Jay Ambe Super BSE SME IPO review

•    The company is running a chain of retail stores under the branch name of “City Square Mart”
•    It is widely a Gujarat centric player currently having 17 stores.
•    It mulls three new stores from the IPO funding.
•    The company marked growth in its top and bottom lines for the reported periods.
•    Based on its recent financial data, the issue appears aggressively priced.
•    Well-informed/cash surplus investors may park moderate funds for long term.

ABOUT COMPANY:
Jay Ambe Supermarkets Ltd. (JASL) is running City Square Mart chain of retail stores. It started with the object to carry on the business of trading of FMCG material, grocery, Home Textile, Home Décor, Cloths, Apparels, Toys, Gift Articles, Footwear, other house hold items, via supermarkets and its type and other related activity to fulfil the main object. The company is committed to promote the supermarket trend with the objective of enhancing the retail shopping experience for all customer segments. By delivering best-in-class service, a broad product range, and fair prices, the company not only seeks to improve living standards but also emphasizes the importance of customer satisfaction over mere profit.

Currently it has 17 stores and 132 employees on its payroll. The company began its journey in August 2018 with its first store in Kudasan, Gandhinagar. In the initial six years itself, the company expanded to 17 stores across Gujarat, establishing itself as a fast-growing retail chain in the region. The Company is carrying on its business through retail marts via franchise model as well. A franchise is a type of license that grants a franchisee access to a franchisor's proprietary business knowledge, processes, and trademarks, thus allowing the franchisee to sell a product or service under the franchisor's business name. In exchange for acquiring a franchise, the franchisee usually pays the franchisor an initial start-up fee and annual licensing fees. The relationship between the franchisor and franchisee is governed by the franchise agreement.

Our business model dwells on lease rental model, as we focus to secure retail spaces which ensures high visibility and easy accessibility to customers. Out of 17 stores, 10 are owned by the company and the rest are on franchise stores. FMCG has the lion share in its revenue followed by Apparels/footwears/general merchandise and others. Gandhinagar and Ahmedabad bring around 75% annual revenue and rest from other metros of Gujrat. It faces strong competition from local Kirana shops/super markets/national retail chain’s etc. 

ISSUE DETAILS/CAPITAL HISTORY:
The company is coming out with its maiden book building route IPO of 2364800 equity shares to mobilize Rs. 18.45 cr. (at the upper cap). It has announced a price band of Rs. 74 – Rs. 78 per share of Rs. 10 each. The IPO opens for subscription on September 09, 2025, and will close on September 11, 2025. The minimum application to be made is for 3200 shares and in multiple of 1600 shares thereon, thereafter. Post allotment, shares will be listed on BSE SME. The issue constitutes 26.63% of post-IPO paid-up equity capital of the company. From the net proceeds of the issue, the company will utilize Rs. 4.25 cr. for purchase of existing store, Rs. 4.63 cr. for purchase of fit-outs for three new stores, and Rs. 4.50 cr. for working capital, and the rest for general corporate purposes.

The IPO is solely lead managed by Beeline Capital Advisors Pvt. Ltd., while MUFG Intime India Pvt. Ltd. is the registrar to the issue. Beeline Group’s Spread X Securities Pvt. Ltd., is the market maker as well as a syndicate member. 

The company has issued/converted initial equity shares at par value. It issued further equity capital in the price range of Rs. 83.85 – Rs. 198.00 between June 2022, and January 2025. It also issued bonus shares in the ratio of 2 for 1 in January 2025. The average cost of acquisition of shares by the promoters is Rs. 2.61, Rs. 3.58, Rs. 3.63, and Rs. 3.68 per share. 

Post-IPO, company’s current paid-up equity capital of Rs. 6.52 cr. will stand enhanced to Rs. 8.88 cr. Based on the upper price band of the IPO, the company is looking for a market cap of Rs. 69.26 cr. 

FINANCIAL PERFORMANCE:
On the financial performance front, for the last three fiscals, the company has posted total Income/Net Profit, of Rs. 32.69 cr. / Rs. 0.35 cr. (FY23), Rs. 33.41 cr. / Rs. 1.54 cr. (FY24), and Rs. 47.40 cr. / Rs. 2.75 cr. (FY25). 

For the last three fiscals, the company has reported an average EPS of Rs. 3.26, and an average RoNW of 18.88%. The issue is priced at a P/BV of 3.74 based on its NAV of Rs. 20.83 as of March 31, 2025, but its post-IPO NAV data is missing from the offer documents.

If we attribute its FY25 super earnings on post-IPO expanded equity base, then the asking price is at a P/E of 25.16, and based on its FY24 earnings, the P/E stands at 44.83. Thus, based on its recent financial data, the issue appears aggressively priced.

The company has posted PAT margins of 1.08% (FY23), 4.64% (FY24), 5.82% (FY25), and RoCE Margins of 12.32%, 21.34%, 24.12%, respectively for the referred periods. 

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

COMPARISON WITH LISTED PEERS:
As per offer document, the company has shown Osia Hyper Retail., as its listed peer. It is currently trading at a P/E of around 17.6 (as of September 05, 2025). However, they are not truly comparable on an apple-to-apple basis. This compare appears to be an eyewash.

MERCHANT BANKER’S TRACK RECORDS:
This is the 56th mandate from Beeline Capital in the last three fiscals (including the ongoing one). Out of last 13 listings, all opened with premium ranging from 0.56% to 146.91 % on the date of listing.