Iware SupplyChain NSE SME IPO review (Apply)

•    The company is one of the leading integrated Pan India logistics company providing all related services.
•    It marked growth in its top and bottom lines from FY23 onwards following its planned strategi of providing integrated services.
•    Based on its recent financial data, the issue appears fully priced. 
•    It is poised for bright prospects following long term relations with creamy B2B customers.
•    Investors may park funds for medium to long term.

ABOUT COMPANY:
Iware SupplyChain Services Ltd. (ISSL) is an integrated pan India logistics company primarily operating in five different type of services (i) Warehousing (including third-party logistics (“3PL”) and Carrying & Forwarding Agent), (ii) Transportation (Including Carrying & Forwarding Agent) (iii) Rake Handling Services and (iv) Business Auxiliary Services (v) Rental Income. It operates through network of its various business offices situated in the state of Gujarat, West Bengal, Uttar Pradesh, Rajasthan, Punjab, Haryana and Delhi as on the Date of this Prospectus. The company provides transportation services through two primary modes i.e., Road Transport and Rail Transport.

The company provides logistics support and solutions with its: (a) pan-India presence, (b) integrated service offerings, and (c) large network of vehicle fleet. ISSL has a fleet of 47 vehicles out of which 15 vehicles are of 22 Feet Open Body and remaining vehicles are 32 Feet Containers as on date of this prospectus.

The company works with different clients who operates in different industry like Fast Moving Consumer Goods (FMCG), Auto components, Sanitary-ware and etc. This shows the strength of the company handling and providing end to end logistic solutions to different industries. Its Unique Selling Proposition (USP) is nationwide presence and an experienced management team, whose extensive experience allows it to manage various types and sizes of transactions. 

The end use of our logistics and warehousing services is to ensure the seamless movement of goods from one location to another, meeting the diverse needs of businesses and customers across various industries. As of March 31, 2025, it had 213 employees on its payroll. It also hires third party contractors as and when required for various tasks.

The company is catering to B2B segment and its top 10 customers includes names like AWL Agri Business, Jaquar, Shriram Pistons, Cargill India, Shakti Pumps, etc. All these customers are on growth path and in turn higher business is expected from them in coming years. Thus, the company management is confident of maintaining trends reported in recent fiscals.

ISSUE DETAILS/CAPITAL HISTORY:
The company is coming out with its maiden IPO of 2856000 equity shares of Rs. 10 each at a fixed price of Rs. 95 per share to mobilize Rs. 27.13 cr. The issue opens for subscription on April 28, 2025, and will close on April 30, 2025. The minimum number of shares to be applied is for 1200 shares and in multiples thereon, thereafter. Post allotment, shares will be listed on NSE SME Emerge. The issue constitutes 26.55% of the post-IPO paid-up capital of the company. The company is spending Rs. 2.40 cr. for this IPO process, and from the net proceeds, the company will utilize Rs. 14.06 cr. for capex on new industrial shed construction, Rs. 6.80 cr. for working capital, and Rs. 3.87 cr. for general corporate purposes. Higher spending for IPO process indicates fully structured mode of the IPO.

The IPO is solely lead managed by GetFive Advisors Pvt. Ltd., and KFin Technologies Ltd. is the registrar to the issue. SMC Global Securities Ltd., is the Market Maker for the company.

Having issued initial equity shares at par value, the company issued bonus equity shares in the ratio of 785 for 1 in September 2024. The average cost of acquisition of shares by the promoters is Rs. 0.01, and Rs. 10.80 per share. 

Post-IPO, company’s current paid-up equity capital of Rs. 7.86 cr. will stand enhanced to Rs. 10.72 cr. Based on the upper price band of the IPO, the company is looking for a market cap of Rs. 101.80 cr. 

FINANCIAL PERFORMANCE:
On the financial performance front, for the last three fiscals, the company has posted a total income/net profit of Rs. 43.72 cr. / Rs. 0.42 cr. (FY23), and Rs. 58.77 cr. / Rs. 4.17 cr. (FY24), and Rs. 86.11 cr. / Rs. 8.02 cr. (FY25). The sudden spurt in its bottom lines for the last two fiscals raises concern, as it is operating in a highly competitive and fragmented segment.

For the last three fiscals, the company has reported an average EPS of Rs. 6.96 and an average RoNW of 43.55%. The issue is priced at a P/BV of 4.61 based on its NAV of Rs. 20.59 as of March 31, 2025, and at a P/BV of 2.35 based on its post-IPO NAV of Rs. 40.42 per share. 

If we attribute FY25 annualized super earnings on post-IPO fully diluted equity capital, then the asking price is at a P/E of 12.70. Based on FY24 earnings, the P/E stands at 24.42. The issue relatively appears fully priced. The management is confident of maintaining the trends with expected work loads from its creamy B2B customers that are on steady growth path.

For the reported periods, the company has posted PAT margins of 0.97% (FY23), 7.10%, (FY24), 9.34% (FY25), and RoCE margins of 11.43%, 24.44%, 30.34% 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. 

COMPARISION WITH LISTED PEERS:
As per the offer document, the company has shown Pranik Logistics and Shreeji Translogistics, as their listed peers. They are trading at a P/E of 11.4, and 26.3 (as of April 24, 2025). However, they are not truly comparable on an apple-to-apple basis. 

MERCHANT BANKER’S TRACK RECORD:
This is the 1st mandate from GetFive Advisors in the current fiscal, and hence has no track records for previous listing.