V R Infraspace Limited is a construction and real estate development company, focused primarily on construction and development of residential and commercial projects, in and around Vadodara, Gujarat. They have developed projects catering to the middle income and high-income group. The residential apartment portfolio consists of various types of accommodation of varying sizes. All of the Projects are constructed and proposed to constructed are on own land of Company. Company currently offers the residential and commercial projects under the name 'VR'. Completed projects by company are VR Celebrity Luxuria (Residential), VR Imperia (Residential) and VR One (Commercial). Upcoming projects are VR Infinity (Residential cum Commercial) and VR Vivanta (Residential - subsidiary company project). As on August 31, 2023 they have 09 employees at the construction site and Registered Office including the key managerial persons. As per financial performance, V R Infraspace Limited has posted total income / net profits of Rs 13.49 Cr / Rs 0.72 Cr (FY21), Rs 13.88 Cr / Rs 0.80 Cr (FY22), Rs 18.76 Cr / Rs 2.62 Cr (FY23) and Rs 7.32 Cr / Rs 0.90 Cr (upto Q2 FY24). So as per previous financials data, company has shown average results and sudden increase in net profit, just in before IPO generates doubts. Company has posted an average EPS of Rs 2.62 and average RoNW of 15.01% for last three fiscals. Issue is priced at a P/BV of 2.27 as per NAV of 37.5 as on post issue. If we attribute latest earnings of FY22, FY23 and annualised FY24 on fully diluted equity post issue, then asking price is at a P/E of around 94.71, 28.75 and 42.17 respectively, which looks aggressively priced. As per RHP, comparison between listed peers is shown in above table. On BRLM's front, Beeline Capital Advisors Private Limited is associated with this SME IPO and handled 30 SME IPOs in last 2 year. From last 10 SME IPOs, all opened above issue price or at par on the day of listing. As of now from last 10 SME IPOs, two are trading below issue price and remaining are trading above or at par issue price. ( As on 28.02.24 ) As per financials, V R Infraspace Limited has shown average results, RoNW is 21.66% and P/E is respectively 94.71, 28.75 and 42.17 as per FY22, FY23 and annualised FY24 earnings. So, issue looks aggressively priced and sudden rise in net-profit is very surprising. Company is in business of real estate development of residential and commercial projects, in and around Vadodara, Gujarat, which is highly competitive and fragmented segment. Performance of BRLM is good. So, we give AVOID rating for this IPO. Readers must consult a qualified financial advisor prior to making any actual investment decisions.
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