Mach Conferences BSE SME IPO review (Apply)

•    The company is offering tailor made comprehensive services for MICE.
•    It marked setback for FY22 on account of the Pandemic. 
•    It regained lost glory from FY23 and is poised for bright prospects ahead with the upsurge in tourism sector.
•    Based on FY24 earnings, the issue appears 
•    Investors may park funds for medium to long term. 

ABOUT COMPANY:
Mach Conferences & Events Ltd. (MCEL) is in the business of providing comprehensive array of services tailor made for MICE (Meeting, Incentives, Conferences, Exhibitions) and Events sector. Its experience ranges for arranging small corporate events to large global events. The company is specialized in conference management, Exhibition management and Global Event Planning. It also manages all logistical aspects of events at specific destinations. This includes venue selection, accommodation arrangements, transportation logistics, local activities, and on-site coordination. It has a team of MICE and Events professionals working on the key essence of attention to detail, continuous budget control and endless creativity to help the client to explore new venues and new ways to impress clients.

The company operates within the MICE (Meetings, Incentives, Conferences, and Exhibitions) industry, specializing in providing comprehensive event management solutions. It offers end-to-end services for corporate meetings, conferences, trade shows, and other gatherings, facilitating seamless planning, execution, and coordination. Its expertise lies in crafting tailored experiences, from conceptualization to logistics, to ensure impactful events that meet clients' objectives. Leveraging innovative design, cost-effective management, and efficient operations. It strives to stay competitive in the dynamic market landscape. MCEL's commitment to customer satisfaction drives it to continuously enhance capabilities and deliver exceptional results in the MICE industry. Majorly, its clientele is from Banking, Finance and Insurance Sector.

However, it has worked for various industries including Hospitality, Infrastructure, FMCG etc. During last financial years i.e. 2023-24, it has completed 90 events including events conducted at London, Missouri, Bangalore, South Korea, Paris, Goa, Srinagar, Singapore etc. The average revenue for the conducting such events in the FY 2023-24 was Rs. 263.62 lakhs per event. The Company is ISO 9001:2015 Certified for Quality Management Systems for providing Conference and Event Management Services to Corporate Clients. The company is a member of Pacific Asia Travel Association (PATA) since 2012. The Company has been recognized as an ALLIED member of Indian Association of Tour Operators (IATO) which is National Body of Tour Operators and awarded its membership for the year 2024-25. It is certified by International Air Transport Association (IATA) for meeting Professional Standards to promote and sell international air passenger transportation in the year 2024. The company has recently applied for the membership of Association of Domestic Tour Operators of India (ADTOI).

Currently, it is offering a comprehensive suite of MICE (Meetings, Incentives, Conferences, and Exhibitions) services catered specifically to B2B customers and going forward it proposes to explore in B2C segment by launching a travel B2C portal "BookMyYatra.com" which presents it a strategic opportunity to leverage an existing customer base and expand market reach. As an established MICE company with a large customer base, it already has valuable insights into their preferences, travel habits, and booking behaviors. Furthermore, it is also planning to diversify services into Religious Tourism. Since it is a blend of spirituality, economic opportunity, and cultural stewardship that makes investing in Religious Tourism both a prudent business decision and a meaningful contribution to India's tourism landscape.

The company has locational presence by way of co-working space in more than 18 States and Union Territories including Delhi, Maharashtra, Kolkata, Assam, Tamil Nadu, Jammu & Kashmir, Himachal Pradesh, Goa, Rajasthan etc. However, all the execution work takes place from its corporate office situated at C-127 2nd Floor, Sector 2, Gautam Buddha Nagar, Noida, Uttar Pradesh, India, 201301. As of March 31, 2024, it had 55 employees on its payroll.

ISSUE DETAILS/CAPITAL HISTORY:
The company is coming out with its maiden combo book building route IPO of 5568000 equity shares of Rs. 10 each to mobilize Rs. 125.28 cr. at the upper cap. It has announced a price band of Rs. 214 - Rs. 225 per share. The IPO consists of 2229000 fresh equity shares worth Rs. 50.15 cr. (at the upper cap, and an Offer for Sale (OFS) of 3339000 shares worth Rs. 75.13 cr. (at the upper cap). The issue opens for subscription on September 04 2024, and will close on September 06, 2024. The minimum application to be made is for 600 shares and in multiples thereon, thereafter. Post allotment, shares will be listed on BSE SME. The issue constitutes 26.47% of the post-IPO paid-up capital of the company. From the net proceeds of the IPO, it will utilize Rs. 33.26 cr. for working capital, and the rest for general corporate purposes. 

The issue is solely lead managed by Beeline Capital Advisors Pvt. Ltd., and Skyline Financial Services Pvt. Ltd. is the registrar to the issue. Beeline Group's Spread X Securities Pvt. Ltd. is the market maker for the company. 

Having issued initial equity shares at par value, the company issued further equity shares at a price of Rs. 4760 in February 2024. It has also issued bonus shares in the ratio of 360 for 1 in February 2024.The average cost of acquisition of shares by the promoters/selling stakeholders is Rs. 0.28 per share. 

Post-IPO, company's current paid-up equity capital of Rs. 18.81 cr. will stand enhanced to Rs. 21.04 cr. Based on the upper IPO price band, the company is looking for a market cap of Rs. 473.34 cr.  

FINANCIAL PERFORMANCE:
On the financial performance front, for the last three fiscals, the company has (on a standalone basis) posted a total income/net profit/ - (loss) of Rs. 23.84 cr. / Rs. - (2.61) cr. (FY22), Rs. 141.94 cr. / Rs. 8.81 cr. (FY23), Rs. 238.99 cr. / Rs. 26.18 cr. (FY24). It reposted same set of earnings on a consolidated basis for FY24.

For the last three fiscals, it has reported (on the basis of simple average) an average EPS of Rs. 5.74, and an average RoNW of 36.33%. The issue is priced at a P/BV of 8.54 based on its NAV of Rs. 26.35 as of March 31, 2024, and at a P/BV of 4.75 based on its post-IPO NAV of Rs. 47.40 per share (at the upper cap). 

If we attribute FY24 earnings to its post-IPO fully diluted paid-up capital, then the asking price is at a P/E of 18.07. Thus the issue relatively appears fully priced based on FY24 earnings.

For the reported periods, the company has posted PAT margins of - (11.26) % (FY22), 6.23% (FY23), 11.04% (FY24), and RoCE margins of - (9.57) %, 34.06%, 57.57% 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 performance and future prospects. 

COMPARISON WITH LISTED PEERS:
As per the offer document, the company has shown Exhicon Events and Touchwood Entertainment as their listed peers. They are trading at a P/E of 29.1 and 46.0 (as of August 30, 2024). However, they are not comparable on an apple-to-apple basis.

MERCHANT BANKER'S TRACK RECORD:
This is the 48th mandate from Beeline Capital in the last three fiscals (including the ongoing one), out of the last 10 listings, all listed with premiums ranging from 7.14% to 386.67% on the date of listing.