Saroja Pharma Industries India Limited

As per financial performance Saroja Pharma Industries India Limited has posted total income/net profits of Rs 36.74 Cr / Rs 0.73 Cr (FY21) and Rs 55.95 Cr / Rs 1.14 Cr (FY22) and Rs 50.35 Cr / Rs 1.06 Cr (FY23), So company has shown average results. Company has posted an average EPS of Rs 3.57/- and average RoNW of 20.85% for last three fiscals. Issue is priced at a P/BV of 2.38 as per NAV of Rs 35.32/- as on post issue. As per FY22 earnings on fully diluted equity post issue, asking price is at P/E of around 29.62 and as per FY23 earnings P/E is 31.86. 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, Swastika Investmart Ltd is associated with this SME IPO and handled 7 SME IPOs in last 3 years. From last 6 IPOs, one is opened below issue price and remaining opened at par or above issue price on the listing day. As of now from last 6 IPOs, 4 are trading below issue price and remaining are trading above issue price. ( As on 31.08.23 ) As per financials, Saroja Pharma Industries India Limited has shown average results, RoNW is 20.85% and P/E is respectively 29.62 and 31.86 as per FY22 and FY23 earnings. So issue looks aggressively priced. Company is in business of trading, exporting and supplying Specialty Chemicals & API, which is highly fragmented and competitive segment. Performance of BRLM is poor post listing. 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. Biju Gopinathan Nair
• 2 Mr. Manish Dasharath Kamble