Mr. Arvind Kantilal Shah aged 76 years is Promoter and Chairman cum Managing Director of the Company. Originally, he was appointed as a director since the incorporation of the company, i.e., since September 01, 1987 and his designation was changed to Chairman cum Managing Director, liable to retire by rotation for a period of five years w.e.f. April 05, 2023. He is having experience of more than 50 years in Barge Hiring Industry, 15 years of experience in construction industry as well as experience in manufacturing and dealing of food and vegetation for more than 45 years. He has been instrumental in taking major policy decision of the Company and also in leading the Company. He is playing vital role in formulating business strategies and effective implementation of the same. He has been instrumental in taking major policy decision of the Company and also in leading the Company. He is playing vital role in formulating business strategies and effective implementation of the same. Mr. Vinit Arvind Shah aged 45 years is a Promoter and Whole Time Director of the Company. Originally, he was appointed as Executive Director (Promoter Category) w.e.f. November 01, 2020 and his designation was changed to Whole Time Director, liable to retire by rotation, w.e.f. April 05, 2023 for a period of 5 years. He has completed his Master of Business Administration in International Management in the year 2001 from Monterey Institute of International Studies. He is having experience of more than 15 years in stevedoring and shipping industry as well as 15 years of experience in construction industry. He has experience in cargo handling, port activities, financial functions & operational efficiency, with short term strategy to manage business operation in shipping industry. Mr. Piyush Chimanlal Vora aged 67 years was appointed as an Executive Director of the Company w.e.f. April 01, 1998. Subsequently, his designation was changed to Non-Executive Director w.e.f. March 25, 2023. He has completed his Bachelor in Law (General) from Saurashtra University in the year 1980 and Degree in Bachelor in Commerce in the year 1980, and subsequently he has completed his Bachelor in Law (Special) from Saurashtra University in the year 1989. He has also completed examination for Custom Housing Agent in year 2008. He is having more than 30 years of experience in manufacturing and dealing of food and vegetation as well as shipping and marine industry.

 

Particulars ( In Lakhs )	2021	2022	2023
Revenue from Operations	36	257	711
Other Income	17	74	130
Total Revenue	53	331	841
Employee benefits expenses	8	7	16
Other Expenses	4	72	37
EBITDA	41	253	788
Depreciation & Amortisation	23	75	206
Finance Cost	4	41	102
EBIT	17	178	582
OPM (%)	77.85%	76.27%	93.65%
PBT	13	138	481
Tax	-10	37	133
PAT	24	100	347
NPM (%)	45.23%	30.26%	41.27%
No.of Shares	121.37	121.37	121.37
EPS	0.19	0.82	2.85

Note: - There is no listed companies related to this company.

Review and Recommendation of Arvind and Company Shipping Agencies SME IPO by IZ team is 3/10

A) Company Overview

Arvind and Company Shipping Agencies is a barge service provider. Their primary revenue streams come from renting out their fleet of five barges. These barges are primarily leased to construction companies who need to transport heavy equipment, materials, and personnel to and from construction sites located near bodies of water. Barges are crucial for tasks like port construction, maintenance, dredging, and materials handling in waterways. They are usually towed or pushed by tugboats.

B) Financial Performance

The company has shown remarkable financial growth, with revenues increasing from INR 36 lakhs in FY21 to INR 3 crores in FY23. Notably, the company boasts high EBITDA and PAT margins, 93% and 41% respectively in FY23, which can be attributed to the low operating costs associated with a rental-based, asset-heavy business model.

C) Use of IPO Funds

The company aims to raise INR 12 crores through its IPO, which is primarily targeted for the acquisition of additional barges to facilitate growth.

D) Valuation

The company is entering the market with a P/E ratio of 16x and a market capitalization of INR 54 crores. At first glance, the company appears to be fully priced in.

E) Diversification

In addition to their core business, the company also owns two hotels, which have started to contribute to their income as of FY23.

F) Sectoral Growth and Risks

It's crucial to understand the growth potential and risks associated with the barge sector in India, especially since this type of business has rarely been listed in the SME sector.

G) Growth

a) Infrastructure Development: India is increasingly focusing on infrastructural development, including ports and waterways, which will drive demand for barges. b) Coastal Shipping: The Government of India is promoting coastal shipping as a cost-effective and eco-friendly mode of transportation, which can be a boost for barge operators.

H) Risks

a) Capital Intensive: The business is asset-heavy, requiring continuous investment in barges for growth. b) Regulatory Risks: Being part of the shipping and construction industry, the company has to adhere to multiple regulations, non-compliance with which can lead to severe penalties. c) Seasonal Variations: The barge business can be affected by seasonal factors like monsoons, affecting operational efficiency. d) Competition: With increasing focus on waterways, competition is likely to intensify, which could put pressure on rental rates.

Conclusion

Arvind and Company Shipping Agencies seems to have strong financials and a robust business model. However, understanding the growth trajectory of the barge sector in India and the associated risks is crucial before making an investment decision, especially given the relatively unexplored nature of this business in the SME listing space.

Arvind and Company Shipping Agencies Limited City point 701 to 702 Fifth Floor, Nr. Town Hall Jamnagar 361001 Phone: +919913411144 Email: info@arvindshipping.com Website: https://www.arvindshipping.com/