Salasar Exteriors and Contour Limited IPO

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(i) The company plans, researches, coordinates & execute, and manages interior design projects. The Company is into a multifaceted profession that includes conceptual development, space planning, site inspections, programming, research, communicating with the Teams of a project, construction management, and execution as per planning.

(ii) The Company is well recognized and award-winning for Interior and Exterior Work with expertise in corporate offices, Commercials, Budget Hotels, Residential, Hospitals, Hostels, Departmental stores, and Healthcare projects.

(iii) Based in Mumbai, M/s. Salasar Exteriors (Sole Proprietorship Concern) was formed in the year 2006 and was run and managed by Mr. Shreekishan Joshi, who is known as a prominent expert in the industry possessing a wide experience of more than a decade in the field of interiors and exterior designs and civil works.

(iv) They undertake projects on turnkey basis where they are involved right from creation of the structure to implementation of plans along with installation and providing of other allied interior finishing, furniture mechanical, electrical, plumbing (MEP) and services.

(v) The Company is one of the esteemed facilitators of Walmart which has recently entered into India.

They are engaged into execution and carving out of Departmental Stores for Walmart and have already completed 3 (three) stores in Bhopal, Amravati and Aurangabad and work in progress at INDORE & NIZAMABAD.

They are still bidding for obtaining the contracts for further designing and construction of departmental stores for the foreign retail giant and positively expect to complete a mark of atleast 10 (Ten) more stores.

Objects of the Salasar Exteriors and Contour Limited IPO:

The object of the offer to raise 8.50 Cr in IPO is mentioned below. 1. To Meet Working Capital Requirement = 6.2960 Cr 2. Public Issue Expenses  = 50 Lakh 3. General Corporate Expenses = 1.70  Cr

Salasar Exteriors and Contour Limited IPO Details:

Open Date: Aug 28 2019
Close Date: Sep 03 2019
Total Shares: 2,360,000
Face Value: ₹ 10 Per Equity Share
Issue Type: Fixed price
Issue Size: 8.50 Cr.
Lot Size: 3000 Shares
Issue Price: ₹ 36 Per Equity Share
Listing At: NSE Emerge
Listing Date: Sep 11 2019

Promoters And Management:

1. Mr. Shreekishan Joshi, aged 54 years, is the Managing Director and Promoter of our Company. He is responsible for the overall working of our Company and is instrumental in making strategic decisions for the Company. 2. Mrs. Bhageshree Shreekishan Joshi, aged 54 years, is the Executive Director of our Company. She is a homemaker and belongs to the Promoter Group. Mrs. Joshi is B.Com from the University of Mumbai.

Financials of Salasar Exteriors and Contour Limited IPO:

A) As the company is recently formed after conversion from proprietorship firm, so only 11 M Financials i.e. 9th March 2018 to 28th February 2019, are audited. 1. Revenue = 41.62 Cr 2. EBITDA= 2.67 Cr 3. EBITDA Margins = 6.41% 4. PAT = 1.03 Cr 5. Equity Post IPO = 82,34,868 6. EPS= 1.25 7. P/E= 26.4 Annualized ( Looks very aggressive) B) The Company acquired the running business of M/s. Salasar Exteriors i.e. erstwhile proprietorship of our Promoter Mr. Shreekishna Joshi, vide Business Succession Agreement dated July 12, 2018, for Rs. 412.49 Lakhs. The financial performance of the proprietorship firm is mentioned below.
Year Revenue EBITDA OPM PAT NPM
2014 13.7 1.4 10.2% 0.9348 6.82%
2015 26.73 4.43 16.6% 1.28 4.79%
2016 31.38 1.31 4.2% 1.4 4.46%
2017 44.53 2.6 5.8% 1.83 4.11%
2018 52.62 2.67 5.1% 4.54 8.63%
In terms of Revenue, the firm has grown at a CAGR of 40% which is excellent. However, OPM and NPM are not stable over the years.  Moreover, the margins also do not look impressive enough.   

Comparison With Peers:

The company has shown Ahluwalia Contracts, JMC Projects, and Capacite Infra as its listed peers in the RHP. However, they are strictly not comparable. So no peer analysis has been done.

Recommendation on Salasar Exteriors and Contour Limited IPO:

Review and Recommendation of InvestorZone is:  2/10 As a firm till July 2018, the firm has grown well in terms of revenue but operational and profit margins are very low in the business. The company is recently formed and only 11-month financial data is available to study. On that basis, the company is asking a P/E of 26 post-issue which looks very aggressive in the present market condition. The fair value would have been Rs. 10-15 and not more than that.

Lead Manager of Salasar Exteriors and Contour Limited IPO:

  1. Navigant Corporate Advisors Limited

Registrar of Salasar Exteriors and Contour Limited IPO:

  1. Karvy Computershare Private Limited

Bid Details of Salasar Exteriors and Contour Limited IPO as on
03-Sep-2019 17:00:00 IST

Category No.of shares offered No. of shares bid
1,120,000 2,355,000
1,120,000 219,000
120,000 120,000
2,360,000 2,694,000
QIBs No
QIBs+HNIs Subscription 2.10X
Retail Subscription 0.20X
Total Subscription 1.15X

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