Started in 2011, Suumaya Lifestyle Limited, Mumbai based company, is engaged in the manufacturing of designer wear of women like kurtis, ethnic tops, salwar suits etc. and it also deals in designer women apparels. Company is also in trading business of cotton and other fabrics used in women wear. Initially Company was engaged into real-estate business and was listed into ITP segment. On April 16, 2017, Suumaya Fashions was acquired by Richway International Trade Limited, through Business Transfer Agreement entered between Suumaya Fashions a partnership firm of Mr. Ushik Gala and Ms. IshitaGala, as part of Promoter Group, and Suumaya Lifestyle Limited (Formerly known as Richway InternationalTrade Limited). Pursuant to the business transfer agreement, Company acquired assets and liabilities of Suumaya Fashions and all the manufacturing operations and trading activities was consolidated in Company. SLL is involved in business of manufacturing and trading of dress materials, suits, sarees, kurtis and other allied goods made from cotton, denim, silk, synthetics, jute, velvet, woollen, leather, rexin, or with any combination thereof and to participate in local, national and international trade fairs, sales exhibitions, seminars, fashion shows or any other sales promotion scheme. Company was only in trading business till 2017 and post- acquisition of partnership firm Company has started manufacturing activity. SLL markets products under the brand name 'ekka', 'ira' and 'tag 9'. Company is both in retail and wholesale business where they provide their designs and satisfy customers. Company has two retail stores in Mumbai and one manufacturing facility with current capacity of 1,87,500 pcs and intended to expand it to 7,20,000 pcs till FY 19-20. The company has 18 employees on its payroll. As per financial performance, SLL has posted total revenue/net profits of Rs. 15.47 cr. / Rs. 0.12 cr. (FY14), Rs. 37.16 cr. / Rs. 0.05 cr. (FY15), Rs. 90.53 cr. / Rs. 0.32 cr. (FY16) and Rs. 212.06 cr. / Rs. 0.45 cr. (FY17). For upto Q3 of the FY18 it has earned net profit of Rs. 1.72 cr. on a turnover of Rs. 242.29 cr. Thus year after year it has posted improved performance, but sharp increase in the bottom-line in FY18 is very surprising. Upto Q3 of FY18, from its total revenue, 94.12% consists of trading of fabrics and 5.88% from designer woman apparels. For last three fiscals it has posted an average EPS of Rs. 0.15 and an average RoNW of 1.46%. The issue is priced at a P/BV of 1.56 on the basis of post issue NAV of Rs. 11.57. If we annualise latest earnings and attribute it on fully diluted equity post issue then asking price is at a P/E of around 19. As per offer documents, industry average P/E is 35.8. As per latest earnings, issue looks fully priced. On BRLM's front, for Gretex Corporate Services Pvt Ltd, this is the 11th IPO since last three fiscals and out of recent 10 listings, 3 listed below issue price, 3 at par and remaining with 1% to 10% premium on the day of listing. As of now from last 10 IPOs, only 3 are trading above issue price and remaining below issue price. So track record of BRLM is very poor. As per financials, company's performance is good, RoNW is 1.46% and issue is fully priced as per latest earnings. Track record of BRLM is poor and this industry has very high competition from domestic players, but also has good scope for growth. So we give AVOID rating to this SME IPO as per current market situation.
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