Established in the year 2010, initially Yash Optics & Lens Limited was engaged in trading and distribution of spectacle and optical lenses which were sourced from Indian importers and traded in Mumbai. Over the years, they have increased the product portfolio with brands like Seto, IRIS etc. and expanded the network & distribution channel in Maharashtra, Gujarat and Rajasthan. Under the trading space, the company sources the spectacle/optical lenses and market the same under its own brands for further sale through distributors and own retail channels. The Company provides wide array of vision correction solutions. The Company is primarily engaged in the business of manufacturing, trading, distribution and supplying of comprehensive range of spectacle/optical lenses. They are offering from single vision lenses to advanced progressive lenses, customized progressive lenses to personalized progressives for professionals along with wide range of coatings. The products are available across the entire range of price points enabling them to serve the entire gamut of customers from economy. The company manufacture the lenses based on order and prescription received from the customers. In order to achieve the synergy benefits from combining the proprietary concern, the Company has acquired M/s Yash Lenses in the year 2021-22 through The Business Transfer Agreement among M/s Yash Lenses and Yash Optics & Lens Private Limited dated April 01, 2021 for a Consideration of Rs.724.73 Lakhs which was the NAV of the assets taken over, all the assets and liabilities have been valued at the book value as appearing in the books of M/s Yash Lenses. Before the said acquisition, the Company was engaged only in trading and distribution of a wide range of optical and spectacle lenses. Post the said acquisition, the Company has started manufacturing of spectacle / optical lenses in its own name which was earlier manufactured by Yash Lenses. The Company is also appointed by HOYA Lens India Private Limited, as an exclusive distributor to sell, market and distribute the “Pentax” brand of Ophthalmic lenses in India pursuant to agreement dated October 01, 2022 as per the terms and condition laid down in the said agreement. The manufacturing facility is situated at 71-C, Government Industrial Estate, Ganesh Nagar, Kandivali (West), Mumbai400067, India, is well equipped with required facilities including machinery, other handling equipment’s to facilitate smooth manufacturing process and easy logistics. They endeavor to maintain safety in the premises by adhering to key safety norms, established through the internal health and safety manual, accompanied by regular safety meetings. The manufacturing facility is accredited with ISO 9001:2015 for quality management system for the manufacturing, import, export, trading, stockiest and supplier of ophthalmic lens and ophthalmic products. The principal raw materials required for the manufacturing process includes semi -finished ophthalmic (CR-39) lenses, plastic plain/ blank lenses etc. The Company maintains a base of reliable material suppliers who consistently provide materials of appropriate dimensions as per the requirements. They usually do not enter long-term supply contracts with any of the raw material suppliers. The raw materials are majorly procured in the international market from China, Germany, Japan, South Korea, USA etc and in the domestic market from Maharashtra, Telangana Rajasthan, Karnataka and Delhi etc. As per financial performance, Yash Optics & Lens Limited has posted total income / net profits of Rs 14.98 Cr / Rs 1.06 Cr (FY21), Rs 29.86 Cr / Rs 6.82 Cr (FY22), Rs 39.80 Cr / Rs 8.07 Cr (FY23) and Rs 18.69 Cr / Rs 4.23 Cr (upto Q2 FY24). So as per previous financials data, company has shown very good growth, but sudden rise in net-profit just before IPO raises doubts. Company has posted an average EPS of Rs 3.66 and average RoNW of 45.82% for last three fiscals. Issue is priced at a P/BV of 6.15 as per NAV of 13.18 as on 30.09.2023. 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 29.43, 24.87 and 23.74 respectively, which looks fully priced. As per RHP, comparison between listed peers is shown in above table. On BRLM's front, Shreni Shares Limited is associated with this SME IPO and handled 28 SME IPOs in last 3 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, one is trading below issue price and remaining trading above or at par issue price. ( As on 21.03.24 ) As per financials, Yash Optics & Lens Limited has shown good results, RoNW is 42.20% and P/E is respectively 29.43, 24.87 and 23.74 as per FY22, FY23 and annualised FY24 earnings. So, issue looks fully priced. Company is in business of trading and distribution of spectacle and optical lenses, which is highly competitive and fragmented segment. Performance of BRLM is good. So, we give NEUTRAL rating for this IPO. Readers must consult a qualified financial advisor prior to making any actual investment decisions.
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