Zerodha - Open Online Account

Nirmitee Robotics BSE SME Startup IPO review (Avoid)

Review By Dilip Davda on Mar 27, 2020


•    NRIL is in providing robotic HVAC services.
•    Its financial performance indicates inconsistency.
•    Superb performance in Pre-IPO year raises concern.
•    LM has average track records.
•    Based on the latest financial performance, the issue appears exorbitantly priced.


ABOUT COMPANY:
Nirmitee Robotics India Ltd. (NRIL) is a tech-based company making robots using robotic technology and is also engaged in providing HVAC (Heating, Ventilation and Air Conditioning) Duct Cleaning and Ozone sterilization services with these robots. The Company makes custom- made robots- operated by machines that clean the inside of HVAC Air Ducts - by scrubbing, polishing, sucking, scraping and removal of the accumulated contaminants like dust, debris, bacteria, mold and even dead pests and rodents and provides the Ozone treatment to the ducts from the inside and thus sanitizes it for many more months to come. NRIL has its own fleet of patented, duct cleaning robots, which are employed in its service to do the inspection, cleaning and post-cleaning operations. All these robots are fitted with an advanced controller mechanism and a high-resolution camera. Over time these HVAC Air Ducts accumulate the above-mentioned contaminants and if left unclean, these contaminants clog the air ducts and circulate airborne diseases throughout the facility. With a professional management team and a culture of innovation, learning, quality and deep service orientation; it provides professional cleaning services to provide fresh clean air so that the people can live a healthier life.
 
NRIL's purpose-built; duct cleaning robots can clean the most difficult to reach corners in any air duct, and give super clean and healthy air, which is not possible by any other physical cleaning process. Bad Indoor Air Quality (IAQ) affects the health of the employees and other visitors and the majority of one's time is spent breathing indoor air. It offers service to offices, convention centres, hospitals, train and specializes in Buildings that house Sensitive Equipment like Data Centers.
 
ISSUE DETAILS/CAPITAL HISTORY:
To meet its plans for the redemption of preference shares (Rs. 1.75 cr.), Security Deposit towards the acquisition of registered office, R & D Facility, assembling unit (Rs. 1.00 cr.) and general corpus fund (Rs. 0.08 cr.) needs, NRIL is coming out with a maiden IPO of 175200 equity shares of Rs. 10 each at a fixed price of Rs. 185 per share to mobilize Rs. 3.24 cr. The issue opens for subscription on 31.03.20 and will close on 09.04.20. Minimum application is to be made for 600 shares and in multiples thereon, thereafter. Post allotment, shares will be listed on BSE SME Startup platform. Issue constitutes 29.19% of the post-issue capital of the company. NRIL is spending Rs. 0.41 cr. for this IPO process.
 
The issue is solely lead managed by Aryaman Financial Services Ltd. and Bigshare Services Pvt. Ltd. is the registrar to the issue. Aryaman Capital Markets Ltd. is acting as a market maker for this IPO.
 
Having issued entire equity at par, NRIL has also issued bonus shares in the ratio of 14 shares for every 1 share held in February 2020. The average cost of acquisition of shares by the promoters is Rs. 5.06 per share. Post issue, company's current paid-up equity capital of Rs. 0.43 cr. will stand enhanced to Rs. 0.60 cr. With this IPO company is looking for a market cap of Rs. 11.10 cr.
 
FINANCIAL PERFORMANCE:
On the financial performance front, for the last three fiscals, NRIL has posted turnover/net profits of Rs. 0.06 cr. / Rs. 0.01 cr. (FY17), Rs. 0.70 cr. / Rs. 0.02 cr. (FY18) and Rs. 2.04 cr. / Rs. 0.21 cr. (FY19). For the first six months of FY20, it has earned a net profit of Rs. 0.03 cr. on a turnover of Rs. 1.00 cr. Superb performance in pre-IPO year raises concern. With such small operations, NRIL coming out with IPO in March 2020 with FY20 financial performance for the 1st half (i.e. six months period ended on 30.09.19) also raises concern.
 
For the last three fiscals, NRIL has posted an average EPS of Rs. 4.70 and an average RoNW of 13.63%. The issue is priced at a P/BV of 1.05 based on its NAV of Rs. 175.61 as on 30.09.19 and at a P/BV of 3 based on post issue NAV of Rs. 61.72.
 
If we annualize latest earnings and attribute it on fully diluted post issue equity then asking price is at a P/E of around 185, thus IPO appears exorbitantly priced.
 
COMPARISION WITH LISTED PEERS:
As per offer documents, NRIL has no listed peers to compare with.
 
MERCHANT BANKER'S TRACK RECORD:
On merchant banker's front, this is the 38th mandate from its stable in the last three fiscals including the ongoing one. Out of last 10 listings, 2 opened at discount and the rest with premiums ranging from 0.02% to 2.00% on the day of listing. Thus it has average track records.


Conclusion / Investment Strategy

Financial performance so far has been lacklustre. Company is planning to redeem preference shares of promoters and arrange security deposits for the premises from the new investors' money with exorbitantly priced IPO. Post issue paid-up equity indicates long gestation for mainboard migration. LM has an average track record. Simply stay away from this high priced offer.

Reviewer recommends Avoid to the issue.

Review By Dilip Davda on Mar 27, 2020

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 prior to making any actual investment decisions, based on information published here. With entry barriers, SEBI wants only well informed investors to participate is such offers. With crazy recent listings, SME IPOs have started drawing attention of investors across the board. However, as SME issues have entry barriers and continued low preference from broking community, any reader taking decisions based on any information published here does so entirely at own risk. Investors should bear in mind that any investment in stock markets are subject to unpredictable market related risks. Above information is based on information available as on date coupled with market perceptions. Author has no plans to invest in this offer.

(SEBI registered Research Analyst-Mumbai).


About Dilip Davda

Dilip Davda, a freelance journalist

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

Nirmitee Robotics IPO FAQs

  1. 1. Why Nirmitee Robotics IPO?

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

  2. 2. How is Nirmitee Robotics IPO?

    Read the Nirmitee Robotics IPO recommendations by the leading analyst and leading stock brokers.

  3. 3. Nirmitee Robotics IPO what should investors do?

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

  4. 4. Is Nirmitee Robotics IPO good?

    Our recommendation for Nirmitee Robotics IPO is to avoid.

  5. 5. Is Nirmitee Robotics IPO worth Investing?

    As per the analysis by our lead analyst Mr. Dilip Davda, we suggest you to avoid the Nirmitee Robotics IPO.

  6. 6. When will Nirmitee Robotics IPO allotment status?

    The Nirmitee Robotics IPO allotment status will be available on or around Apr 16, 2020. The allotted shares will be credited in demat account by Apr 20, 2020. Visit Nirmitee Robotics IPO allotment status to check.

  7. 7. When will Nirmitee Robotics IPO list?

    The Nirmitee Robotics IPO will list on Tuesday, April 21, 2020, at BSE SME.

Comments

No comments found. Be the first to post a comment.







Search Chittorgarh.com:

Download Our Mobile App

Android App iOS App