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.
are:
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
Company Business:
(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.
Capital Structure:
(i) Authorized Share Capital
(2,50,00,000 shares at FV@10)
25 Cr
(ii) Issued, Subscribed,& Paid-up Share Capital Before Issue
(2,21,20,000 Shares at FV@10)
22.12 Cr
(iii) Present Issue
( 76,88,000 Shares at FV@10)
7.688 Cr
(iv) Fresh Issue of 18,88,000 Equity Shares
1.88 Cr
(v) OFS of 58,00,000 Equity Shares
5.8 Cr
(vi) Reservation for Market Maker ( 3,92,000 Shares at FV@10)
39.2 Lacs
(vii) Net Issue to Public
(76,88,000-3,92,000= 72,96,000 Shares)
7.296 Cr
(viii) QIB & HNI quota-36,48,000
50%
(ix) Retail Quota - 36,48,000
50%
(x) Paid Up Share Capital after the issue
24 Cr
Financials of Suumaya Lifestyle Limited IPO:
1. Assets and Liabilities Key Parameters
Year
Asset(Cr)
Net Worth(Cr)
Book Value
D/E
ROE
Receivable days
FY13
11.56
11.53
99
0
NA
0
FY14
22.01
21.95
9.97
0
1.02%
203 days
FY15
31.08
22.59
10
0.37
0.22%
99 days
FY16
27.16
22.91
10.35
0.18
1.40%
66 days
FY17
33.19
23.62
10.67
0.41
1.90%
39 days
6MFY18
53.67
24.87
11.24
1.15
6.00%
58 days
Post Issue
28.27
11.78
1.01
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)
Particulars
FY17
FY16
FY15
FY14
FY13
(i) Net Cash Generated from Operation
11.69
-304.85
-56.15
-1868.4
2.09
(ii) Net Cash Generated from Investment
-2.67
0
-1.2
1145.89
-1100
(iii) Net Cash Generated from Financing Activity
-0.03
0
59.43
1030.05
1098.32
(iv) Total[ (i)+(ii)+(iii) ]
8.99
-304.85
2.08
307.54
0.41
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:
Company Name
Face Value
EPS
PE Ratio
RoNW
NAV
Suumaya Lifestyle Limited
10
1.25
4.44
6.00%
11.78%
Jet Knitwears Ltd
10
1.9
29.3
44.80%
8.3
Manomay Tex India Ltd
10
1.8
28
20.50%
8.2
Ashapura Intimates Fashion Ltd
10
8.1
68.1
21.30%
18.8
Recommendation on Suumaya Lifestyle Limited IPO:
Review and Recommendation of
Suumaya Lifestyle Limited IPO
from our side is:
Rating: 2/10.
1-5: Fair
5-7: Good
7-10: Excellent
.
Suumaya Lifestyle Limited
Gala No.5F/D, Malad Industrial Units,
Coop Soc Ltd, Kachpada, Ramchandra Lane Extension,
Malad (W), Mumbai – 400 064, Maharashtra, India
Phone No. 022-49712096
E-mail: info@suumayalifestyle.com;
Bid Details of Suumaya Lifestyle Limited IPO as on
25-May-2018 18:00:00 IST
Category
No.of shares offered
No. of shares bid
3,648,000
5,440,000
3,648,000
5,104,000
392,000
392,000
7,688,000
10,936,000
QIBs
No
QIBs+HNIs Subscription
1.49X
Retail Subscription
1.40X
Total Subscription
1.45X
Discussion on Suumaya Lifestyle Limited IPO:
5 Comments
The business of the company is highly competitive and very less entry barrier. I dont like such companies where entry barrier are less. Apart from this Return on Equities is miserably low. So i will not put my money into this.
As per DRHP, the company in past has failed to file proper returns , not complied with certain provisions of Company Act 2013 and has attached inappropriate name of allottes in the Return of Allotment filed in the e-form 2 ,shown wrong list of shareholders while issuing bonus in 2013. Such mistakes may be subjected to penalties in future and shows callous approach of management in dealing with regulatory authorities.
The Company has an exceptional earning in the first 6 months of FY18, where they have posted a PAT of nearly 1.5 Cr, if we annualized this earning for the whole year it comes out to be 3 Cr and on the basis of this P/E looks reasonable. However, if we take the earnings of FY17 then the P/E is nearly 85 which is quite high.
Textile Sector was exempted under Central and State Tax Regime but introduction of GST will increase their raw material cost which in turns may affect their margins and profitability in coming years.
In the past, the Company has not complied with the certain provisions of the Companies Act which is quite serious issue of Corporate Governance from the part of Company.
• MGT-14 for the approval of account for the financial year ended on March 31, 2016.
• MGT-14 for the approval of Director’s Report for the financial year ended on March 31, 2015.
• MGT-14 for the appointment of Internal Auditor and Secretarial Auditor.
• MGT-14 for the approval of the half year ended on September 30, 2014.
• Form 23 for resolutions passed for issue of shares etc. during the period from 2011 to 2014
• MGT-14 for noting of disclosure of interest during 2014.
The business of the company is highly competitive and very less entry barrier. I dont like such companies where entry barrier are less. Apart from this Return on Equities is miserably low. So i will not put my money into this.
As per DRHP, the company in past has failed to file proper returns , not complied with certain provisions of Company Act 2013 and has attached inappropriate name of allottes in the Return of Allotment filed in the e-form 2 ,shown wrong list of shareholders while issuing bonus in 2013. Such mistakes may be subjected to penalties in future and shows callous approach of management in dealing with regulatory authorities.
The Company has an exceptional earning in the first 6 months of FY18, where they have posted a PAT of nearly 1.5 Cr, if we annualized this earning for the whole year it comes out to be 3 Cr and on the basis of this P/E looks reasonable. However, if we take the earnings of FY17 then the P/E is nearly 85 which is quite high.
Textile Sector was exempted under Central and State Tax Regime but introduction of GST will increase their raw material cost which in turns may affect their margins and profitability in coming years.
In the past, the Company has not complied with the certain provisions of the Companies Act which is quite serious issue of Corporate Governance from the part of Company.
• MGT-14 for the approval of account for the financial year ended on March 31, 2016.
• MGT-14 for the approval of Director’s Report for the financial year ended on March 31, 2015.
• MGT-14 for the appointment of Internal Auditor and Secretarial Auditor.
• MGT-14 for the approval of the half year ended on September 30, 2014.
• Form 23 for resolutions passed for issue of shares etc. during the period from 2011 to 2014
• MGT-14 for noting of disclosure of interest during 2014.