Rajnish Wellness Limited IPO

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(i) Rajnish Wellness Limited was originally incorporated on June 13, 2015. The company is currently engaged in the business of selling various products in the categories ranging from consumer durables to ayurvedic personal care products.

(ii) Company’s major focus area is sexual wellness, energy revitalization and personal care products. Changing lifestyle and awareness of health and wellness is increasing demand for sexual wellness and energy revitalization products. The current product portfolio is concentrated on ayurvedic products. The company is exploring the ethical market in sexual wellness and energy revitalization category. They sell  personal care products under the brand name. “PlayWin Capsules”, “PlayWin Condom”, “Rajnish Lotion”, “Rajnish Plus Lotion”, “Play Win Spray”, “PlayWin Plus Capsules”, “Playin Oil”, , “PlayWin F Capsule”, “Kasaav Powder”, “SudantaDantManjan”, “Mithohar Liquid”, “Mithohar Tablets”, “Madamrit Hair Shampoo”, “Madamrit Hair Oil”, “Madamrit Hair Capsule” and Pia Lo Herb’s.

(iii) Recently, the company newly launched Play win spray in this category. They have a competitive price advantage as compared to others competitors as they mailny operates in Tier I, Tier II and Tier III markets.

(iv) Rajnish wellness has very strong hold in Maharashtra, Uttar Pradesh, Karnataka, Bihar, Odisha, Delhi, Jharkhand, Madhya Pradesh, Uttarakhand, Haryana and West Bengal. Their products are available in all major medical stores in these states.

(v) The company runs on an asset-light model and owns all the brands under its name. Rajnish is sourcing it all products from dedicated manufacturers since inception. It has outsourced all its manufacturing needs to various suppliers who are expert in a particular product in India which enables a company to adhere to the required specifications and quality in stipulated time.

Rajnish Wellness Limited IPO Stock Quote & Charts

135.95

-4.93%

  • Open: 140.00
  • High - Low: 140.00 - 135.95
  • Previous Close: 143.00
  • Total Traded Volume: 4800
  • Updated On: 24-Sep-2018

Objects of the Rajnish Wellness Limited IPO:

Objective of

Rajnish Wellness Limited IPO

are: 1. Funding of working capital requirements of the Company. 2. Funding of Branding and Advertisement expenses 3. To meet General corporate purposes 4. To meet the expenses of the Issue

Rajnish Wellness Limited IPO Details:

Open Date: Jun 25 2018
Close Date: Jun 29 2018
Total Shares: 12,61,200
Face Value: ₹ 10 Per Equity Share
Issue Type: Fixed Price Issue
Issue Size: 11.9814 Cr.
Lot Size: 1200 Shares
Issue Price: ₹ 95 Per Equity Share
Listing At: BSE SME
Listing Date: Jul 05 2018

Promoters And Management:

Promoters of Rajnish Wellness Limited Company are: (i) Mr Rajnishkumar Surendraprasad Singh aged 32 years the Managing Director of the Company. He is Graduate from Patna University in the year 2007 and has knowledge in the field of Manufacturing of Ayurvedic Products, dealing in the e-commerce industry and in the field on an advertisement. He is having more than 9 years of experience in the area of management, marketing and administration.

Company Business:

Company's Business Model i) First , the Company Rajnish Wellness Limited buy their product from different manufacturers. (ii)Then they distribute their products to market through 50 distributors across the states like Maharasthra,Uttar Pardesh, Karnataka, Bihar, Odisha, Delhi, Jharkhand,Madhya Pradesh, Uttarakhand, Haryana and West Bengal. (iii)Finally, the product reaches to the customer through medical store. Recently they have tied up with different e-commerce companies like snapdeal.com, indiamart.com, clickoncare.com, lovenaturalremedies.com, ayurvedmart.com and fineyog.com etc. to sell their products. Risk Involves in Rajnish Wellness Limited i) The Company is operating four offices from Mumbai ( Corporate Office, Accounts Officer, Call Center and Customer Desk) from the same building on lease period ranging 2-3 years. Do not own any office till date. ii) The Company does not have any production facility of their own and same has been outsourced from third party for manufacturing their branded products. iii)The Company is using certain photographs of some person(s) on their few products for which the Company has not obtained any NOC or approval for using such photographs in their few product, any objection in this regard may affect their goodwill. iv) As on date of filing the DRHP, the company has 78 employees but all are on contract basis. v) The company advances have been shoot up to 2.61 Cr in FY18 from 48 Lacs to previous year. – Red Flag. vi) The Company’s Debtor days have gone up from 59 days in FY17 to 178 days in FY18. This may be possible that sales have been inflated before the IPO.- Red Flag. vii) As on 11FY18, the company has long term debt of 2.07 Cr and Short Term Debt of 1.85 Cr. The company does not own any office and no manufacturing unit then why company has taken long term loan was not mentioned anywhere.- Red Flag. viii) As on 11FY18, the Company has Fixed Asset of only 10 Lacs- Red Flag ix) Profit after tax has gone up from 63 Lacs in FY17 to 1.62 Cr in FY18 on flat revenue growth raises concern and it may be possible case of window dressing just before the IPO. The Company has cut down the other expense from 15 Cr in FY17 to 10 Cr in FY18 may be to inflate profit. x) The Company has issued 22,50,000 shares @Rs 10 and 1,62,500@20 via Right Issue to the promoters and their related parties in the month of Feb 2018 i.e. Just before the IPO which raises concern as the cost of acquisition was only Rs.10 and Rs 20 while IPO is coming at Rs 95. xi) The company has very limited history of 3 years as it founded only in 2015 to make out any investment strategy here.  

Capital Structure:

(i) Authorized Share Capital 70,00,000 shares at FV@10) 7 Cr
(ii) Issued, Subscribed,& Paid-up Share Capital Before Issue (34,12,500  Shares at FV@10) 3.412 Cr
(iii) Present Issue (  12,61,200 Shares at FV@10) 1.2612 Cr
(iv) Reservation for Market Maker  ( 63,600 Shares at FV@10) 6.3 Lacs
(v) Net Issue to Public 12,61,200 -63,600=  1197600 Shares) 1.197 Cr
(vi) QIB & HNI quota-5,98,800 50%
(vii) Retail Quota - 5,98,800 50%
(viii) Paid Up Share Capital after the issue 4.6732

Financials of Rajnish Wellness Limited IPO:

1. Assets and Liabilities Key Parameters
Year Asset(lacs) Liabilities(lacs) Net Worth(lacs) Book Value D/E [<1.5] RONW Receivable days
FY16 530.35 493.00 37.35 75 13.2 87% 57
FY17 837.92 736.70 101.22 202 7.3 63% 59
11MFY18 1782.44 1,261.85 520.59 15 2.4 31% 178
2. Profit n Loss Key Parameters
Year Revenue(lacs) PAT(lacs) EBITDA Margins Profit Margins Outstanding Shares(lacs EPS
FY16 1315.88 32.34 4% 2% 0.50 64.68
FY17 2529.63 63.87 5% 3% 0.50 127.74
11MFY18 2423.22 161.87 13% 7% 34.13 4.74
3. Cash Flow Statement(all figures in lacs)
Particulars FY18 FY17 FY16
(i) Net Cash Generated from Operation -301.94 -167.29 54.29
(ii) Net Cash Generated from Investment -10.81 -3.95 -2.13
(iii) Net Cash Generated from Financing Activity 333.17 131.44 5
(iv) Total[ (i)+(ii)+(iii) ] 20.42 -39.8 57.16

Comparison With Peers:

The Company does not have any peers in the market to compare.

Recommendation on Rajnish Wellness Limited IPO:

Review and Recommendation of

Rajnish Wellness Limited IPO

from our side is: Rating: 2/10. 1-5: Fair 5-7: Good 7-10: Excellent Check Next Mainline IPO => HDFC AMC IPO

Lead Manager of Rajnish Wellness Limited IPO:

  1. Navigant Corporate Advisors Limited

Registrar of Rajnish Wellness Limited IPO:

  1. Bigshare Services Private Limited

Company Address:

Rajnish Wellness Limited 610L, 6th Floor, Building No. 3, Navjivan Commercial Premises Society Limited, Lamington Road, Mumbai Central (East), Mumbai - 400 008 Phone No. + 91-22-23065555 Email: info@rajnishwellness.com Website: www.rajnishwellness.com

25th Sep 2018 - 27th Sep 2018 => Aavas Financiers IPO

Bid Details of Rajnish Wellness Limited IPO as on
29 Jun 2018 | 11:59:01 PM

Category No.of shares offered No. of shares bid
598,800 1,209,600
598,800 140,400
63,600 63,600
1,261,200 1,413,600
QIBs No
QIBs+HNIs Subscription 2.02X
Retail Subscription 0.23X
Total Subscription 1.13X

Discussion on Rajnish Wellness Limited IPO:

    As per new SEBI guidelines, the company coming up with an IPO now have to show only 3 years Financial statements in the DRHP. This will lead more companies to raise funds via IPO. However, this will have negative from the perspective of the investor as less numbers means less interpretation about the company’s performance.

    As per new SEBI guidelines, the Minimum size of anchor investor has been reduced from 10 cr to 2 cr in SME IPOs. This will lead to more participants in pre-IPO placement. This is a good move as generally the issue size of SME IPOs ranges from 5 Cr to 70 Cr.

    Always give Receivables days a due importance as it gives immense insight into the financial irregularities. As in case of Rajnish Wellness, it has gone from 56 days to 179 days . This is highly unlikely for debtor days to go 3 fold in a year in a good business.

    No business moat ,high debtors days, negligible fixed assets, all 78 employees are on contract basis, limited financial history, huge dilution of equity before the IPO, so overall a bad company to invest.

    The company founded 3 years back has come with an IPO to loot the investors.