Shri Venkatesh Refineries Limited IPO

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The company is primarily engaged in the business of refining and preservation of Edible oils mainly soyabean oil and cottonseed oil. The business process involves the purchase of the raw oil, then refining, packaging, and selling of the edible oil.

At present, the Company has a refining capacity of almost 36000 tons. Apart from the refining of edible oil, we are also engaged in the business of trading edible oil mainly soyabean oil, cottonseed oil, and palm oil.

It is one of the growing companies engaged in the refining of edible oil in the Maharashtra region selling the edible oil under the brand name “Rich Soya”.

Company’s Product –
a) Refining of crude Edible oil to produce refined
Soyabean Oil
Cotton Seed Oil

b) Trading of crude Edible and refined oil
Soyabean Oil
Cotton Seed Oil
Palm Oil
Sunflower Oil

Competitive Strengths
i.
Distribution network
ii. Quality of products
iii. Brand Image

Objects of the Shri Venkatesh Refineries Limited IPO:

The company intends to utilize the proceeds of the Issue to meet the following objects: 1. To meet Working Capital requirements 2. General Corporate Purpose 3. To meet issue expenses

Shri Venkatesh Refineries Limited IPO Details:

Open Date: Sep 29 2021
Close Date: Oct 01 2021
Total Shares: 2,928,000
Face Value: ₹ 10 Per Equity Share
Issue Type: Fixed Price Issue
Issue Size: 11.71 Cr.
Lot Size: 3000 Shares
Issue Price: ₹ 40 Per Equity Share
Listing At: BSE SME

Promoters And Management:

i. Mr. Anil Ganpati Kabre, aged 69 years, is the Promoter and Whole Time Director of the company. He has been associated with the Company since incorporation and has been designated as Whole Time Director w.e.f. January 01, 2021. He has completed his Master of Science from the University of Bombay. He holds an experience of more than 35 years in the line of Refining Oil and Manufacturing line of business. He is the backbone and decision-maker of the two most crucial departments of the company viz. Operation and Domestic Marketing. He has been closely involved in Strategy Formulation, Refinery Operations, Major Projects Implementation, etc. ii. Mr. Shantanu Ramesh Kabre, aged 57 years is the Promoter and Whole Time Director of the company. He has been appointed as a director on August 01, 2018, and has been designated as Whole Time Director w.e.f. January 01, 2021. He has completed his Bachelor of Commerce from the University of Poona, Ganeshkhind, Pune. He has experience of more than 25 years in the line of Refining Oil. His overall responsibility spans the Edible Oil Refining and Marketing Business, Oil Manufacturing, and several corporate functions of the company including Human Resources Management, Information Technology, Research & Technology, and Projects Execution. iii. Mr. Prasad Dinesh Kabre, aged 31 Years is the Promoter and Whole Time Director of our company. He has been appointed as a director on August 01, 2018, and has been designated as Whole Time Director w.e.f. January 01, 2020. He has been also appointed as CFO of the Company. He has completed his Master of Business Administration from the University of Pune. He is responsible for managing the affairs of the Company. He overlooks the working department heads of Finance and marketing. He ensures timely approvals and the formation of financial strategies and budgets along with their review. Prasad Kabre has experience of more than 3 years in the line of oil, refining, and ginning and pressing business. Presently, He is engaged in the day-to-day activity of banking, government department-related issues. He has been closely involved in Strategy Formulation, Refinery Operations, financial strategies, and Stakeholder relationships.

Financials of Shri Venkatesh Refineries Limited IPO:

Particulars (in Lakhs) Mar 20 Mar 19
Revenue from operations 23,542.44 22,684.05
Purchase of Material 23,521.08 22,381.33
Cost of Materials Consumed -1,104.10 -625.07
Employee Benifit Expense 33.28 25.60
Other expenses 354.28 385.99
Operating Profit 737.90 516.20
OPM% 3.13% 2.28%
Other income 9.33 14.82
Finance costs 393.38 301.85
Depreciation and amortisation 54.44 43.24
Profit before tax 299.42 185.92
Profit for the year 220.75 126.05

Comparison With Peers:

1. Gokul Agro Resources Ltd Revenue (2021) = 8383 Crores PAT (2021) = 45 Crores OPM = 2% RONW = 15% P/E =9x 2. BCL Industries Ltd Revenue (2021) = 1421 Crores PAT (2021) = 45 Crores OPM = 6% RONW = 16% P/E =10.8x 3. Vijay Solvex Ltd Revenue (2021) = 2070 Crores PAT (2021) = 67 Crores OPM = 4% RONW = 36% P/E =9.40x 4. Ajanta Soya Ltd Revenue (2021) = 931 Crores PAT (2021) = 25 Crores OPM = 4% RONW = 35% P/E =5x

Recommendation on Shri Venkatesh Refineries Limited IPO:

Review and Recommendation of Shri Venkatesh Refineries Limited IPO by InvestorZone is 4/10 1. Company has excellent revenue growth from 133 Crores in FY19 to 235 Crores in FY21... 2. PAT has grown from 58 lakh to 220 lakh. 3. Asking P/E is 20x.  This is the problem. All the big players and peers of the company are trading between 5x to 10x multiple.

Lead Manager of Shri Venkatesh Refineries Limited IPO:

  1. Hem Securities Limited

Registrar of Shri Venkatesh Refineries Limited IPO:

  1. Purva Sharegistry India Private Limited

Discussion on Shri Venkatesh Refineries Limited IPO:

2 Comments

    Peers Comparisons:

    1. Gokul Agro Resources Ltd

    Revenue (2021) = 8383 Crores
    PAT (2021) = 45 Crores
    OPM = 2%
    RONW = 15%
    P/E =9x

    2. BCL Industries Ltd

    Revenue (2021) = 1421 Crores
    PAT (2021) = 45 Crores
    OPM = 6%
    RONW = 16%
    P/E =10.8x

    3. Vijay Solvex Ltd

    Revenue (2021) = 2070 Crores
    PAT (2021) = 67 Crores
    OPM = 4%
    RONW = 36%
    P/E =9.40x

    4. Ajanta Soya Ltd

    Revenue (2021) = 931 Crores
    PAT (2021) = 25 Crores
    OPM = 4%
    RONW = 35%
    P/E =5x

    Outstanding shares before IPO = 81,31,664

    New shares to be issued in IPO = 32,00,000

    Total Shares after IPO = 11,331,664

    PAT = 220,00,000

    EPS = 1.94

    Issue Price = 40

    P/E = 20x…

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