Quality RO IPO to Open Next Week, Check Out the Details

Quality RO IPO to Open Next Week, Check Out the Details In the next week, another IPO namely Quality RO is lined up to open for subscription in the primary market.

Quality RO:

The company, headquartered in Gujarat, is in the business of supplying various water treatment products as well as logistics services. It procures polypropylene raw materials and produces softener equipment such as filter parts, premium filter cartridges, taps, and membrane housing as a supplier. Contract manufacturing for the water treatment industry is also a part of the company's operations. The following are the areas in which Quality RO Industries is active:

• Manufacturing water softener equipment,
• Contract manufacturing,
• Trading RO equipment spares and related products, and
• Contract logistics to local infrastructure and manufacturing firms.

The company has an installed capacity of I 70,000 units for Filters, 17,000 units for RO Bowl, and 25,000 units for RO Housing as of November 30, 2021. The registered office employs seven people, including the company's directors. Its registered office and factory are situated at Plot No. 09, POR Industrial Park, NH 08 Behind Sahayog Hotel, Village POR, Vadodara-391243, Gujarat, India.

When:

The IPO opens on Jan 27, 2022, and closes on Feb 1, 2022.

• Fresh Issue: ₹2.70 Cr
• Offer for sale: ₹2.70 crore.
• Price band: Rs 51 per equity share.
• Face value: Rs 10 apiece.
• Lot size: 2000 shares and multiples
• Listing: NSE and BSE.
• Listing Date: 9^th Feb
• Promoters:

Mr. Vivek Dholiya is the company promoter.

Objectives of the IPO:

The company aims to utilize the funds for following purpose:

• To meet the capital expenditure requirements
• Working capital requirements
• Public Issue Expenses
• Meet general corporate purposes.

Summary of Financial Information:

In terms of financial performance, QRIL reported only 62 days of work after its incorporation in FY22. It made a net profit of Rs. 0.02 crore on a turnover of Rs. 0.17 crore from September 30, 2021 to November 30, 2021. Its turnover/net profits as a proprietorship entity have been Rs. 1.24 crore / Rs. - (0.06) crore (FY19), Rs. 1.90 crore/Rs. 0.01 crore (FY20), Rs. 1.85 crore / Rs. 0.04 crore (FY21) (FY21). Based on its NAV of Rs. 11.31 as of November 30, 2021, the issue is priced at a P/BV of 4.51, and at a P/BV of 2.64, based on its post-IPO NAV of Rs. 19.29. If we annualize FY22 earnings and attribute them to fully diluted post-IPO paid-up equity capital, we arrive at a P/E of 113, making the offer exorbitantly priced.