SAR Televenture Limited FPO

SAR Televenture Limited is currently a telecommunication infrastructure provider, engaged primarily in the business of installing and commissioning telecom towers in Bharat. As on May 31, 2024, they have installed an aggregate 413 number of towers on lease over various areas in West Bengal, Bihar, Uttar Pradesh, Chandigarh, Odisha, Jharkhand, Himachal Pradesh, Punjab, and Andaman & Nicobar Islands. The Company is ISO - 9001:2015, ISO 140001: 2015 and ISO 45001: 2018 certified Company. The Company is registered as Infrastructure Provider Category I (IP-I) with Department of Telecommunication (DOT) which permits them to lease out build sites i.e. GBT/RTT/Pole sites and Out Door Small Cell (ODSC) and establish and maintain assets such as Dark Fibers,Right of Way, Duct Space and Tower for the purpose to grant on lease or rent or sale basis to the telecom service provider companies. They also provide support services such as includes project management for laying of the duct and optic fibre cables, construction of basic transmission and telecom utilities, dark fiber leasing, optical fiber network construction, maintenance of duct and optic fibre and optical fibre project turnkey services to various, Telecom Network Operators & Broad Band Service Operators and ISPs. As on May 31, 2024, company has installed an aggregate 413 number of towers on lease over various areas in West Bengal, Bihar, Uttar Pradesh, Chandigarh, Odisha, Jharkhand, Himachal Pradesh, Punjab, and Andaman & Nicobar Islands. They have entered in the business vertical of installing Fiber to the Home (FTTH), which is a broadband internet connection technology that uses optical fiber to deliver high speed broadband internet directly to households. As per financial performance, SAR Televenture Limited has posted total income / net profits of Rs 4.75 Cr / Rs 0.04 Cr (FY22), Rs 32.52 Cr / Rs 3.94 Cr (FY23), Rs 124.17 Cr / Rs 15.66 Cr (FY24). So as per previous financials data, company has shown good growth, but net cash-flow of the company is negative. Company has posted an average EPS of Rs 67.82 and average RoNW of 13.98% for last three fiscals. Issue is priced at a P/BV of 4.39 as per NAV of 47.87 as on 31.03.24. If we attribute latest earnings of FY22, FY23 and FY24 on fully diluted equity post issue, then asking price is at a P/E of around 12533.69, 118.14 and 29.69 respectively, which looks fully priced. As per RHP, comparison between listed peers is shown in above table. On BRLM's front, Pantomath Capital Advisors Private Limited is associated with this SME IPO and handled 8 SME IPOs in last 3 years. From last 8 SME IPOs, all opened Above issue price or at par on the day of listing. As of now from last 8 SME IPOs, all are trading above issue price. ( As on 11.07.24 ) As per financials, SAR Televenture Limited has shown good growth, RoNW is 21.81% and P/E is respectively 12533.69, 118.14 and 29.69 as per FY22, FY23 and FY24 earnings. So, issue looks fully priced, but negative cash-flow is a concern. Company is engaged in the business of installing and commissioning telecom towers in Bharat, which is highly fragmented and competitive business segment. Performance of BRLM is good. So, we give NEUTRAL rating for this IPO. Readers must consult a qualified financial advisor prior to making any actual investment decisions.

• 1  M.G Metalloy Private Limited