Viaz Tyres Limited

Viaz Tyres Limited is engaged in manufacturing of rubber tubes for bicycles, two and three wheelers, passenger vehicles and heavy load industrial vehicles. They also deal in ancillary products like Off The Road (OTR) Tyre tubes and Animal Driven Vehicle (ADV) Tubes, Engine Oil and Grease on white labeling bases. They have recently started selling bicycle tyres which they get manufactured on job work basis, depending upon the market demands. We sell rubber tubes, bicycle tyres and ancillary products under the brand names "VIAZ". They sell the products in domestic as well as international markets. In order to capture more market share they are developing alternate brand "VAZ". Our production facility with installed capacity of manufacturing 7,00,000 Tube per Month, located at Nandasan near Ahmedabad, Gujarat India.  As on September 30, 2022, company has total 15 domestic distributors for rubber tubes across India. Their distribution network is spread across 19 states, namely, Andhra Pradesh, Assam, Bihar, Chhattisgarh, Delhi, Gujarat, Haryana, Jharkhand, Karnataka, Kerala, Madhya Pradesh, Maharashtra, Punjab, Rajasthan, Tamil Nadu, Telangana, Uttar Pradesh, Uttarakhand, West Bengal. They also have presence in 5 countries namely United States of America, Turkey, Romania, United Arab Amirates and Colombia. Further, they have 7 international distributors for sale of rubber tubes and tyres. As on September 30, 2022, the company has 37 employees including on-roll labour, who looks after the business operations, production, quality control, commercial, finance, marketing & sales etc. As per financial performance, Viaz Tyres Limited has posted total income/net profits of Rs 19.94 Cr / Rs 0.14 Cr (FY20), Rs 29.17 Cr / Rs 0.60 Cr (FY21), Rs 29.33 Cr / Rs 1.46 Cr (FY22) and Rs 29.79 Cr / Rs 1.52 Cr (upto H1 FY23). So company has shown good sales growth, but jump in net profit just before IPO is very surprising. Company has posted an average EPS of Rs 1.13/- and average RoNW of 16.53% for last three fiscals. Issue is priced at a P/BV of 2.45 as per NAV of Rs 25.29/- post issue. As per FY22 earnings on fully diluted equity post issue, asking price is at P/E of around 51.7 and as per annualised FY23 earnings P/E is 24.87. As per RHP, there are no listed peers available. On BRLM's front, Beeline Capital Advisors Private Limited associated with this SME IPO and has handled 7 SME IPOs in last one years. From last 7 SME IPOs all opened above issue price or at par on the day of listing. As of now from last 7 IPOs, one is trading below and remaining are trading above issue price or at par. ( As on 08.02.2023) As per financials, Viaz Tyres Limited has shown average results, RoNW is 22.94% and P/E is respectively 51.71 and 24.87 as per FY22 and annualised FY23 earnings, which looks aggressively priced. Also, company has shown super profits in last one and half year and sustainability of same in future is very doubtful. Also company is in business of manufacturing of rubber tubes, which is highly fragmented and competitive. Performance of BRLM is good. So we are giving AVOID rating to this SME IPO.

• 1 Mr. Janak kumar Mahendrabhai Patel
• 2 Mr. Rajesh kumar Prabhudas bhai Patel
• 3  Mr. Parichay kumar Maganbhai Patel
• 4 Mrs. Himaben Janak kumar Patel
• 5 Mrs. Nirma ben Rajeshkumar Patel
• 6 Mrs. Kena ben Parichay kumar Patel