"Sir, our sales are falling and profits are falling. And we have to go for an IPO. What should we do now?"
"Just don't worry. The duffer investors just look at the profit figure and don't dig deeper. Just show some exceptional income and increase the profit figure. Everything will be ok."
"Wonderful sir. I have added an exceptional income of Rs 51 lakhs during 1st quarter of this year (ending June 30th, 2023). Page 65 of RHP. Pro rata profit for FY2024 now comes to Rs 3.77 cr and PE ratio post issue at 10.24x. "
"Good job done. If this exceptional income was not added, the pro rata profit for the year FY2024 would have been just Rs 1.6 cr and PE ratio post issue at 24x. We have fooled everyone. You will get a good salary hike now"
PE firms probably did fund raise at 120 cr valuation so 36cr mcap at listing appear a major loss for them. Also no growth in last FY is also alarming. Am I missing something here?