Lorenzini Apparels IPO Review, Should You Invest?

Lorenzini Apparels Limited which incorporated in year 2007, is to raise Rs.4.47 cr for its working capital management requirements. Lorenzini Apparels IPO on BSE SME is fixed price issue type.  It has planned to sell 4,44,70,000 equity shares of Rs.10 each.

Lorenzini Apparels Limited Profile

Lorenzini Apparels Limited is engaged in the business of manufacturing, designing and marketing of readymade garments. The company offers wide range of formal, semi formal and casual wear of men and women. Its own manufacturing setup is in Delhi. The manufacturing includes cutting, stitching, sewing, finishing and packing.

The company has total 18 outlets in Delhi, Haryana, and Uttar Pradesh.

Lorenzini Apparels also have sell agreement with some of the e commerce platforms like Myntra, Amazon, Flipkart, Paytm etc.

Management team

Mr. Deepak Jain is Managing director of the company, who has 10 years of experience in the readymade garments industry. Mrs. Deepika Jain is Whole time director of the company while Mr. Rajit Sehgal is non-executive director of the company.

Key dates of Lorenzini Apparels IPO

Lorenzini Apparels BSE SME IPO issue opens on 31^st Jan, 2018 and will close on 6^th Feb.

Face value is Rs 10 and minimum lot is 10,000.

Finalization of basis of allotment – On or about 9^th Feb.

Starting of refunds- on or about 12^th Feb.

Transfer of shares in D mat account- On or about 14^th Feb.

Commencement of trading of equity shares on stock exchanges- On or about  15^th Feb.

Purpose of Lorenzini Apparels IPO

Working capital requirement- Funding Working capital is one of the most important requirement of any startup for which they issue IPO. Lorenzini will use Rs. 4.17 crore for this purpose.

General corporate expenses- Rs 0.30 crore is expected to use for this part.

Valuation Parameters

If we go through financials of last four years of Lorenzini Apparels, then we can see the company showing inconsistency in its performance.  Net profit of the company for FY 14 is 0.12 crores, FY 15 is 0.05 crores, FY 16 is -0.03 crores, FY 17 is 0.14 crores. And for the first four months of current fiscal it is 0.28 crores.

P/E ratio of the company is around 12, if we annualized latest earning and attribute to fully diluted post issue. while its peer Monte Carlo Fashions Ltd. P/E is 24.80 and Mandhana retail ventures ltd. has P/E of 15.81. NAV of Lorenzini Apparels is 13.34.

Should you Invest?

Considering all above points, Lorenzini Apparels can be at par investment decision for long term investors.

 

Disclaimer – Please consult a registered investment adviser before taking any trading decision. This review helps you to build base of your research.