Started in 2002, ShreeOswal Seeds and Chemicals Limited is an ISO 22000:2005 certified company, based in Neemuch - Madhya Pradesh, engaged in the business of production, processing, and sale of different kind of agricultural seeds like wheat, maize, soybean, mustard, etc. The Company processes various kinds of seeds at its processing unit located at Neemuch, Madhya Pradesh. It processes 5 varieties of wheat seeds, 5 varieties of soya bean seeds, 3 varieties of Mustard seeds, 1 variety of black gram, 1 variety of corn seeds and 1 Variety of isabgol/psyllium. The products are marketed under the brand name of OSWAL. The majority of the sales are through its own Brand which contributed 66.00 %, 85.32 %, and 95.25 % respectively to the total sales for the financial year ended March 31, 2015, 2016, and 2017 respectively. ShreeOswal has a diversified customer base covering states like Bihar, Jharkhand, Maharashtra, Madhya Pradesh, Rajasthan, Uttar Pradesh, Delhi, and Punjab. The Company operates through a network of distributors and dealers and has an association with more than 114 dealers and distributors. As of now company has total production capacity of 14,000 Metric Ton and operating at 94.44% capacity utilisation. Company is planning to expand production capacity to 24,000 Metric Ton and capacity utilisation of around 90% for next financial year. Company has total 20 employees on its payroll as on 31.12.17. SOSCL's subsidiary Company ShreeOswal Psyllium Export India Limited, is engaged in the business of manufacturing, processing and sale of psyllium husk and psyllium husk powder. The Subsidiary also produces by products of psyllium such as cattle feed. As per financial performance, SOSCL has posted total revenue/net profits of Rs. 22.54 cr. / Rs. 0.13 cr. (FY13), Rs. 33.50 cr. / Rs. 0.18 cr. (FY14), Rs. 58.60 cr. / Rs. 0.31 cr. (FY15), Rs. 38.87 cr. / Rs. 0.32 cr. (FY16), Rs. 43.00 cr. / Rs. 1.02 cr. (FY17) and Rs. 78.19 cr. / Rs. 2.29 cr. (FY18). So company's bottom-line has shown sudden jump in FY17 and FY18. For last three fiscals it has posted an average EPS of Rs. 1.97 and an average RoNW of 14.66%. The issue is priced at a P/BV of 2.44 on the basis of NAV as on 31.03.18 of Rs. 10.64. If we annualise latest earnings and attribute it on fully diluted equity post issue then asking price is at a P/E of around 17.28 and industry average is 30. As per offer documents, it has shown Kaveri Seed Company Limited, Mangalam Seeds Limited and Monsanto India Limited as its listed peers and they are trading at P/E of 16.32, 31.56 and 29.72 respectively. As per latest earnings its reasonably priced. On BRLM's front, for Pantomath Capital Advisors Private Limited, this is the 76th IPO and from last 10 IPOs, 2 listed at par and remaining with 2% to 20% premium on the day of listing. As of now, from recent 10 IPOs, 6 are trading below issue price and remaining above issue price. As per financials, company's performance is good, but there is sudden jump in bottom line, RoNW is 14.66% and issue is reasonably priced as per latest earnings. Performance of BRLM in recent past is poor and most IPOs which listed above issue price are trading below issue price. So we give NEUTRAL rating to this SME IPO as per current market situation.
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