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Review By Dilip Davda on March 18, 2024
• NIIL is engaged in retail furniture and fixtures display and marketing.
• It has wide product range offerings to meet the requirements of its B2B clients.
• The company posted growth in its top and bottom lines for the reported periods.
• The sudden boost in top and bottom lines from FY23 raise eyebrows.
• Based on FY24 annualized super earnings, the issue is fully priced.
• Well-informed investors may park moderate funds for medium term rewards.
PREFACE:
Though the IPO is opening on 22.03.24, and the RHP is dated 16.03.24, the offer document was not listed on designated exchange website till the afternoon of 18.03.24. This is how the compliances are adhered to. The super margins posted for H1 of FY24 appears to have been fabricated to match the asking price. The offer document has blurred attachments of financial statements.
ABOUT COMPANY:
Naman In-store (India) Ltd. (NIIL) is one of the prominent display and retail furniture & fixture company with a broad spectrum of offerings and in-store solutions to various industries and retail stores. Further, it manufactures modular furniture for offices, beauty store, low-housing kitchens, educational institution as well as supermarket shelving solutions.
The Company specializes in the design and execution of turnkey projects by bringing together under the same roof all of the resources necessary to meet the needs of any fit-out project. It specializes to provide one-stop solutions across multiple retail stores and industries as all engineering and shop drawing is performed in-house, under one roof. The company manufactures in-store customized furniture and fixtures in wood, metal and plastic and in respect of kiosks, full shops, Countertop Units (CTU), Countertop Display Unit (CDU), Point of Sales Merchandising (POSM), etc. It operates on a B2B (Business-to-Business) model.
NIIL's range of fixtures is designed to enhance the visual appeal and functionality of retail spaces. It has a diverse clientele spanning different geographies, industry verticals, and service offerings.
As on September 30, 2023 the company has served around 32 retail customers and their franchises and 04 industrial customers. Its manufacturing facilities is located at Vasai, Maharashtra, having constructed area of approx. 1,41,687 Sq. Ft. The company has well established and high-tech manufacturing equipments and design facility to manufacture the various combination and size products as per the design and specification of clients.
NIIL provides services on PAN India basis. Further, it has expanded its reach and presence by successfully procuring export order in USA to supply retail furniture and fixtures. Its retail product contribution has seen declining trends for the reported periods from 98.45% inFY21 to 78% in H1-FY24. As of September 30, 2023, it had 491 employees on its payroll.
ISSUE DETAILS/CAPITAL HISTORY:
The company is coming out with its maiden book building route IPO of 2848000 equity shares of Rs. 10 each to mobilize Rs. 25.35 cr. (at the upper cap). The company has announced a price band of Rs. 84 - Rs. 89 per share. The issue opens for subscription on March 22, 2024, and will close on March 27, 2024. The minimum application to be made is for 1600 shares and in multiples thereon, thereafter. Post allotment, shares will be listed on NSE SME Emerge. The issue constitutes 27% of the post-IPO paid-up capital of the company. From the net proceeds of the IPO, the company will utilize Rs. 4.67 cr. for land acquisition at Butibori, MIDC, Rs. 12.18 cr. for construction of factory building, and the rest for general corporate purposes.
The issue is solely lead managed by GYR Capital Advisors Pvt. Ltd., and Bigshare Services Pvt. Ltd. is the registrar of the issue. Giriraj Stock Broking Pvt. Ltd. is the market maker for the company.
The company has issued entire equity capital at par and has issued bonus shares in the ratio of 9 for 2 in November 2023. The average cost of acquisition of shares by the promoters is Rs.1.82, Rs.2.32, and Rs. 2.48 per share.
Post-IPO, company's current paid-up equity capital of Rs. 7.70 cr. will stand enhanced to Rs. 10.55 cr. Based on the upper IPO price band, the company is looking for a market cap of Rs. 93.88 cr.
FINANCIAL PERFORMANCE:
On the financial performance front, for the last three fiscals, the company has posted a total revenue/net profit of Rs. 13.41 cr. / Rs. 0.05 cr. (FY21), Rs.51.09 cr. / Rs. 0.21 cr. (FY22), Rs. 149.94 cr. / Rs. 3.82 cr. (FY23). For H1 of FY24 ended on September 30, 2023, it earned a net profit of Rs. 6.19 cr. on a total revenue of Rs. 79.30 cr. The pages of financial details are blurred and unreadable in the offer document (pages no. 56 to 58 and pages no. 191 to 230). The sudden boost in its top and bottom lines from FY23 onwards appears to have been fabricated to match the asking price.
For the last three fiscals, it has reported an average EPS of Rs. 2.64, and an average RONW of 36.78%. The issue is priced at a P/BV of 1.04 based on its NAV of Rs. 85.96 as of September 30, 2023, and at a P/BV of 2.51 based on its post-IPO NAV of Rs. 35.44 per share (at the upper cap).
If we attribute annualized FY24 earnings to its post-IPO fully diluted paid-p capital, then the asking price is at a P/E of 7.59. Based on FY23 earnings, the P/E stands at 24.59. Thus the IPO appears fully priced.
For the reported periods, the company has posted PAT margins of 0.38% (FY21), 0.42% (FY22), 2.55% (FY23), 7.81% (H1-FY24), and RoCE margins of 3.81%, 6.82%, 23.98%, 24.51% respectively for the referred periods.
DIVIDEND POLICY:
The company has not declared any dividends for the reported periods of the offer document. It will adopt a prudent dividend policy based on its financial performance and future prospects.
COMPARISON WITH LISTED PEERS:
As per the offer document, the company has no listed peers to compare with.
MERCHANT BANKER'S TRACK RECORD:
This is the 23rd mandate from GYR Capital Advisor in the last three fiscals, out of the last 10 listings, all listed with premiums ranging from 20.00% to 366.67% on the day of listing.
Review By Dilip Davda on March 18, 2024
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. My reviews do not cover GMP market and operators game plans. Readers must consult a qualified financial advisor before making any actual investment decisions, based the on information published here. With entry barriers, SEBI wants only well-informed investors to participate in such offers. With crazy listings in the recent past, SME IPOs drew the attention of investors across the board and lead to seer madness. 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 their own risk. The above information is based on information available as of date coupled with market perceptions. The Author has no plans to invest in this offer.
About 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.
(Dilip Davda -SEBI registered Research Analyst-Mumbai,
Registration no. INH000003127 (Perpetual)
Email id: dilip_davda@rediffmail.com ).
The initial public offer (IPO) of Naman In-Store (India) Limited offers an early investment opportunity in Naman In-Store (India) Limited. A stock market investor can buy Naman In-Store (India) IPO shares by applying in IPO before Naman In-Store (India) Limited shares get listed at the stock exchanges. An investor could invest in Naman In-Store (India) IPO for short term listing gain or a long term.
Read the Naman In-Store (India) IPO recommendations by the leading analyst and leading stock brokers.
Naman In-Store (India) IPO offers an opportunity to buy IPO shares before they get listed at the stock exchanges. Read the Naman In-Store (India) IPO Notes, Analysis and Recommendations by leading stock brokerage firms and experts in the above answer.
Our recommendation for Naman In-Store (India) IPO is to subscribe for long term.
As per the analysis by our lead analyst Mr. Dilip Davda, we suggest you to subscribe for long term to the Naman In-Store (India) IPO.
The Naman In-Store (India) IPO allotment status will be available on or around March 28, 2024. The allotted shares will be credited in demat account by April 1, 2024. Visit Naman In-Store (India) IPO allotment status to check.
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