Suumaya Lifestyle LimitedIPO
(i) In the year 2011, initially Company was engaged into real-estate business and was listed into ITP segment and the current management with experience of around 30 years into the textile business started dealing in cotton and other fabrics used in the manufacturing of women apparels.
(ii) On April 16, 2017, Suumaya Fashions was acquired by Richway International Trade Limited, Pursuant to the business transfer agreement between Suumaya Fashions, a proprietary firm of Mr. Ushik Gala and Suumaya Lifestyle Limited (Formerly known as Richway International Trade Limited).The Company acquired assets and liabilities of Suumaya Fashions and all the manufacturing operations were consolidated in the Company. Suumaya Fashions was earlier engaged in the business of manufacturing and trading of dress materials, suits, sarees, kurtis, garments for men, women and kids including daily wear, wearing apparels, party wears, uniforms, sportswear, active wears, inner wear, purses, belts, wallets and other allied goods made from cotton, denim, silk, synthetics, jute, velvet, woollen, leather or with any combination thereof.
(iii)The company is being promoted by Ms. Ishita Gala and India credit risk management LLP. Her industry knowledge and understanding also gives company the key competitive advantage enabling them to expand their geographical and customer presence in existing as well as target markets, while exploring new growth avenues.
(iv) The Company markets products under the brand name “ekka”, “ira” and “tag 9”. They are both in a retail and wholesale business where they provide their designs and satisfy their customers.
Offer for sale 58,00,000 EQUITY SHARES
(i) The Rangoli Tradecomm Private Limited Company is completely exiting from the company by selling 58,00,000 Equity Shares which was issued to it in the month of May 2014 at an average Price of Rs.10.10.
Fresh Issue of 18,88,000 EQUITY SHARES
(ii) Funding working capital requirements
Promoters of Suumaya Lifestyle Limited Company are:
(i) Ms. Ishita Mahesh Gala, she has over two years of work experience in textile industry. She is currently responsible for entire operations of the Company including strategic initiatives of our business.
(ii) Indiacredit Risk Management LLP
(i) They basically procure the raw material & fabric from suppliers.
(ii) Then Company’s designer develops new styles, fits, finishes to meet the latest fashion trends and then sent to production house for manufacturing. During season, the designer team works on over several designs, out of which a few are picked up to constitute the new season collection. Apart from manufacturing the company is also involved in trading of dress materials, suits, sarees, and kurtis.
(iii) Finally, the quality officers go to the factory to finally give their approval by inspecting the quality, checking for regulatory compliance, measurements and finally packaging of the order.
(i) Authorized Share Capital
(2,50,00,000 shares at FV@10)
(ii) Issued, Subscribed,& Paid-up Share Capital Before Issue
(2,21,20,000 Shares at FV@10)
(iii) Present Issue
( 76,88,000 Shares at FV@10)
(iv) Fresh Issue of 18,88,000 Equity Shares
(v) OFS of 58,00,000 Equity Shares
(vi) Reservation for Market Maker ( 3,92,000 Shares at FV@10)
(vii) Net Issue to Public
(76,88,000-3,92,000= 72,96,000 Shares)
(viii) QIB & HNI quota-36,48,000
(ix) Retail Quota - 36,48,000
(x) Paid Up Share Capital after the issue
Financials of Suumaya Lifestyle Limited IPO as per DRHP:
1. Assets and Liabilities Key Parameters
Note: The Company has poor ROE as compare to its peers and varying & High receivable days is a cause of concern.
2. Profit n Loss Key Parameters
(i) The Reveune of the company in last 5 years ( FY13 to 6MFY18) is .65 Lacs, 15.47 Cr, 37.15 Cr, 90.53 Cr, 212.05 and 107.78 Cr respectively. The Company is growing at a CAGR of 93.08%.[ Excellent].
(ii) The PAT of the company in last 5 years ( FY13 to 6MFY18) is (1.41) Lacs, 11.87 Lacs, 4.98 Lacs, 31.77 Lacs, 44.91 Lacs and 1.50 Cr respectively. The company's PAT has increased 3x in 6MFY18[ just before IPO] as compared to FY17 on almost flat revenue is raising concern.
(iii) The EBITDA Margins of the company for FY14( 1.11%), FY15(.42%), FY16(.50%) ,FY17(.31%) and 6MFY18(2.02%) . The sudden rise of margins in 6MFY18 is doubtful.
(iv) P/B(post issue)= 1.53 (at cutoff price of 18).
(v) Annualized EPS of 6MFY18(post issue)= 1.25
(vi) Annualized P/E(post issue)=14.44 at the cutoff price of 18.
3. Cash Flow Statement(all figures in Lacs)
(i) Net Cash Generated from Operation
(ii) Net Cash Generated from Investment
(iii) Net Cash Generated from Financing Activity
(iv) Total[ (i)+(ii)+(iii) ]
Note- The Company has negative Cash flows from operations in FY14, FY15 and FY16 due to high Trade Receivables in those years. The Trade Receivables are increasing every year which is cause of concern. Any default in the payment of these receivables may affect company growth in the future.
Comparison With Peers:
Suumaya Lifestyle Limited
Jet Knitwears Ltd
Manomay Tex India Ltd
Ashapura Intimates Fashion Ltd
Recommendation on Suumaya Lifestyle Limited IPO:
Review and Recommendation of
Suumaya Lifestyle Limited IPO
from our side is: