Parshva Enterprises Limited

Started in 2017, Mumbai-based Parshva Enterprises Limited is engaged in trading and wholesale business of cut & polished diamonds and gold jewellery. They buy and sell diamonds of different categories depending on fancy colour, size, shape and cut (princess-cut, heart-cut, etc.). The price of the diamond is decided based on the size and cut evaluation like poorly cut diamonds are sold at cheaper price whereas well-cut are at a premium price. They deal with natural diamonds and some of the diamonds are GIA certified as well. The company sells out diamonds to domestic clients only. In gold jewellery, Parshva Enterprises sells out gold necklaces, bangles, earrings, pendants, chains, and earrings which can be non-studded or studded with stones, diamonds, and pearls.. Apart from this, the company also invest in real estate properties in Gujarat and Mumbai area and sells them for the trading gains. They are also involved in real estate broking business to deal with apartments and properties.. The competitive strengths of the company are: 1. Multiple product range2. Good quality products3. Market-specific products On the financial performance front, Parshva Enterprises has posted turnover/net profits of Rs. 4.77 cr. / Rs. 0.04 cr. (FY18) and Rs. 7.13 cr. / Rs 0.30 cr. (FY19). Company has been formed recently, so very limited financial data is available. Salary of MD has been fixed Rs 24 lakhs per annum and that is around net profit of FY19. The issue is priced at a P/BV of 1.97 on the basis of its NAV of Rs. 22.75 post issue. As per latest earnings of FY19 asking price is at P/E of 45.09, so issue appears very highly priced. As per RHP, listed peers are shown in above table, but it can't be strictly comparable.  On BRLM's front, for Inventure Merchant Banker Services Pvt Ltd this is the 8th IPO in last three fiscals and from last 7 IPOs, two opened below issue price and remaining opened above issue price with 1% to 20% premium on the day of listing. As of now, from last 7 IPOs, four are trading below issue price and remaining above issue price. ( As on 14.06.19 ) Very limited financial data is available, RoNW is 9.38% and issue looks very highly priced with respect to latest earnings with P/E of 45. Performance of BRLM is average, So we give AVOID rating to this SME IPO.

• 1 Mr. Prashant A Vora