Silly Monks Entertainment Ltd

Started in 2013, Silly Monks Entertainment Ltd is Hyderabad based Entertainment & Media Company with main focus in Digital Media Publishing. Company publishes the digital content on various platforms such as YouTube, Facebook, Amazon, Vuclip etc. The contents that are being published are either created by the company or acquired through outright purchase or through syndicated method. In case of content which is bought by the company, company own the copy rights of the content through an agreement with assignor and hence the publishing revenue is fully accrued to us. When the content is through syndication, company share the revenue with the content partner. The company is also engaged in movie/content production, celebrity's social media management, App development, Audio content Distribution, Google Ad word and online / digital Advertising, event management, and live band performances. Silly Monks Entertainment is growing its focus in movie production; wherein company has co-produced Telugu Movies named Oohalu Gusagusalade, Dikkulu Choodaku Ramayya & Tungabhadra with Vaaraahi Chalana Chitram. Company is also planning to venture into the Hindi Film industry through a co-produced venture 'The Great Indian Escape' with KIK Butt Entertainment. On financial performance front, SMEL has (on a consolidated basis) posted turnover/net profits of Rs. 3.28 cr. / Rs. –(0.03) cr. (FY 15), Rs. 4.93 cr. / Rs. 0.29 cr. (FY16) and Rs. 12.02 cr. / Rs. 1.45 cr. (FY17). For H1 of the current fiscal it has earned net profit of Rs. 0.96 crore on a turnover of Rs. 6.54 crore. For last three fiscals it has posted an average EPS of Rs. 2.67 and average RoNW of 21.08% on an equity base of Rs. 0.52 crore. Issue is priced at a P/BV of 6.88 on NAV of Rs. 17.45 as on 30.09.17 and at a P/BV of 3.24 on the basis of post issue NAV of Rs. 37. If we annualize its latest earnings and attribute it on fully diluted post issue equity, then asking price is at a P/E of around 29. It has no listed peers to compare with. Issue appears fully priced based on the given performance. On merchant banker's front, this is the 20th mandate from its stable. Out of last 10 listings, 3 opened at discount, 1 at par and the rest at a premium ranging from 0.2% to 20% on the day of listing. As per financials, company's growth is good, RoNW is 21.08% for last three fiscals and issue looks fully priced as per latest earnings. Growth of the company is good and digital media sector is in high growth phase with reach of mobile data in every part of India. So, we give NEUTRAL rating to this SME IPO.

• 1 Mr. Tekulapalli Sanjay Reddy
• 2 Mr. Anil Kumar Pallala