Varyaa Creations Limited is engaged in the business of wholesale trading of gold, silver, precious stone, semi-precious stone. Apart from the above, from this financial year onwards, the company also intends to focus on manufacturing and selling of jewellery's. The company manufactures its jewellery through job worker located in Mumbai. The company’s registered office and business operations are based in Mumbai only. Currently, the products are sold only through the offline market, i.e. from the registered office located in Mumbai. The customers can also make inquiry through the online platform www.varyaacreations.com. Further, the company will also be selling its products through its own online platform, i.e. www.baubleberry.com. The major raw material used for making the products is gold, precious stones, gemstones, semi-precious stone, silver etc. which is further provided to the job worker who manufacture the jewellery for them. The job worker manufactures the products as per design and pattern provide by them. Designing of the products are done in-house. They get the products manufactured based on the orders basis and as and when need basis. They procure gold, silver, gemstones, precious and semi-precious stones majorly through the bullion market and jewellery market dealers located in Mumbai. The jewellery is widely sold through B2B and B2C platform. They also sell customized jewellery to customers. The product portfolio includes Necklace, Earring, Tops, Ring, Bracelet, Bangles, Gemstones, Diamonds, Lab Grown diamonds, Pearls and they also make customized jewelleries as per customer's needs. Recognising the growing demand for ethically sourced diamonds, they have recently expanded the portfolio to include Lab Grown Diamonds. As part of its strategic growth plan, the Company proposes to increase its geographical location of operations by setting up a retail showroom in Agra. Further, the company is under the process of creating an additional online platform, i.e. www.baubleberry.com to sell its products online. Through this platform, the company envisions expanding the Baubleberry platform to showcase and collaborate with other small and mid-sized boutique jewellery brands in the near future. This unique 'shop-in-shop' concept aims to offer a curated selection of distinctive jewellery pieces, providing customers with a diverse and inspiring shopping experience. As per financial performance, Varyaa Creations Limited has posted total income / net profits of Rs 0.12 Cr / Rs (0.13) Cr (FY21), Rs 2.53 Cr / Rs 0.58 Cr (FY22), Rs 5.38 Cr / Rs 0.79 Cr (FY23) and Rs 17.62 Cr / Rs 3.51 Cr (upto Q3 FY24). So as per previous financials data, company has shown zigzag results, and sudden increase in sales and net profit, just before IPO generates doubts. Issue is priced at a P/BV of 2.97 as per NAV of 50.53 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 123.88, 91.06 and 15.35 respectively, which looks fully priced. As per RHP, comparison between listed peers is shown in above table. On BRLM's front, Inventure Merchant Banker Services Private Limited is associated with this SME IPO and handled 8 SME IPOs in last 3 year. From last 8 SME IPOs, two opened below issue price and remaining opened above issue price or at par on the day of listing. As of now from last 8 SME IPOs, all are trading below issue price. ( As on 18.04.24 ) As per financials, Varyaa Creations Limited has shown zig-zag results, RoNW is 132.75% and P/E is respectively 123.88, 91.06 and 15.35 as per FY22, FY23 and annualised FY24 earnings. So, issue looks fully priced and sudden rise in sales and net-profit is very surprising. Company is engaged in business of wholesale trading of gold, silver, precious stone, semi-precious stone as well as manufacturing and selling of Gold jewellery's, which is highly competitive and fragmented segment. Performance of BRLM is poor post listing. 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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