Refractory Shapes Limited is primarily engaged in the manufacturing of different types of Bricks, Castables, High Alumina Catalyst and Ceramic Balls which includes Pre Cast & Pre Fired Blocks, Burner Blocks, Special shaped Refractory bricks, Dense & Insulating Castables & Mortars. Company was established in the year 1973 as a Proprietary Firm named as M/s. Refractory Shapes. Refractory Shapes Limited started developing and supplying products to Refineries and Steel Industries since its inception in 1973. In the year 2007 and 2011, the Company had for the first time become an approved vendor with Engineer India Limited and also got enlisted with EIL for ' High Alumina Refractory Bricks', The Company is the Original Equipment Manufacturer in many projects executed by EIL, which increased the opportunities of the Company in many green field projects, this EIL enlistment is re-validated every 3 years. The tailored made products shaped by the Company finds its application in a diverse range of Industries, including Steel, Refineries, Fertilizers, Petrochemicals, Glass, Cement etc. The company's refractories are engineered to endure the harsh conditions of these industries, contributing to enhanced operational efficiency and extended equipment life. The tailored made finished goods provide diversity in the products being manufactured by the Company wherein modern manufacturing equipment are installed for scaling the manufacturing. In addition to the manufacturing activity being carried out by the Company, Refractory Shapes is often involved in receiving orders for those items from clients which are not a part of Company's operations in manufacturing activities. These items include Metallic Anchors which are used as support for installing refractory castables for which Raw Materials such as tabular alumina, low alumina bricks and insulation bricks, etc are required, For such orders, the company procures these items from their approved vendors and sells to the clients, hence, the Company is also involved in trading of the aforesaid products. The Company has a fully equipped manufacturing plants situated at Pimpri Industrial Area, Pune, Maharashtra and Wankaner, Morbi district in Gujarat with Morden equipment and testing laboratory which is EIL enlisted for Refractory Castables & Bricks with additional unit to supply EIL Greenfield projects with total area of 34,788 sq. ft. in Pune and 1,74,246 sq. ft. in Gujarat. Currently, the Company has also purchased additional 4 acres of land admeasuring to 1,74,240 sq. ft. near to its existing Wankaner, Gujarat unit. As per financial performance, Refractory Shapes Limited has posted total income / net profits of Rs 21.79 Cr / Rs 1.56 Cr (FY21), Rs 26.21 Cr / Rs 2.87 Cr (FY22), Rs 38.72 Cr / Rs 1.91 Cr (FY23) and Rs 29.99 Cr / Rs 3.07 Cr (upto 31.12.23 FY24). So as per previous financials data, company has shown good growth. Issue is priced at a P/BV of 1.87 as per NAV of 16.58 as on Post issue. If we attribute latest earnings of FY22, FY23 and annualised FY24 on fully diluted equity post issue, then asking price is at a P/E of around 23.54, 35.25 and 16.46 respectively, which looks fairly priced. As per RHP, comparison between listed peers is shown in above table. On BRLM's front, Shreni Shares Limited is associated with this SME IPO and handled 24 SME IPOs in last 3 year. From last 10 SME IPOs, all opened above issue price on the day of listing. As of now from last 10 SME IPOs, one is trading below issue price and remaining are trading above issue price. ( As on 01.05.24 ) As per financials, Refractory Shapes Limited has shown good growth, RoNW is 11.49% and P/E is respectively 23.54, 35.25 and 16.46 as per FY22, FY23 and annualised FY24 earnings. So, issue looks fully priced. Company is in business of manufacturing of different types of Bricks, Castables, High Alumina Catalyst and Ceramic Balls, which is highly competitive and fragmented segment. Performance of BRLM is good. So, we give NEUTRAL rating for this IPO. Readers must consult a qualified financial advisor prior to making any actual investment decisions.
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