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Jeena Sikho NSE SME IPO review (May apply)

Review By Dilip Davda on Mar 27, 2022

•    JSLL is a healthcare company alternative medical system i.e. Ayurvedic.
•    It has posted higher margins for the recent two fiscals. 
•    Based on its super earnings, the issue is fully priced. 
•    Risk seeker/cash surplus investors may consider parking of funds. 

ABOUT COMPANY: 
Jeena Sikho Lifecare Limited (JSLL) is an ayurvedic healthcare company headquartered in Zirakpur, Punjab. Founded by Mr Manish Grover (popularly known as Acharya Manish) in the year 2017, the main motive of the Company is to build a healthy India through preventive measures by providing authentic and good quality ayurvedic products.

JSLL is operating 150+ Ayurvedic Clinic in 23 states, out of the 9 clinics are owned & operated by it and the rest of the clinics are operated by franchisee partners on a commission basis & to maintain quality, it is mandatory for all the franchisees to follow JSLL's standard operating procedure (SOPs) issued by it from time to time. The company has a wide range of ayurvedic products. 

Ayurveda is an alternative medical system with historical roots in the Indian subcontinent. The origin of Ayurveda dates back to the Vedic era. It was developed more than 3,000 years ago in India. It's based on the belief that health and wellness depend on a delicate balance between the mind, body, and spirit. Its main goal is to promote good health, not fight disease. Ayurvedic theory states that all areas of life impact one's health, so it follows that the Vedas cover a wide variety of topics, including health and healthcare techniques, astrology, spirituality, government and politics, art, and human behaviour.

Jeena Sikho Lifecare is a developing health care product & services provider in India. The company has a portfolio of over a wide range of Ayurvedic products. The company also conducts various health checkup camps, yoga sessions free of cost to make people aware of their health problems. As of December 31st, 2021, Company had 1226 employees on its payroll. 

ISSUE DETAILS/CAPITAL HISTORY: 
To part finance its needs for marketing and sales promotion for its brand "Shuddhi" (Rs. 15.00 cr.), repayment of short term debt (Rs. 6.35 cr.) working capital (Rs. 23.10 cr.) and general corporate purpose (Rs. 10.45 cr.), JSLL is coming out with a maiden IPO of 3700000 equity shares of Rs. 10 each at a fixed price of Rs. 150 per share to mobilize Rs. 55.50 cr. The issue opens for subscription on March 30, 2022, and will close on April 07, 2022. Minimum application is to be made for xxx shares and in multiples thereon, thereafter. Post allotment, shares will be listed on NSE SME Emerge. The issue constitutes 26.79% of the post issue paid-up capital of the company. JSLL is spending Rs. 0.60 cr. for this IPO process. 

The issue is solely lead managed by Fast Track Finsec Pvt. Ltd. and Skyline Financial Services Pvt. Ltd. is the registrar to the issue. Prabhat Financial Services Ltd. is the market maker for this company. 

Having issued initial equity shares at par, the company issued further equity shares at a fixed price of Rs. 1367 per share in February 2021. It has also issued bonus shares in the ratio of 90 for 1 in August 2021. Thus it emptied the coffer before IPO. The average cost of acquisition of shares by the promoters is Rs. 0.11 per share. 

Post-IPO, JSLL's current paid-up equity capital of Rs. 10.11 cr. (10111192 shares) will stand enhanced to Rs. 13.81 cr. (13811192 shares). Based on the IPO pricing, the company is looking for a market cap of Rs. 207.17 cr. 

FINANCIAL PERFORMANCE: 
On the financial performance front, for the last three fiscals, JSLL has posted turnover/net profits of Rs. 105.88 cr. / Rs. 6.00 cr. (FY19), Rs. 95.17 cr. / Rs. 5.73 cr. (FY20) and Rs. 136.87 cr. / Rs. 10.16cr. (FY21). For the first six months of FY22 that ended on September 30, 2021, it earned a net profit of Rs. 6.22 cr. on a turnover of Rs. 72.52 cr. Improved net profits for FY21 and H1FY22 raises eyebrows. 

For the above reported period, the company has posted an average EPS of Rs. 7.26 and an average RoNW of 37.23%. The issue is priced at a P/BV of 4.80 based on its NAV of Rs. 31.27 as of September 30, 2021, and at a P/BV of 2.38 based on its post-IPO NAV of Rs. 63.08. 

