Choice Equity Broking IPO report on Uma Exports
West Bengal based agri-commodity trader Uma Exports Ltd. (UEL), is coming up with an IPO to raise Rs. 60cr, which opens on 28th Mar. and closes on 30th Mar. 2022. The price band is Rs. 65 - 68 per share. The IPO only comprises of fresh issue of shares. From the net proceeds, Rs. 50cr will be utilized to augment the working capital requirement.
Valuation and Outlook
At higher price band of Rs. 68, UEL is demanding a P/E multiple of 18.9x (to its TTM earning of Rs. 3.6), which is at discount to only listed peer. Considering the lower trading margins, the business of the company doesn't seems to be sustainable. Thus we are assigning an “AVOID” rating for the issue.
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