Retina Paints Limited

Indong Tea Company Limited incorporated in the year 1990, owns and operates a Tea Garden under Government lease and is engaged in Tea Plantation & Manufacturing of CTC Tea at Indong Tea Estate situated at Jalpaiguri District of West Bengal. The Indong Tea Estate is spread over an area of 740.38 Hectares which comprises of Tea Plantation, Tea Factory, Withering Trough House, Officer's Bunglows, Staff Quarters, Labour Quarters, Pump House, General Stores, Dairy Farm etc. Company has employed approximately 1346 employees at various levels of the Organization including temporary labour.   As per financial performance, Retina Paints Limited Limited has posted total income/net profits of Rs 6.81 Cr / Rs 0.046 Cr (FY20) Rs 6.85 Cr / Rs 0.045 Cr (FY21), Rs 6.47 Cr / Rs 0.113 Cr (FY22) and Rs 5.33 Cr / Rs 0.399 Cr (upto 8M FY23). So company has shown static results, but increase in net-profit just before IPO very surprising. Company has posted an average EPS of Rs 0.69 and average RoNW of 5.03% for last three fiscals. Issue is priced at a P/B of 1.86 as per NAV of Rs 16.15 post issue. As per FY22 earnings on fully diluted equity post issue, asking price is at P/E of around 370.09 and as per annualised FY23 earnings P/E is 69.87 As per RHP, comparison between listed peers are shown in above table. On BRLM's front, Gretex Corporate Services Limited associated with this SME IPO and handled 15 SME IPOs in last 3 years. From last 10 SME IPOs, 9 SME IPOs opened above issue price or at per and remaining below issue price on the listing day. As of now from last 10 IPOs, 5 are trading below and remaining are trading above issue price or at par. ( As on 11.04.2023 ) As per financials, Retina Paints Limited has shown almost static results, RoNW is 5.16% and P/E is respectively 370.09 and 69.87 as per FY22 and annualised FY23 earnings, which looks very expensively priced. Also sudden rise in net profit just before IPO also generates doubt. Company is in paint business, which is very competitive with many big players. Performance of BRLM is average post listing. So we are giving AVOID rating to this IPO.

• 1 Mr. Rakesh Dommati
• 2 Ms. Rajitha Koyyada