Urban Enviro Waste Management Limited

As per financial performance, Urban Enviro Waste Management Limited has posted total income/net profits of Rs 12.8 Cr / Rs 0.75 Cr (FY20), Rs 15.87 Cr / Rs 0.83 Cr (FY21), Rs 19.77 Cr / Rs 1.29 Cr (FY22) and Rs 26.47 Cr / Rs 1.06 Cr (9M FY23), So company has shown good results. Company has posted an average EPS of Rs 3.07/- and average RoNW of 47.01% for last three fiscals. Issue is priced at a P/BV of 8.05 as per NAV of Rs 12.42/- as on 31.12.22. As per FY22 earnings on fully diluted equity post issue, asking price is at P/E of around 33.4 and as per annualised FY23 earnings P/E is 30.52. As per RHP, comparison between listed peer is shown in above table. On BRLM's front, Pantomath Capital Advisors Private Limited is associated with this SME IPO and handled 4 SME IPOs in last 3 years.  Pantomath Capital Advisors Private Limited : This is 5th IPO from this BRLM in last 3 years. From last 4 IPOs, all opened above issue price or at par on the day of listing. As of now, from last 5 IPOs, one is trading below issue price and remaining are trading above issue price or at par. ( As on 07.06.23 ) As Per financials, Urban Enviro Waste Management Limited has shown good results, RoNW is 40.77% and P/E is respectively 33.4 and 30.52 as per FY22 and annualised FY23 earnings, which looks aggressively priced. Company is in waste management services and primarily works with local municipalities. This segment has good growth opportunity, but highly competitive and fragmented. Performance of BRLM is good. We may find better listed player with cheaper valuations. 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 Mr. Suresh Sharma