Excellent Wires and Packaging Limited

As per financial performance, Excellent Wires and Packaging Limited has posted total income / net profits of Rs 7.29 Cr / Rs 0.05 Cr (FY22), Rs 14.48 Cr / Rs 0.10 Cr (FY23) and Rs 15.41 Cr / Rs 0.83 Cr (FY24). So as per previous financials data, company has shown good growth. But sudden rise in net-profit just before IPO raises doubts. Company has posted an average EPS of Rs 1.85 and average RoNW of 42.57% for last three fiscals. Issue is priced at a P/BV of 2.12 as per NAV of 42.51 as on post issue. If we attribute latest earnings of FY22, FY23 and FY24 on fully diluted equity post issue, then asking price is at a P/E of around 850, 386 and 48.48 respectively, which looks aggressively priced. As per RHP, comparison between listed peers is shown in above table. On BRLM's front, Inventure Merchant Banker Services Private Limited is associated with this SME IPO and handled 11 IPOs in last 4 years. From last 10 IPOs, three opened below issue price and remaining opened above issue price or at par on the day of listing. As of now from last 10 IPOs, eight are trading below issue price and remaining are trading above issue price as on today. ( As on 30.08.24 ) As per financials, Excellent Wires and Packaging Limited has shown good results, RoNW is 20.9% and P/E is respectively 850, 386 and 48.48 as per FY22, FY23 and FY24 earnings. So, issue looks aggressively priced and sudden rise in net-profit just before IPO raises doubts. Company is in business of manufacturing various types of wires, which is highly fragmented and competitive business segment. Performance of BRLM is very poor post listing. So, we give AVOID rating for this IPO. Readers must consult a qualified financial advisor prior to making any actual investment decisions.

• 1 Bhavya Vasant Shah
• 2 Rachit Paresh Masalia
• 3 Darshil Hasmukh Shah