EPW India NSE SME IPO review (Not Rated)

•    The company is engaged in the business of refurbishing IT electronics on B2B and D2C models.
•    The sudden boost for FY25 in its top and bottom line raises eyebrows and concern over its sustainability, as it is operating in a highly competitive and fragmented segment.
•    Based on its recent financial data, the issue appears greedily priced.
•    There is no harm in skipping this pricey and dicey issue. 

ABOUT COMPANY:
EPW India Ltd. (EIL) is IT electronics refurbishing company providing refurbished electronics by using two different Supply chain method (Direct to consumer and Business to Business) at significant prices as compared to new products. Its business model encompasses end to end reverse supply chain for IT assets. It involves procuring used IT assets (laptops, desktops, Chromebook and peripherals), refurbishing them to as close to new condition, and selling them directly to end use customers – businesses or retail. 

Currently, the company sells IT products like laptops, desktops, Chromebook, monitors, and accessories (keyboards, mouse, etc.) through its own shops and website. To support the operational activity of refurbishment of IT products, the company has established an in-house repair and renewal facility located at A.C.C. structure Plot No. 30/P, Survey No. 460/2. This facility, equipped with modern technology, covers an area of 4,500 sq. feet. It has a team of 32 technicians dedicated to refurbishing laptops and other IT products, ensuring smooth and efficient operational process for the company. The company carries out a 15 – 20 days refurbishment process for used laptops that begins with acquiring and inspecting devices, followed by sorting and grading them based on condition. All data is then securely erased, and thorough hardware testing identifies the faulty parts if any, which are then replaced. The laptops undergo deep cleaning and physical restoration before software installation and activation. After quality checks and testing, the products are then, packaged, and send to the shops or listed for sale on website of the company. 

Finally, the laptops are sold and delivered with after-sales support and warranty, ensuring quality, affordable refurbished IT products while promoting sustainability. The company makes use of various software applications as part of its refurbishment process, ensuring that customers receive genuine, licensed versions of the software for a better and more reliable experience. the company also implements multiple software, these software helps it to improve its day-to-day operations and strengthen the overall efficiency of its supply chain system. As of September 30, 2025, it had 84 employees on its payroll.

ISSUE DETAILS/ CAPITAL HISTORY:
The company is coming out with its maiden book building route IPO of 3279600 equity shares of Rs. 5 each to mobilize Rs. 31.81 cr. at the upper cap. The company has announced a price band of Rs. 95 – Rs. 97 per share. The minimum application to be made is for 2400 shares and in multiples of 1200 shares thereon, thereafter. The issue opens for subscription on December 22, 2025, and will close on December 24, 2025. The IPO constitute 28.57% of the post-IPO paid-up capital of the company. The shares will be listed on NSE SME Emerge. From the net proceeds of the IPO, it will utilize Rs. 8.50 cr. for repayment of banking facility, Rs. 15.85 cr. for working capital, and the rest for general corporate purposes. 

The IPO is solely lead managed by Getfive Advisors Pvt. Ltd., and Bigshare Services Pvt. Ltd. is the registrar to the issue. SMC Global Securities Ltd. is the market maker as well as a syndicate member.

The company has issued initial equity capital at par value, and issued bonus shares in the ratio of 40 for 1 in September 2025. The average cost of acquisition of shares by the promoters is Rs. 0.12 per share.

Post-IPO, company’s current paid-up equity capital of Rs. 4.10 cr. will stand enhanced to Rs. 5.74 cr. Based on the upper band of the IPO pricing, the company is looking for a market cap of Rs. 111.35 cr. 

FINANCIAL PERFORMANCE:
On the financial performance front, for the last three fiscals, the company has (on a consolidated basis) posted total income / net profit, of Rs. 6.66 cr. / Rs. 0.06 cr. (FY23), Rs. 18.55 cr. / Rs. 0.74 cr. (FY24), Rs. 53.34 cr. / Rs. 4.33 cr. (FY25). For H1 of FY26 ended on September 30, 2025, it earned a net profit of Rs. 4.02 cr. on a total income of Rs. 44.04 cr. 

For the last three fiscals, the company has reported an average EPS of Rs. 2.95, and an average RoNW of 72.30%. The issue is priced at a P/BV of 8.61 based on its NAV of Rs. 11.26 per share as of September 30, 2025, but its post-IPO NAV data is missing from the offer documents.

If we attribute FY26 annualized super earnings to its post-IPO fully diluted paid-up equity capital, then the asking price is at a P/E of 13.84, and based on FY25 earnings, the P/E stands at 25.73. Despite inflated earnings, the issue appears aggressively priced.

For the reported periods, the company has posted PAT margins of 0.97% (FY23), 4.00% (FY24), 8.13% (FY25), 9.14% (H1-FY26), and RoCE margins of 11.12%, 86.47%, 35.03%, 24.13%, respectively, for the referred periods.

DIVIDEND POLICY:
The company has not paid any dividends for the reported periods of the offer document. It will adopt a prudent dividend policy, based on its financial performance and future prospects. 

COMPARISON WITH LISTED PEERS:
As per the offer document, the company has shown GNG Electronics, Newjaisa Techno, Cerebra Integrated, as its listed peers. They are currently trading at a P/E of 43.8, NA, and NA (as of December 19, 2025). However, they are not truly comparable on an apple-to-apple basis. This comparison appears to be an eyewash.

MERCHANT BANKER’S TRACL RECORD:
This is the 3rd mandate from Getfive Advisors in the ongoing fiscal. Out of the last 2 listings, all listed at a discount on the date of listing. The Lead Manager has a poor track record.