Monika Alcobev BSE SME IPO review (May apply)

•    The company lead the pack of imported liquor sector with wide portfolio of products.
•    It specializes in importing and marketing of luxury spirits, wines in and around Indian subcontinents, including India.
•    The company posted steady growth in its top and bottom lines for the reported periods.
•    Based on recent set of financial data, the issue appears aggressively priced.
•    Well-informed investors may park moderate fund for medium term.

ABOUT COMPANY:
Monika Alcobev Ltd. (MAL) is a leading player in the imported liquor sector, offering a diverse portfolio of premium and luxury alcoholic beverages. (Source: Technopak Report). The Company specialises in importing, sales, distribution, and marketing for luxury spirits, wines, and liqueurs throughout India and the Indian Subcontinent including Travel Retail Duty Free Shop. It provides complete supply chain solution through its robust distribution network. 

MAL holds exclusive selling rights to more than 70 renowned global brands for India and Indian Sub-continent countries and is responsible for their strategic brand development and market expansion. The Company offers a comprehensive operational framework to its partner brands, which includes managing the entire supply chain process, starting with import, followed by sales & distribution across the region. Additionally, it handles pricing, strategic planning, brand development, and marketing to ensure that each brand effectively reaches its target audience and achieves growth in the Indian market and Indian subcontinent market. Its diversified product portfolio includes iconic names such as Jose Cuervo (Tequila), Bushmills (Irish Whisky), Rémy Martin (Cognac), Cointreau (Liqueur), Choya (Liqueur) and Belenkaya (Vodka), all brands with a legacy of excellence. The company achieved the highest realization per case at INR 17,017 (Source: - Technopak Report).

The company holds a 19.0% share in tequila imports, marking its strong position amid growing demand for premium agave-based spirits. (Source: Technopak Report). The Company also commands a 7.5% share in liqueurs imports, underscoring its rising influence in niche and indulgent segments. (Source: Technopak Report) Additionally, it maintains a 1.9% share in gin and geneva imports, focusing on catering to the evolving preferences in white spirits. (Source: Technopak Report). The rum segment sees MAL as the top importer with a commanding 12.3% market share. (Source: Technopak Report).

The company operates both domestically within India and internationally across countries in Indian Subcontinent region, including Nepal, Sri Lanka and the Maldives. Domestically, it has an extensive reach, with distribution capabilities across more than 20 states and Union Territories in India. This broad distribution network allows it to cater to a diverse and expansive customer base, ensuring that premium alcoholic beverages are accessible in various markets across the country. Internationally, the Company leverages its infrastructure to serve key Indian Subcontinent markets, bringing world-class products to regions with rapidly growing demands for luxury spirits and wines.

MAL is known for its strategic alliance with global brands, which has contributed to the growth of both the Company and its alliance partners. As of the date of this Red Herring Prospectus, it has exclusive selling rights for more than 70 brands with Letter of Authorisation (LOA). Their approach to brand selection is supported by its ability to adapt each product's positioning to match the preferences of Indian Subcontinent consumers, making MAL a key player in the luxury beverage sector. As of March 31, 2025, it had 196 employees on its payroll.

ISSUE DETAILS/CAPITAL HISTORY:
The company is coming out with its maiden book building route combo IPO of 5791200 equity shares of Rs. 10 each to mobilize Rs. 165.63 cr. at the upper cap. The company has announced a price band of Rs. 271 – Rs. 286 per share. The issue consists of 4791200 fresh equity shares (worth Rs. 137.03 cr. at the upper cap), and an offer for sale (OFS) of 1000000 equity shares (worth Rs. 28.60 cr. at the upper cap). The IPO opens for subscription on July 16, 2025, and will close on July 18, 2025. The minimum application to be made is for 800 shares and in multiple of 400 shares thereon, thereafter. Post allotment, shares will be listed on BSE SME. The issue constitutes 27.00% of post-IPO paid-up equity capital of the company. From the net proceeds of the fresh equity issue, the company will utilize Rs. 100.64 cr. for working capital, Rs. 11.45 cr. for pre-payment/repayment of certain borrowings, and the rest for general corporate purposes.

The IPO is solely lead managed by Marwadi Chandarana Intermediaries Brokers Pvt. Ltd., while MUFG Intime India Pvt. Ltd. is the registrar to the issue. Bhansali Value Creations Pvt. Ltd. is the market maker. Marwadi Chandarana Intermediaries is a syndicate member.

Having issued initial equity shares at par, the company issued further equity shares in the price range of Rs. 962 – Rs. 1969 per share between January 2024, and December 2024. It has also issued bonus shares in the ratio of 6 for 1 in February 2025. The average cost of acquisition of shares by the promoters / selling stakeholders is Rs. 0.88, Rs. 1.43, and Rs. 137.43 per share. 

Post-IPO, company’s current paid-up equity capital of Rs. 16.66 cr. will stand enhanced to Rs. 21.45 cr. Based on the upper price band of the IPO, the company is looking for a market cap of Rs. 613.47 cr. 

FINANCIAL PERFORMANCE:
On the financial performance front, for the last three fiscals, the company has posted a total income/net profit of Rs. 140.36 cr. / Rs. 13.03 cr. (FY23), Rs. 191.28 cr. / Rs. 16.60 cr. (FY24), Rs. 238.36 cr. / Rs. 23.11 cr. (FY25). Thus, it marked steady growth in its top and bottom lines for the reported periods.

For the last three fiscals, the company has reported an average EPS of Rs. 12.38, and an average RoNW of 34.17%. The issue is priced at a P/BV of 4.94 based on its NAV of Rs. 57.84 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 26.53, and based on its FY24 earnings, the P/E stands at 36.95. Thus, based on its recent financial data, the issue appears aggressively priced.

The company has reported PAT margins of 9.32% (FY23), 8.77% (FY24), 9.79% (FY25), and RoCE margins of 25.92%, 16.19%, 16.21%, respectively for the referred periods.

DIVIDEND POLICY:
The company has declared a dividend of 100% for FY23 / FY24 and 14% for FY25.  It has already adopted a dividend policy in March 2025, based on its financial performances and future prospects.

COMPARISON WITH LISTED PEERS:
As per offer document, the company has no listed peers to compare with.

MERCHANT BANKER’S TRACK RECORDS:
This is the 4th mandate from Marwadi Chandarana in the last two fiscals (including the ongoing one). From the last 3 listings, 1 opened at par and the rest with premium of 90% on listing date.