Samor Reality Limited

Incorporated in the year 2014 as a partnership firm, Samor Reality Limited belongs to Ahmedabad based Samor Group. They are an integrated construction and real estate development company, focused primarily on construction and development of residential and commercial projects, in and around Ahmedabad, Gujarat.  Company is also engaged in the activity of trading of building and construction materials specifically TMT Bars, HR Sheets of different sizes. Further the total of 100% of revenue for the year ended on March 31, 2021 is from trading activity. On the financial performance front, Samor Reality Limited reported turnover/net profits (loss) of Rs. 8.32 Cr. / 0.11 Cr. (FY19), Rs. 1.07 cr./ (0.08) Cr. (FY20), Rs.9.64 Cr / 0.10 Cr. (FY21). So company has shown zig-zag results. For the last three years, company has posted average EPS of Rs. (0.35) and RoNW of 7.71%. The issue is priced at a P/BV of 2.39 based on its NAV of Rs. 25.96 post issue. As per FY21 earnings and on post issue equity, IPO is valued at P/E of around 255, which looks very aggressively priced. Comparison between listed peers is shown in above table, but it can't be compared apple to apple basis. On BRLM's front, Beeline Broking limited associated with this SME IPO and handled 9 IPOs in last 3 years. From last 9 IPOs, three opened below issue price and remaining above issue price. As of now from 9 IPOs, six are trading below and remaining are trading above issue price or at par. (As on 28.09.21) For Samor Reality limited, financials are zigzag, RoNW is 7.71% and P/E is around 255 for FY21 earnings. So issue looks very aggressively priced. Also real estate sector is highly competitive. Performance of BRLM is poor. So we give AVOID rating to this SME IPO.

• 1  Mr. BirjuKumar Ajitbhai Shah
• 2 Mrs. Jagrutiben Birjubhai Shah