Shree OSFM E-Mobility Limited

Shree OSFM E-Mobility Limited is engaged in providing employee transportation services to large MNCs with a presence across major cities in India. They have over 16+ years of experience in catering to the employee transportation needs of companies in IT/ITES, Aviation and other sectors. They operate a largely 'asset light' engagement model. Typical operating parameters are on monthly lease, per kilometer, per passenger trip and package model. Presently, they operate with a 1475+ fleet with a variety of vehicles such as Small cars, Sedans, SUVs, Luxury Cars and Buses of which 217 vehicles are owned by them and rest is leased by them from various vendors. The Company currently have operations in 42 sites spread across Mumbai, Navi Mumbai, Pune, Bengaluru, and Kolkata. The clients include major BPM players such as JP Morgan, Morgan Stanley, Cape Gemini, Accenture etc. Following are the products offering by the Company to the customers but revenue from all these services are accounted as Vehicle Hire Charges in the accounts and accordingly there is single segment for revenue disclosures:  1. Travel Desk Management 2. Roster Management Services 3. Logistics for Corporate Events (MICE)4. Fleet Management. As per financial performance, Shree OSFM E-Mobility Limited has posted total income / net profits of Rs 29.78 Cr / Rs 0.74 Cr (FY21), Rs 30.79 Cr / Rs 1.63 Cr (FY22), Rs 82.61 Cr / Rs 3.09 Cr (FY23) and Rs 55.97 Cr / Rs 2.23 Cr (upto Q2 FY24). So as per previous financials data, company has shown good growth. Company has posted an average EPS of Rs 2.11 and average RoNW of 11.45% for last three fiscals. Issue is priced at a P/BV of 2.06 as per NAV of 31.54 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 57.04, 30.04 and 20.86 respectively, which looks fully priced. As per RHP, comparison between listed peers is shown in above table. On BRLM's front, First Overseas Capital Limited is associated with this SME IPO and handled 20 SME IPOs in last 3 years. From last 10 IPOs, one opened below issue price and remaining opened above issue price or at par on the listing day. As of now from last 10 IPOs, four IPOs are trading below issue price and remaining are trading above issue price. ( As on 09.12.23 ) As per financials, Shree OSFM E-Mobility Limited has shown good growth, RoNW is 15.11% and P/E is respectively 57.04, 30.04 and 20.86 as per FY22, FY23 and annualised FY24 earnings. So, issue looks fully priced. Company is in business of providing employee transportation services to large MNCs with a presence across major cities in India, which is highly competitive and fragmented 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 Ramnath Chandar Patil
• 2 Nitin Bhagirath Shanbhag