Sahaj Fashions Limited

As per financial performance Sahaj Fashions Limited has posted total income/net profits of Rs 99.30 Cr / Rs 0.27 Cr (FY20) and Rs 74.70 Cr / Rs 0.31 Cr (FY21) and Rs 86.98 Cr / Rs 0.42 Cr (FY22) and Rs 91.01 Cr / Rs 2.88 Cr (11M FY23), So company has shown zig-zag results and sudden rise in net-profit just before IPO raises doubts. Company has posted an average EPS of Rs 0.5/- and average RoNW of 2.58% for last three fiscals. Issue is priced at a P/BV of 1.24 as per NAV of Rs 24.26/- as on post issue. As per FY22 earnings on fully diluted equity post issue, asking price is at P/E of around 92.73 and as per annualized FY23 earnings P/E is 12.57. As per RHP, comparison between listed peers is shown in above table, but showing such big companies as peers is very surprising. On BRLM's front, Khambatta Securities Limited is associated with this SME IPO and handled 8 SME IPOs in last 5 years. From last 8 IPOs, two opened below issue price and remaining opened at par or above issue price on the listing day. As of now from last 8 IPOs, two are trading below issue price and remaining are trading above issue price. ( As on 22.08.23 ) As per financials, Sahaj Fashions Limited has shown good results, RoNW is 16.75% and P/E is respectively 92.73 and 12.57 as per FY22 and annualized FY23 earnings. So as per FY22 earnings issue is very aggressively priced which looks fully priced and as per annualized FY23 earnings, its fully priced. Also sudden rise in net-profit just before IPO raises concerns. Company is in business of manufacturing high standard fabric, which is highly fragmented and competitive segment. Performance of BRLM is good. So we are giving AVOID rating to this SME IPO. Readers must consult a qualified financial advisor prior to making any actual investment decisions.

• 1  Mr. Rohit Toshniwal
• 2  Mr. Norat Mal Choudhary
• 3  Ms. Sadhana Toshniwal
• 4  Mrs. Prabha Lakhotia
• 5  Mr. Rakesh Choudhary
• 6  Mr. Mukul Lakhotia
• 7  Mr. Nitin Toshniwal