Parshva Enterprises Limited IPO

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(i) The company mainly engaged in the wholesale supply and trading of precious stones, primarily cut and polished diamonds. They also deal in gold jewelry. They sell products to their clients domestically. They are located in Mumbai, which is an established jewelry market which gives us an added advantage in terms of procurement.

(ii) They deal in a variety of diamonds which include both rough and polished diamonds. They buy and sell diamonds in local markets as per the demand. They also sell diamonds of multiple categories based on different shapes, size, cut and fancy color. They mainly deal in diamonds of 0.10 – 5.0 carats. Well-cut diamonds sell at a premium and poorly cut diamonds sell at comparatively cheaper prices.

(iii) They are also engaged in the gold jewelry business. They primarily sell gold jewelry i.e. Chains, Bangles, Necklace, Pendant, Bracelet, Earrings and other jewelry studded or non-studded with pearls, diamonds, and other precious stones. They offer Jewellery across different price ranges from low to high to cater to the customer base.

(iv) They are also engaged in investment in real estate properties in Mumbai for the purpose of selling them for trading gains. In the real estate business, they are focused on Maharashtra and Gujarat. They invest in both residential and commercial properties based on their own study of the market. They are also involved in real estate broking.

IZ View

The company is involved in trading of gold and Diamond jewelry and real estate business. There is no moat in the business. Anyone with knowledge of Jewelry can start this business. The sector is very competitive. In Mumbai and Gujarat, you can find jewelry shops in every nook and corner. The PAT margins for FY19 are around 4.20% which shows this is low margin business.

This as a sector has not given good returns to investors in the past barring Titan.

Objects of the Parshva Enterprises Limited IPO:

The objects of the Net Proceeds (as defined below) of the Issue are: Meeting Additional Working Capital Requirements= 3.65 Cr.

Parshva Enterprises Limited IPO Details:

Open Date: Jun 19 2019
Close Date: Jun 21 2019
Total Shares: 8,10,000
Face Value: ₹ 10 Per Equity Share
Issue Type: Fixed Price
Issue Size: 3.65 Cr.
Lot Size: 3000 Shares
Issue Price: ₹ 45 Per Equity Share
Listing At: BSE SME
Listing Date: Jul 01 2019

Promoters And Management:

1. Prashant A. Vora, aged 49 years, is a Promoter and Managing Director of our Company. He has been associated with our Company since incorporation and has been designated as Managing Director w.e.f. April 1, 2019. He is an under graduate. He has experience of over 10 years in trading and distribution business, equity investments and real estate and over 2 years of experience in gems and jewelry business. 2. Harsh P. Vora, aged 19 years, is a Non-Executive Director of our Company. He is a second-generation entrepreneur. He joined our Company since incorporation. He assists our Managing Director in the gems and jewelry business. He is also pursuing is B.Com course. He has experience of over a year in the gems and jewelry sector.

Financials of Parshva Enterprises Limited IPO:

The company has given Full year financials for FY19 only. So lets us see how it fares up in last one year. 1. Revenue= 7.13 Cr 2. EBITDA Margins = 6% 3. PAT Margins = 4% 4. EPS(Post Issue)= 1 5. P/E= 45

Recommendation on Parshva Enterprises Limited IPO:

Review and Recommendation of Parshva Enterprises Limited IPO from IZ Team are 1/10. [ The Jewelry sector is not a flavor sector even for highly reputed companies. The asking P/E of 45. We don't how LM have come with such a valuation and thinking the market will give a thumbs up to the issue.]

Lead Manager of Parshva Enterprises Limited IPO:

  1. Inventure Merchant Banker Services Private Limited

Registrar of Parshva Enterprises Limited IPO:

  1. Bigshare Services Private Limited

Bid Details of Parshva Enterprises Limited IPO as on
21 Jun 2019 | 11:54:03 PM

Category No.of shares offered No. of shares bid
384,000 633,000
384,000 285,000
42,000 42,000
810,000 960,000
QIBs+HNIs Subscription 1.65X
Retail Subscription 0.74X
Total Subscription 1.20X

Discussion on Parshva Enterprises Limited IPO:

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