Monarch Surveyours BSE SME IPO review (Apply)

•    The company is one of the leading comprehensive consultancy service providers with all related aspects.
•    It marked growth in its top and bottom lines for the reported periods.
•    It is able to generate higher margins because of its capability to provide all related services under one roof.
•    Based on recent financial data, the issue appears reasonably priced
•    Investors may park funds for medium to long term.

ABOUT COMPANY:
Monarch Surveyors & Engineering Consultants Ltd. (MSECL) is engaged in the business to provide comprehensive consultancy services under Concept to Commissioning of infrastructure projects which includes Survey, design and technical supervision for roads, railways, metros, town planning, geospatial, mapping, land acquisition, water, transmission Line, pipelines and other civil engineering sectors. Its objective is to create consistent value for clients by delivering uncompromising quality of services at optimum cost through continuous improvement in elemental technologies of this field, maintaining integrity and design processes which fosters excellence in all the aspects of its operations.

It is providing comprehensive consultancy services throughout the entire lifecycle of infrastructure projects, from concept to commissioning. MSECL’s expertise spans a wide array of sectors, including:

Surveying: it conducts detailed surveys to gather critical data, ensuring that all project planning is based on accurate and reliable information. Design Services: Its team designs innovative and efficient infrastructure solutions tailored to the specific needs of each project, ensuring compliance with all regulatory requirements. Technical Supervision: We provide oversight and management during the construction phase, ensuring that all work aligns with the established design and quality standards. Roads and Highways: It designs and supervises the construction of roadways that enhance connectivity and promote safe travel. Railways and Metros: Its expertise includes designing and managing rail projects that improve urban and regional transportation. Geospatial and Mapping: The company utilizes advanced geospatial technologies to provide accurate mapping and spatial analysis, supporting informed decision-making. Land Acquisition: It assists clients in navigating the complexities of land acquisition processes, ensuring compliance and efficiency. Water Management: The company designs and implements water infrastructure projects, focusing on sustainability and resource management. Transmission Lines and Pipelines: Its services extend to the planning and execution of essential utilities, ensuring they meet the demands of modern infrastructure.

In its endeavour to strive towards consistent delivery, the company has designed organizational roles and processes to ensure that its deliverables which are in the form of reports, maps, drawings, etc. are conclusive and adds tremendous value to clients. It has focus in employee engagement which is the key factor that powers the growth of organization year after year.

It is providing end to end services with a diverse workforce specializing in Detailed Engineering, Project Management, Construction Supervision, Facilities Design, Land Surveying, Land Acquisition Services, Geospatial mapping, Geo-technical Investigation and Special Inspections. It has several administration and site offices across India. As of March 31, 2025, it had 507 employees on its payroll.

ISSUE DETAILS/CAPITAL HISTORY:
The company is coming out with its maiden book building route IPO of 3750000 equity shares of Rs. 10 each to mobilize Rs. 93.75 cr. at the upper cap. The company has announced a price band of Rs. 237 – Rs. 250 per share. The IPO opens for subscription on July 22, 2025, and will close on July 24, 2025. The minimum application to be made is for 1200 shares and in multiple of 600 shares thereon, thereafter. Post allotment, shares will be listed on BSE SME. The issue constitutes 26.49% of post-IPO paid-up equity capital of the company. From the net proceeds of the issue, the company will utilize Rs. 30.00 cr. for working capital, Rs. 32.00 cr. for capex on purchase of machinery, and the rest for general corporate purposes.

The IPO is solely lead managed by Beeline Capital Advisors Pvt. Ltd., while Bigshare Services 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. 

Having issued entire initial equity shares at par, the company issued bonus equity shares in the ratio of 9 for 1 in February 2001, 4 for 1 in March 2002, and 120 for 1 in August 2024. The average cost of acquisition of shares by the promoters is Rs. 0.00 per share. 

Post-IPO, company’s current paid-up equity capital of Rs. 10.41 cr. will stand enhanced to Rs. 14.16 cr. Based on the upper price band of the IPO, the company is looking for a market cap of Rs. 353.90 cr. 

FINANCIAL PERFORMANCE:
On the financial performance front, for the last three fiscals, the company has posted a total income/net profit of Rs. 72.72 cr. / Rs. 8.59 cr. (FY23), Rs. 141.27 cr. / Rs. 30.01 cr. (FY24), Rs. 155.66 cr. / Rs. 34.83 cr. (FY25). Thus, it marked growth in its top and bottom lines for the reported periods.

For the last three fiscals, the company has reported an average EPS (simple average basis) of Rs. 23.52, and an average RoNW of 32.78%. The issue is priced at a P/BV of 2.39 based on its NAV of Rs. 104.56 as of March 31, 2025, but post-IPO NAV data is missing from the offer document.

If we attribute its FY25 super earnings on post-IPO expanded equity base, then the asking price is at a P/E of 10.16, and based on its FY24 earnings, the P/E stands at 11.79. Thus, based on its recent financial data, the issue appears reasonably priced.

The company has reported PAT margins of 11.98% (FY23), 21.51% (FY24), 22.60% (FY25), and RoCE margins of 22.20%, 48.54%, 39.59%, 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 offer document, the company has shown Dhruv Consultancy, Rudrabhishek Enterprises, as their listed peers. They are trading at a P/E of 18.1, and 22.6 (as of July 18, 2025). However, they are not truly comparable on an apple-to-apple basis.

MERCHANT BANKER’S TRACK RECORDS:
This is the 63rd mandate from Beeline Capital in the last three fiscals (including the ongoing one). From the last 12 listings, all opened with premium ranging from 0.06% to 146.91% on the date of listing.