Techknowgreen Solutions Limited

As per financial performance, Techknowgreen Solutions Limited has posted total income/net profits of Rs 7.85 Cr / Rs 0.37 Cr (FY21) and Rs 9.99 Cr / Rs 1.08 Cr (FY22) and Rs 14.86 Cr / Rs 4.51 Cr (FY23), So company has shown good results, but sudden rise in bottom-line before IPO is very surprising. Company has posted an average EPS of Rs 5.26/- and average RoNW of 47.84% for last three fiscals. Issue is priced at a P/BV of 2.75 as per NAV of Rs 31.23/- as on post issue. As per FY22 earnings on fully diluted equity post issue, asking price is at P/E of around 58.73 and as per FY23 earnings P/E is 14.07. As per RHP, there are no peers. On BRLM's front, Indorient Financial Services Limited is associated with this SME IPO and handled 2 SME IPOs in last 2 years. From last 2 IPO, one opened below issue price and remaining opened at par or above issue price on the listing day. As of now from last 2 IPO, one is trading above issue price and other below issue price. ( As on 14.09.23 ) As per financials, Techknowgreen Solutions Limited has shown good results, RoNW is 71.24% and P/E is respectively 58.73 and 14.07 as per FY22 and FY23 earnings. As per FY22 earnings issue looks aggressively priced and as per FY23 earnings issue looks fully priced. Also sudden rise in net profit and higher value of issue expenses generates and it would be difficult to maintain same margins in future. Company is in business of environmental consulting using IT solutions through cutting-edge software applications and compliance solutions. So we are giving AVOID rating to this SME IPO. Readers must consult a qualified financial advisor prior to making any actual investment decisions.

• 1  Ajay Ramakant Ojha
• 2 Prasad Rangrao Pawar