Suyog Gurbaxani Funicular Ropeways Limited

Incorporated in 2010, Suyog Gurbaxani Funicular Ropeways Limited is an infrastructure development & constructions company engaged in building & operating the Funicular Ropeways Systems. The company currently employs a Build, Operate, and Transfer Mode (BOT) for its business operations. They have completed the construction of a Funicular Ropeway System project (also known as Incline Ropeways) at Saptashrungi Gad Temple situated at Vani, Nashik, Maharashtra. The project consists of a Funicular Ropeway System consisting of 2 Air Conditioner funicular vehicles/coaches which can carry 60 passengers at a time. A shopping mall with 50 shops, along with a parking lot with a capacity of more than 150 vehicles including four-wheelers and two-wheelers has also been constructed. In this project, the company also constructed a hotel with 28 guest rooms & dormitories, a multi-cuisine restaurant, and a coffee shop. The project spreads over an area of approximately 10 acres. The possession of this project is available with the company till 2034, after which it will be handed over to the Government of Maharashtra. As on March 31, 2021, the Company employs 205 people, including Key Managerial Personnel, Executive Directors, employees in head office and employees at the Saptashrungi Gad temple project. The also hire casual and temporary contract labour from time to time. On the financial performance front, SGFRL reported turnover/net profits (loss) of Rs. 7.90Cr./ (3.48) Cr. (FY19), Rs. 13.19 Cr / (1.88) Cr. (FY20), Rs. 4.48 Cr. / 7.93 Cr. (FY21) and Rs. 0.0011 Cr/ (2.32) Cr. (Q1FY22). So company has shown declining results and consistent losses. For the last 3 years, company has posted average EPS of Rs. (2.62) and RoNW of (64.45)%. The issue is priced at a P/BV of 6.66 based on its NAV of Rs.6.76 post issue. As company is making losses, so there is no point in calculating P/E and also as per financials, IPO looks very expensive. As per RHP, there is no listed peers. On BRLM's front, Aryaman Financial Services Limited associated with this SME IPO and handled 26 IPOs in last 3 years. From last 10 IPOs, one opened below issue price and remaining above issue price. As of now from 10 IPOs, 2 are trading below issue price and remaining are trading above issue price. (As on 25.10.21 ) For Suyog, financials are not good, company is making consistent losses, so issue looks very aggressively priced. Performance of BRLM is average. So we give AVOID rating to this SME IPO as there is no point to make investment in loss making company.

• 1 Mr. RajKumar Gurbaxani 
• 2 Mr. Om Prakash Gurbaxani
• 3 Mr. Shivshankar Lature