Vdeal System Limited

As per financial performance, Vdeal System Limited has posted total income / net profits of Rs 16.24 Cr / Rs 0.23 Cr (FY22), Rs 20.75 Cr / Rs 1.10 Cr (FY23) and Rs 26.25 Cr / Rs 3.11 Cr (FY24). So as per previous financials data, company has shown good results, but sudden rise in net-profit just before IPO raises doubts. Also trade receivables for FY24 is around 48%, which is very high. Company has posted an average EPS of Rs 5.99 and average RoNW of 37.16% for last three fiscals. Issue is priced at a P/BV of 2.25 as per NAV of 49.82 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 237.11, 49.75 and 17.59 respectively, which looks fully priced. As per RHP, comparison between listed peers is shown in above table. On BRLM's front, Affinity Global Capital Market Private Limited is associated with this SME IPO and handled 3 SME IPOs in last 3 years. From last 3 IPOs, all opened above issue price or at par on the day of listing. As of now from last 3 IPOs, two are trading below issue price and one is trading above issue price as on today. ( As on 23.08.24 ) As per financials, Vdeal System Limited has shown good growth, RoNW is 49.52% and P/E is respectively 237.11, 49.75 and 17.59 as per FY22, FY23 and FY24 earnings. So, issue looks fully priced. Sudden rise in net-profit, higher trade receivables in FY24 and high issue expenses raises doubts. Company is an Integrated Electrical and Automation solution provider dealing in comprehensive electrical solutions across industries. So, we give NEUTRAL rating for this IPO. Readers must consult a qualified financial advisor prior to making any actual investment decisions.

• 1 Mr. Dhiraj Kochar
• 2 Mrs. Tapaswini Panda
• 3 Mr. Brahmananda Patra
• 4 M/s. Reveal AI Technologies Private Limited