SURATWWALA BUSINESS GROUP LIMITED

Suratwwala Business Group Limited, started in 2008, is a real estate development company primarily focusing on development of residential and commercial projects in the Pune district. The business activities comprise of development and sale of residential as well as commercial properties and the maintenance of the properties developed by them. Apart from the development and maintenance business, company also focus on providing the space on rent such as renting for mobile tower, hoardings and banners on building or renting of the unsold space for short durations. The Company has so far completed one commercial and one residential project, both of which are located in the Pune district. The Commercial Project, namely, Suratwwala Mark Plazzo - Phase I, located in Hinjawadi, Pune is built on land area of 4525 sq. mts. and comprises of 9 floors having space for 95 offices, 5 Multipurpose showrooms which can be used as restaurant, shops or showrooms and one roof top restaurant. Company commenced the construction of Suratwwala Mark Plazzo – Phase I in July'15 and successfully completed it in July’16. They are now in process to develop Phase II of the said commercial project. On the financial performance front, for the last three fiscals, Suratwwala has reported turnover/net profits of Rs. 11.20 cr. / Rs. 296 cr. (FY18), Rs. 9.13 cr. / Rs. 0.86 cr. (FY19) and Rs. 10.88 cr. / Rs. 0.32 cr. (FY20). So company has shown inconsistent results and bottom line is declining. For the last three fiscals, SBGL has posted an average EPS of Rs. 1 and an average RoNW of 9.51%. The issue is priced at a P/BV of 1.24 based on its NAVs of Rs. 12.08 post issue. As per FY20 earnings issue is priced at P/E of 80. So as per FY20 earnings issue looks very aggressively priced. Comparison with listed peers is shown in above table. On BRLM's front for Hem Securities Limited, this is the 28th IPO in last three fiscals. Out of last ten listing, 4 opened at issue price and the rest with premiums ranging from 0% to 5% on the day of listings. As of now from last 10 IPOs, two are trading below issue price, and remaining above issue price. ( As on 30.07.2020 ) Company has shown inconsistent results and issue is priced at P/E of around 80 as per FY20 earnings, which is over priced in current scenario. Performance of BRLM is good. So we give AVOID rating to this SME IPO.

• 1 Mr. Jatin Dhansukhlal Suratwala
• 2 Mr. Manoj Dhansukhlal Suratwala