Vaidya Sane Ayurved Laboratories Limited

Vaidya Sane Ayurved Laboratories Limited is a medical service institution that strives to treat chronic ailments like cardiac disease, diabetes, hypertension and obesity with the distinctive outlook of amalgamating technology with traditional healing of Ayurveda. It use non-invasive, multidisciplinary and innovative therapies which has helped establish them as a dependable option for treating the chronic ailments. They are a health care provider primarily in the India's chronic care ecosystem. They provide their healthcare services through Madhavbaug clinics. As on November 30, 2021, they operate 274 clinics across Maharashtra, Madhya Pradesh, Gujarat, Uttar Pradesh, Goa, Karnataka, Delhi and Chhattisgarh. Out of these 52 are company owned and 222 are franchise clinics. The Company also operate two cardiac prevention and rehabilitation hospitals in Khopoli and Nagpur respectively. Vaidya Sane's Ayurvedic Education And Agricultural Research Trust is providing non invasive medical services through the Khopoli Hospital. The company has entered into MOU dated April 1, 2019 with Vaidya Sane's Ayurvedic Education And Agricultural Research Trust for the entire management, medical services and treatments being carried out at Khopoli Hospital. In consideration the trust shall pay their Company 80% of the total fees / amount received by it under this arrangement on monthly basis after providing for all reasonable expenses and applicable taxes. As per financial performance, Madhavbaug has posted total income/net profits of Rs 62.56 Cr / Rs 0.49 Cr (FY19), Rs 75.29 Cr / Rs (0.55) Cr (FY20), Rs 52.28 Cr / Rs 1.54 Cr (FY21) and Rs 31.56 Cr / Rs 1.35 Cr (FY22). So company has shown zigzag results over last couple of years. Company has posted an average EPS of Rs 0.96 and average RoNW of 6.60% for last three fiscals. Issue is priced at a P/B of 2.24 as per NAV of Rs 32.59 post issue. As Per FY21 earnings on fully diluted equity post issue, asking price is at P/E of around 49.61 and as per annualised FY22 earnings P/E is 28.34. As per RHP there are no listed peers.     On BRLM's front, First Overseas Capital Limited associated with this SME IPO and handled 10 IPOs in last 3 years. From last 10 IPOs, three opened below issue price and remaining above issue price or at par. As of now from last 10 IPOs, five are trading below and remaining are trading above issue price or at par. ( As on 02.02.22 ) As per financials, VSAL has shown zigzag results, RoNW is 15.84% and P/E is respectively 50 and 28 as per FY21 and annualised FY22 earnings, which looks aggressively priced. Performance of BRLM is poor post listing. So we are giving AVOID rating to this IPO.

• 1 Dr. Rohit Madhav Sane