Sai Swami Metals & Alloys Limited

Sai Swami Metals and Alloys Limited is actively involved in the trading and marketing of a comprehensive array of stainless steel products, addressing the diverse needs of the discerning customers. Our product line is specifically designed to encompass a wide range of kitchenware, including Dinner Sets, S.S. Casseroles, S.S. Multi Kadai, S.S. Water Bottles, Stainless Steel Sheets, Stainless Steel Circles, and various types of utensils. We are also engaged in trading of basic raw material like S.S. Patta, S.S. Sheet, S.S. Coil, S.S. Scrap, S.S. Pipe, M.S. Round (Mild Steel Round) and M.S. beam and so on for the various customers. The Company and the two subsidiaries i.e. Bhagat Marketing Private Limited and Dhruvish Metals LLP are specializes in the trading and marketing of stainless steel kitchenware products through the distinguished brand "DOLPHIN". Employing an outsourcing model, the business collaborates with Dhruvish Metals LLP, a subsidiary company of Sai Swami Metals and Alloys Limited, to source complete kitchenware products. Dhruvish Metals manufactures all kitchenware products, including comprehensive packaging, which is then sent to Sai Swami for further sales and distribution. As per financial performance, Sai Swami Metals & Alloys Limited has posted total income / net profits of Rs 7.50 Cr / Rs 0.04 Cr (FY21), Rs 8.84 Cr / Rs 0.52 Cr (FY22), Rs 6.24 Cr / Rs 0.37 Cr (FY23) and Rs 33.33 Cr / Rs 1.79 Cr (upto Q3 FY24). So as per previous financials data, company has shown declining results, but sudden rise in net-profit just before IPO raises doubts. Company has posted an average EPS of Rs 38.28 and average RoNW of 10.48% for last three fiscals. Issue is priced at a P/BV of 1.63 as per NAV of 36.72 as on Post issue. If we attribute latest earnings of FY22, FY23 and annualised FY24 on fully diluted equity post issue, then asking price is at a P/E of around 75.78, 106.42 and 16.59 respectively, which looks fully priced. As per RHP, comparison between listed peers is shown in above table. On BRLM's front, Swastika Investmart Limited is associated with this SME IPO and handled 8 SME IPOs in last 3 year. From last 8 SME IPOs, two opened below issue price and remaining opened above issue price or at par on the day of listing. As of now from last 8 SME IPOs, five are trading below issue price and remaining is trading above issue price. ( As on 29.04.24 ) As per financials, Sai Swami Metals & Alloys Limited has shown declining results, RoNW is 10.48% and P/E is respectively 75.78, 106.42 and 16.59 as per FY22, FY23 and annualised FY24 earnings. So, issue looks fully priced. Company is in business of the trading and marketing of stainless steel kitchenware products through the distinguished brand DOLPHIN, which is highly competitive and fragmented segment. 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.

• 1 Mr. Nipun Anantlal Bhagat