Shri Venkatesh Refineries Limited

Shri Venkatesh Refineries Limited Company is primarily engaged in the business of refining and preservation of Edible oils mainly soybean oil and cottonseed oil. The business process involves purchase of the raw oil, then refining, packaging and selling of the edible oil. At present, the company has refining capacity of almost 36,000 tons. Apart from the refining of edible oil, they are also engaged in the business of trading of edible oil mainly soybean oil, cotton seed oil and palm oil. SVRL is one of the growing companies engaged in the refining of edible oil in Maharashtra region selling the edible oil under the brand name 'Rich Soya'. They focus on creating 'Rich Soya' a leading brand name among the different edible oil brand by serving good quality and healthy edible oil at affordable price. On the financial performance front, SVRL reported turnover/net profits (loss) of Rs. 226.98 cr./ 1.85 Cr. (FY19), Rs 235.51 Cr. / Rs. 2.99 Cr. (FY20), Rs. 336.99 Cr. / 3.5 Cr (FY21). So company has shown good results and continuous growth. For the last three years, company has posted average EPS of Rs. 3.70 and RoNW of 23.38%. The issue is priced at a P/BV of 1.76 based on its NAV of Rs. 22.79 post issue. Company has higher finance coast and if company not able to manage debt properly, then it may create issue in future. As per FY20 earnings and on post issue equity, IPO is valued at P/E of around 20 and for FY21 earnings PE is around 12, which looks fully priced. Comparison between listed Peers is shown in above table, but they are not strictly comparable. On BRLM's front, Hem Securities limited associated with this SME IPO and handled 10 IPOs in last 3 years. From last 10 IPOs, five opened below issue price and remaining above issue price. As of now from 10 IPOs, five are trading below and remaining are trading above issue price or at par. ( As on 22.09.21 )  For SVR Limited are good, RoNW is 26% and P/E is around 12 for FY21 earnings, so issue looks fully priced. Company is working in Edible Oil sector, which is highly competitive with very thin margins, but also has good growth opportunities. Performance of BRLM is poor. So we give NEUTRAL rating to this SME IPO.

• 1 Mr. Dinesh Ganapati Kabre
• 2 Mr. Anil Ganapati Kabre
• 3 Mr. Shantanu Ramesh Kabre
• 4 Mr. Prasad Dinesh Kabre