Quality RO Industries Limited

Started in September 2021, Quality RO Industries Limited has acquired the entire running business with the assets and liabilities of M/s Quality RO Products. The company is engaged in the business of manufacturing, marketing and supplying components for water purifiers and softener equipment. These water purifiers parts have been designed to make a proper fitting for RO Plants and Systems of different varieties, as they produce strictly according to industry standards. They are engaged in the business of supplying of various water treatment products as well as logistics services. As a supplier, they procure polypropylene raw materials and manufacture various types of softener equipment such as filter parts, premium filter cartridges, taps, membrane housing and also engage in contract manufacturing for the water treatment industry. The company also make sales through online platforms. In addition, they are also engage in providing logistics services on a contractual basis to a few local infrastructure companies. The Company is engaged in following area:-1. Manufacturing of water softener equipment2. Contract Manufacturing3. Trading of RO equipment spares and associated product3. Contractual Logistics to local infrastructure and manufacturing companies As per financial performance, Quality RO Industries Limited has posted total income/net profits of Rs 0.167 Cr / Rs 0.197 Cr (2M FY22). So Very limited financial data is available as company is formed recently. Issue is priced at a P/B of 2.64 as per NAV of Rs 19.29 post issue. As Per annualised FY21 earnings on fully diluted equity post issue, asking price is at P/E of around 117 As per RHP there are no listed peers.     On BRLM's front, Shreni Shares Private Limited associated with this SME IPO and handled 7 IPOs in last 3 years. From last 7 IPOs, two opened below issue price and remaining above issue price or at par. As of now from last 7 IPOs, one are trading below and remaining is trading above issue price or at par. ( As on 24.01.22 ) As per financials, QRIL has shown average financials, and P/E is 117 annualised FY22 earnings, which looks aggressively priced. The sector has shown good growth, but competition is also high. Performance of BRLM is good. So we give AVOID rating to this IPO.

• 1 Mr. Vivek Dholiya