Transteel Seating Technologies Limited

As per financial performance, Transteel Seating Technologies Limited has posted total income/net profits of Rs 22.87 Cr / Rs (0.006) Cr (FY21), Rs 28.06 Cr / Rs 1.59 Cr (FY22), Rs 59.61 Cr / Rs 9.09 Cr (FY23) and Rs 31.33 Cr / Rs 4.17 Cr (Upto Q2 FY24). So company has shown good growth, but sudden rise in net-profit just before IPO, is very surprising. Company has posted an average EPS of Rs 3.80/- and average RoNW of 27.09% for last three fiscals. Issue is priced at a P/BV of 3.28 as per NAV of Rs 21.36/- as on 30.09.23. As per FY22, FY23 and annualised FY24 earnings on fully diluted equity post issue, asking price is at P/E of respectively around 88.84, 15.53 and 16.91. As per RHP, comparison between listed peers is shown in above table. On BRLM's front, Gretex Corporate Services Limited is associated with this SME IPO and handled 16 SME IPOs in last 3 years. three opened below issue price and remaining opened at par or above issue price on the listing day. As of now from last 10 IPO, four is trading below issue price and remaining are trading above issue price. ( As on 25.10.23 ) On BRLM's front, Pantomath Capital Advisors Private Limited is associated with this SME IPO and handled 8 SME IPOs in last 3 years. From last 8 IPO, all opened above issue price or at par on the listing day. As of now from last 8 IPO, all are trading above issue price. ( As on 25.10.23 ) As per financials, Transteel Seating Technologies Limited has shown good results, RoNW is 37.21% and P/E is respectively 88.84, 15.53 and 16.91 as per FY22, FY23 and annualised FY24 earnings. So, issue looks fairly priced. But, sudden rise in net-profit is very surprising. Company is in business of B2B office furniture solution, which is highly fragmented and competitive segment. Performance of BRLM is good. So we are giving NEUTRAL rating to this SME IPO. Readers must consult a qualified financial advisor prior to making any actual investment decisions.

• 1  Mr. Shiraz Ibrahim
• 2 Ms. Nasreen Shiraz