.88 Cr (FY21), Rs 404.35 Cr / Rs 1.14 Cr (FY22) and Rs 319.10 Cr / Rs 1.9 Cr (upto 9M FY23), So company has shown zig-zag results. Company has posted an average EPS of Rs (8.91)/- and average RoNW of 2.43% for last three fiscals. Issue is priced at a P/BV of 2.33 as per NAV of Rs 331.05/- post issue. As per FY22 earnings on fully diluted equity post issue, asking price is at P/E of around 231 and as per annualised FY23 earnings P/E is 104. As per RHP, comparison between listed peers is shown in above table. On BRLM's front, Sundae Capital Advisors Private Limited is associated with this SME IPO and has not handled any SME IPOs in past. ( As on 18.05.2023) As Per financials, Proventus Agrocom Limited has shown zig-zag results, RoNW is 1.91% and P/E is respectively 231 and 104 as per FY22 and annualised FY23 earnings, which looks very aggressively priced. Company is a health food brand, but also there is very high competition for local vendors. So we are giving AVOID rating to this SME IPO, but SME IPOs are very risky in nature due to limited clients.

• 1 Mr. Durga Prasad Jhawar
• 2 Mr. Deepak Kumar Agrawal
• 3 Mr. Shalin Sanjiv Khanna
• 4 Shree JMD Investment Advisors LLP