If we annualize FY22 super earnings and attribute it to the fully diluted post IPO equity capital, then the asking price is at a P/E of 16.67. Thus the issue is fully priced on the basis of bumper results of FY22 and if we attribute FY21 earnings then the P/E stands at 20.40. 

DIVIDEND POLICY:
The company has not declared any dividend for any financial year so far. It will adopt a prudent dividend policy post listing based on its financial performance and future prospects. 

COMPARISON WITH LISTED PEERS:
As per the offer document, JSLL has shown Kerala Ayurved as its listed peer. It is currently trading at a P/E of 00 (as of March 25, 2022). However, they are not truly comparable on an apple-to-apple basis. 

MARCHANT BANKER'S TRACK RECORDS:
Data on Merchant Banker's track records are missing in the offer document. However, as per our website, this is the 6th mandate from Fast Track in the last three fiscals. Out of the last 5 listings, two opened at discount and the rest with premiums ranging from 0.83% to 12.61% on the day of listings.


Conclusion / Investment Strategy

The issue is fully priced based on its recent super fiscal performance. Though Ayurvedic treatment is gaining ground, it’s a highly competitive and fragmented segment. Risk seeker/cash surplus investors may consider investing in this fully priced offer with a long term perspective.

Review By Dilip Davda on Mar 27, 2022

Review Author

DISCLAIMER: No financial information whatsoever published anywhere here should be construed as an offer to buy or sell securities, or as advice to do so in any way whatsoever. All matter published here is purely for educational and information purposes only and under no circumstances should be used for making investment decisions. Readers must consult a qualified financial advisor before making any actual investment decisions, based on information published here. With entry barriers, SEBI wants only well-informed investors to participate in such offers. With crazy listings in the past, SME IPOs drew the attention of investors across the board. However, as SME issues have entry barriers and continued low preference from the broking community, any reader taking decisions based on any information published here does so entirely at own risk. The above information is based on information available as on date coupled with market perceptions. The Author has no plans to invest in this offer.

(SEBI registered Research Analyst-Mumbai).


About Dilip Davda

Dilip Davda

Dilip Davda is veteran journalist associated with stock market since 1978. He is contributing to print and electronic media on stock markets/insurance/finance since 1985.

Dilip Davda is a leading reviewer of public issues and NCDs in the primary stock market in India. The knowledge he gained over 3 decades while working in the stock market and a strong relationship with popular lead managers makes his reviews unique. His detail fundamental and financial analysis of companies coming up with IPO helps investors in the primary stock market. Dilip Davda has a special interest in analyzing the SME companies and writing reviews about their public issues. His reviews are regularly published online and in news papers.

Email: dilip_davda@rediffmail.com

Jeena Sikho IPO FAQs

  1. 1. Why Jeena Sikho IPO?

    The initial public offer (IPO) of Jeena Sikho Lifecare Limited offers an early investment opportunity in Jeena Sikho Lifecare Limited. A stock market investor can buy Jeena Sikho IPO shares by applying in IPO before Jeena Sikho Lifecare Limited shares get listed at the stock exchanges. An investor could invest in Jeena Sikho IPO for short term listing gain or a long term.

  2. 2. How is Jeena Sikho IPO?

    Read the Jeena Sikho IPO recommendations by the leading analyst and leading stock brokers.

  3. 3. Jeena Sikho IPO what should investors do?

    Jeena Sikho IPO offers an opportunity to buy IPO shares before they get listed at the stock exchanges. Read the Jeena Sikho IPO Notes, Analysis and Recommendations by leading stock brokerage firms and experts in the above answer.

  4. 4. Is Jeena Sikho IPO good?

    Our recommendation for Jeena Sikho IPO is to subscribe for long term.

  5. 5. Is Jeena Sikho IPO worth Investing?

    As per the analysis by our lead analyst Mr. Dilip Davda, we suggest you to subscribe for long term to the Jeena Sikho IPO.

  6. 6. When will Jeena Sikho IPO allotment status?

    The Jeena Sikho IPO allotment status will be available on or around [.]. The allotted shares will be credited in demat account by [.]. Visit Jeena Sikho IPO allotment status to check.

  7. 7. When will Jeena Sikho IPO list?

    The Jeena Sikho IPO will list on Tuesday, April 19, 2022, at NSE SME.

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