RBM Infracon Limited

RBM Infracon Limited started in 2013, is engaged in the business of engineering, execution, testing, commissioning operation and maintenance, particularly in the field of mechanical and rotary equipment for Oil & Gas Refineries, Gas Cracker Plants, Coal/Gas/WHR based Power Plants, Petrochemical, Chemicals, Cement, Fertilizers. The company is Class - I certified Boiler Repairer / Erector and System / Feed Line fabricator / Erector service provider under Indian Boiler Regulations - 1950. The Company provides following services in different plant like crude ( CDU-VDU), DHDS, FCCU, NHT-CCR, HMU-I & II, VGO –DHDT-ISOM, CPP ( Boiler, Piping HT job with IBR coordination ), DCU( Coker) Utility, Off site, RTF (Pit area) dispatch, Rail and Jetty with around 650 Manpower and also involve in ARC maintenance job in RIL-Jamnagar and YARA-Babrala. They have executed around 14 Turnaround Shutdowns Job including Mega/Mini Shutdowns in Reliance Industries Limited, Nayara Energy Limited (Formerly Known as Essar Oil Limited) and Yara Fertilisers India Limited & HMEL-Bathinda. Company has work order book of approximately Rs 121 Crores (Including GST) as on September 06, 2022. Recently the company has received letter of Intent from Malco Energy Limited (Part of Vedanta Group) worth Rs 200 Crores for Operations and Maintenance of Metcoke Manufacturing Plant and contract Tenure is for 3 years. As on August 31, 2022, they have the total strength of 2049 Employees. As per financial performance, RBM Infracon has posted total income/net profits of Rs 35.17 Cr / Rs (0.13) Cr (FY20), Rs 38.89 / Cr (Rs 1.13) Cr (FY21), Rs 47.63 Cr / Rs 1.91 Cr (FY22) and Rs 10.27 Cr / Rs 0.65 Cr (Q1FY23). So company has shown growth, and company moved to profit. Company has posted an average EPS of Rs 0.79 and average RoNW of 4.64% for last three fiscals. Issue is priced at a P/B of 1.95 as per NAV of Rs 18.43 post issue. But trade receivables are around 32% of total sales in FY22, which is not good. As per FY22 earnings on fully diluted equity post issue, asking price is at P/E of around 15.91 and as per annualised FY23 earnings P/E is 11.62. As per RHP, there is no listed peers. On BRLM's front, Shreni Private Limited associated with this SME IPO and handled 5 SME IPOs in last 3 years. From last 5 IPO all opened above issue price or at par. As of now from last  5 IPOs, two are trading below and remaining are trading above issue price or at par. ( As on 17.12.22 ) As per financials, RBM Infracon has shown growth, RoNW is 29.22% and P/E is respectively 15.91 and 11.62 as per FY22 and annualised FY23 earnings, which looks fully priced. Company was making losses and just before IPO, company has shown good profits which generates doubts. Company has order book of around Rs 121/- Cr as on September 22 and also letter of intent from Vedanta group company. Performance of BRLM is average post listing. So we are giving NEUTRAL rating to this SME IPO.

• 1 Mr. Jay Bajrang Mani.