Rex Sealing And Packing Industries Limited

Rex Sealing and Packing Industries Limited, is a manufacturer and exporter of Sealing packing and Insulation products including Jointing Sheets, Fabric Expansion Joints, Gland packing & Ropes, High Temperature resistant textiles, Ceramic Fiber Product etc. The company business was initiated in the Year 1963 by their founding Promoter, Mr. Manjunath Nayak under the name “M/s Rex Industries” for manufacturing of Gland Packing. Initially they started as a manufacturing business at a very small scale. Thereon, in the Year 1997, the business was further expanded by second generation of the family, Mr. Niranjan Nayak and later joined by Mr. Naresh Nayak in the Year 2001. Further, with a vision to corporatize business and cater to the organized players in the markets, the Company was incorporated in the Year 2005. The Company's diversified products include four major categories:1. Compressed Fibre Jointing Sheets / Gaskets2. Gland Packing 3. Fabric Expansion Joints4. Technical and Heat Resistance Textiles5. Ceramic Fiber Product The company revenue from operations in FY22 is Rs 2091.72 lakhs and Profit After Tax in FY22 is Rs 5.78 lakhs. As of July 31, 2022, they have 29 employees on payroll. As per financial performance, Rex Sealing And Packing Industries Limited has posted total income/net profits of Rs 20.17 Cr / Rs 1.33 Cr (FY20), Rs 17.26 Cr / Rs 0.37 Cr (FY21), Rs 21.16 Cr / Rs 0.55 Cr (FY22) and Rs 5.72 Cr / Rs 0.38 Cr (upto Q1 FY23). So company has shown average result. Company has posted an average EPS of Rs 3.05 and average RoNW of 7.49% for last three fiscals. Issue is priced at a P/B of 2.37 as per NAV of Rs 57.07 post issue. As per FY22 earnings on fully diluted equity post issue, asking price is at P/E of around 57.83 and as per annualised FY23 earnings P/E is 19.93. As per RHP, there is no listed peer. On BRLM's front, Aryaman Financial Services Limited associated with this SME IPO and handled 15 SME IPOs in last three years. From last 10 IPO all are above issue price or at par. As of now from last 10 IPOs, five are trading below and remaining are trading above issue price or at par. ( As on 28.12.22 ) As per financials Rex Sealing And Packing Industries Limited, has shown average results, RoNW is 6.63% and P/E is respectively 57.87 and 19.93 as per FY22 and annualised FY23 earnings, which looks aggressively priced. Company has shown super earnings in Q1 FY23, but its doubtful if company can manage same margins in future and the business segment is highly competitive and fragmented. Performance of BRLM is average post listing. So we are giving AVOID rating to this IPO.

• 1 Naresh Nayak
• 2 Niranjan Nayak
• 3 Manjunath Nayak