Sai Silks (Kalamandir) Limited started in 2011, they operate in a segment where they interact and interface with the Customers (i.e., businesses) and end Users (i.e., employees) and are among a small number of uniquely positioned players with a diversified offering of fintech products and services, having one of the largest number of issued prepaid cards in India in partnership with certain of the banking partners (which constituted approximately 16.0% of Bharat's total prepaid transaction volume, as of March 31, 2023), a diversified portfolio of SaaS, including tax and payroll software, and a wide touchpoint reach (Source: Frost & Sullivan Report). We are a leading player in spend management, with more than 50 million prepaid cards issued in partnership with banking partners and more than 2.27 million users served, as of March 31, 2023. Company is sector-agnostic, and the network of corporate customers covers the banking and finance, technology, healthcare, manufacturing, FMCG, infrastructure and automobile industries, among others, where they have relationships with brands such as TATA Steel, Persistent Systems, Vitech, Inox, Pitney Bowes, Wockhardt, MAZDA, PCBL (RP – Sanjiv Goenka Group), Hiranandani group, Cotiviti and Greenply Industries. Company is placed at the intersection of the SaaS and fintech ecosystems, and the SaaS platform is designed for: (i) business spend management (including expense management and vendor management); (ii) rewards and incentives management for employees and channel partners; and (iii) gift card management for merchants, which they refer to as customer engagement management system ('CEMS'). Company offers an ecosystem-based approach across SaaS and fintech, with low customer acquisition and retention costs in the business-to-business ('B2B') segment. The approach revolves around cross-selling, up-selling, and offering the products and services in partnership with other players in the operating ecosystems. Through the arrangements with partner banks and fintechs, the Customers are able to offer their employees, channel partners and consumers a suite of SaaS and fintech solutions. They offer an integrated value proposition through the SaaS platform, providing a combination of payment instruments as well as an integrated mobile application that digitises business and employee spends. Application programming interface ('API') integrations on the platforms provided to the Customers offer them enhanced convenience and an efficient user experience through a simplified dashboard. Accordingly, they have partnered with, and have entered into arrangements with, DBS Bank, Fibe (formerly, EarlySalary) and Tata Securities to offer their products and value-added services ('VAS'), including insurance, investment and tax planning, to the Users on the platform. As per financial performance, Sai Silks (Kalamandir) Limited has posted total income / net profits of Rs 679.09 Cr / Rs 5.13 Cr (FY21) and Rs 1,133.01 Cr / Rs 57.68 (FY22) and Rs 1,358.92 Cr / Rs 97.58 Cr (FY23). So as per previous financials data, company has shown good growth. Company has an average EPS of Rs 5.72 and average RoNW of 19.03% for last three fiscals. Issue is priced at a P/BV of 6.72 as per NAV of 33.02 as on 31.03.23. If we attribute latest earnings of FY22 on fully diluted equity post issue, then asking price is at P/E of around 59.02 and as per FY23 earnings P/E is around 34.89, which looks fully priced. As per RHP, peers comparison is shown in above table. On BRLM's front, three lead managers are associated with this IPO, and have handled around 31 IPOs in last three fiscals. Motilal Oswal Investment Advisors Limited : This is 10th IPO from this BRLM. From last 9 IPOs, one opened below issue price and remaining above issue price or at par on the day of listing. As of now, from last 9 IPOs, one is are trading below issue price and remaining above or at par of issue price. (As on 15.09.2023) HDFC Bank Limited : This is 9th IPO from this BRLM. From last 8 IPOs, 2 opened below issue price and remaining above issue price or at par on the day of listing. As of now, from last 8 IPOs, 5 are trading below issue price and remaining above or at par of issue price. (As on 15.09.2023) Nuvama Wealth Management Limited : This is 14th IPO from this BRLM. From last 10 IPOs, 3 opened below issue price and remaining above issue price or at par on the day of listing. As of now, 3 are trading below issue price and remaining above or at par of issue price. (As on 15.09.2023) As per financials, Sai Silks (Kalamandir) Limited has shown good growth, RoNW is 24.56% and P/E is respectively 59.02 and 34.89 as per FY22 and FY23 earnings. So, issue looks fully priced. Company is in business of ethnic apparel and value-fashion products, which is highly competitive and fragmented. Performance of BRLM is average. 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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