Started in 2011, Mumbai based White Organic Retail Ltd is engaged in the trading of agriculture products such as Vegetables, Fruits, Grains, Pulses, and Cereals. Initially, before Sept 2016, the company was named as Sapna Infraventure Private Limited and involved in Real Estate Development Activity. In Oct 2016, the company started retailing and distribution operations of Organic Products. It had a store for the commercial operation at Chembur, Mumbai which is closed now. Although, the company is about to open the new store at Bhandup (West), Mumbai. Future Plans:The company has future plans to expand distribution and retail network, which are as follow: 1. It is planning to establish more than 40 retail outlets. 2. The company will launch new products such as Aloe Vera Juices, Incence Sticks, Aloe Vera Gel, Soap, Mukhwas, Health Powders, Syrups, Churans, Snacks, Sweetners, Cow Ghee, Jaggery, Beauty Products, etc. 3. It is also looking to introduce the capsule range of Jvara, Haldi, Amla, etc; and medicinal powders of Rasayan, Moringa, Ashwagandha, Gokharu, etc. 4. The management of the company is also looking to introduce eCommerce website and mobile application soon.5. White Organic Retail Ltd also has plans to start export operations in future. The competitive strengths of the company are:1. A strong client base2. Wide product range3. Effective supplier relationship On the financial performance front, White Organic has posted turnover/net profits of Rs. 1.07 cr. / Rs. 0.24 cr. (FY16), Rs. 2.55 cr. / Rs. 0.59 cr. (FY17), Rs. 84.00 cr. / Rs. 3.02 cr. (FY18). For the upto 31.12.18 of FY19, it has earned a net profit of Rs. 4.51 cr. on a turnover of Rs. 116.35 cr. Company has show very high growth in top-line and bottom-line since FY18. Trade receivables for company in FY18 is around Rs 33.31 Cr which is around 40% of total income, which is very much high for any kind of business. White Organic has posted an average EPS of Rs. 24.27 and an average RoNW of 51.46% for last three fiscals. The issue is priced at a P/BV of 0.81 on the basis of its NAV of Rs. 77.89 as on 31.12.18 and at a P/BV of 0.88 on the basis of post issue NAV of Rs 71.19 post issue. If we annualise latest earnings and attribute it on fully diluted post issue equity, then asking price is at a P/E of around 5.44 thus issue appears very reasonably priced and if we take FY18 earnings, then P/E is around 11.36. As per RHP, there is no listed peers. On BRLM's front, for Finshore Management Services Limited this is the 10th SME IPO. From last 9 SME IPOs, 3 opened below issue price, 1 at par and 5 above issue price with 1% to 20% gains. As of now from last 9 IPOs, 5 are trading below or at issue price and 4 above or at par. ( As on 22.04.19 ) Company has show very high growth since FY18, RoNW is 51.46% and issue looks very reasonably priced with respect to current earnings with P/E of 5.44. Higher value of trade receivables is big concern and Performance of BRLM is poor. So we give NEUTRAL rating to this SME IPO.
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