Started in 2010, Rithwik Facility Management Services Limited is Chennai, Tamil Nadu based company engaged in the business of integrated facilities & property management and equipment & assets management. In detail, the services including managing the Security of the Building, Common Area Housekeeping, Water supply system management, operation of all equipments of the Building, AMC of Amenities such as Lifts, Generators, Chiller Plants, AHUs, Air Conditioners, etc. Company is also engaged in the business of billing management including raising of maintenance and energy invoices and managing collections. Company get majority of its revenue from this segment. This is a bulk business for the company. Company offers these services to corporate customers and developers in Chennai and Coimbatore. Company utilize latest technologies and process that allows company to reduce operation costs and improve life cycles of equipment and property it manages. Rithwik Facility Management has over 88 employees. Its products / services include:1. Property Management / Facilities Management2. Real Estate and other Asset Management and Maintenance3. Billing and Collection Services On financial performance front, RFMS has posted revenue/net profits of Rs. 21.61 cr. / Rs. 0.45 cr. (FY15), Rs. 23.90 cr. / Rs. 0.34 cr. (FY16) and Rs. 21.49 cr. / Rs. 0.64 cr. (FY17). Thus while its top line has remained almost static, its bottom line has shown surge in last fiscal, that is surprising. For first quarter of the current fiscal, it has reported net profit of Rs. 0.06 cr. on revenue of Rs. 5.52 cr. For last three fiscals it has posted an average EPS of Rs. 3.76 and average RoNW of 29.40 on an equity base of Rs. 0.90 crore as at 31.03.17. Issue is priced at a P/BV of 1.68 on the basis of its NAV of Rs. 29.67 as on 30.06.17 and at a P/BV of 1.43 on the basis of its NAV of Rs. 35.05 post issue. If we annualize latest earnings and attribute it on fully diluted equity post issue, then asking price is at a P/E of around 63 plus against its peer trading at a P/ E of around 33 (as per price on 26.12.17) and if we consider FY17 earnings then P/E is around 24. Post Issue Company’s paid up equity will be up 2.7 times. Issue pricing appears very high compared to its earnings and peers. On merchant banker's front, this is the 5th mandate from its stable in past three years. Out of last four listings one opened at par and the rest at a premium of 1.5% to 20% and closed on the same day just around par levels or at discount. As per financials, top line is almost same since FY14 and bottom line has seen surprise incremental rise except FY17, RoNW is 29.4% for last three fiscals and issue is aggressively priced as per latest earnings. Future of this industry is good, but there is lot of competition also, so we give NEUTRAL rating to this SME IPO.
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