Moving Media NSE SME IPO review (May apply)

•    The company is engaged in renting camera and its peripheral equipments to its customers across the entertainment industry.
•    The company posted growth in its top and bottom lines for the reported periods.
•    However, boosted top and bottom lines for FY25 raise eyebrows and concern over sustainability in its net margins.
•    Based on recent financial data, the IPO appears fully priced.
•    It may witness first mover fancy post listing.
•    Well-informed investors may park funds for medium to long term.

ABOUT COMPANY:
Moving Media Entertainment Ltd. (MMEL) is a Camera, Lens and its peripheral equipment outsourcing company, engaged in providing end to end camera and lens equipment on a package rental basis in India. The company caters to the media and entertainment industry across the country. It specializes in providing comprehensive rental packages for high-quality production equipment, catering to small, medium, and large corporate clients in the entertainment industry.

MMEL’s inventory includes a wide range of cameras, lenses, lighting setups, sound equipment, and additional peripherals such as filters, grips, gimbals, and monitors. It takes effort to stock the latest models from top brands to ensure that clients have access to advance technology for their projects. Understanding that every project has unique requirements, it offers tailor-made package rental schemes designed to meet specific client needs. Its flexible rental solutions empower clients with the ability to access the latest and most advanced equipment within their budget. 

By choosing its packages, clients can maximize productivity, maintain cost efficiency, and achieve exceptional results. In the media industry, where the quality of visual and audio content is paramount, the demand for reliable, state-of-the-art equipment is ever-growing. MMEL’s services bridge this crucial gap by enabling production houses, freelance filmmakers, photographers, and other media professionals to access premium equipment rental packages without the substantial upfront investment required for purchase. This approach not only reduces the financial burden on clients but also ensures they stay competitive in an evolving market.

The company endeavour to build and maintain long-term relationship with clients by offering them the complete range of services under one roof at reasonable prices. Its product offerings are geared to meet the evolving needs of the clients while adding value to their businesses. Its client base is also diversified across various industries and geographies. Some of esteemed customers include names such as Star India Pvt. Ltd., Celebframe Entertainment Pvt. Ltd., Sunshine Pictures Limited, Colosseum Media Private Limited, SOL Production Private Limited, etc.

Over time, it has successfully expanded portfolio of camera and lens equipment solutions. The company actively seeks feedback from customers, enabling it to better understand their needs and innovate to provide improved solutions. Its sales and marketing efforts benefit greatly from word-of-mouth recommendations within user network, where the positive experiences of existing customers help it attract new clients at a lower acquisition cost.

MMEL’s revenue is generated primarily through rental fees, which are structured based on the duration of the rental and the type of equipment selected. Additional revenue streams include fees for delivery, setup, and premium support services, as well as customized rental packages for larger projects. It generally takes 50% advance or full advance from first time clients and as the repetition rate of clientele is close to 90%, the fees is normally received after the completion of project. As of March 31, 2025, it had 16 employees on its payroll and additional 6 technical staff as associates.

ISSUE DETAILS/CAPITAL HISTORY:
The company is coming out with its maiden book building route IPO of 6200000 equity shares of Rs. 10 each to mobilize Rs. 43.40 cr. at the upper cap. It has announced a price band of Rs. 66 – Rs. 70 per share. The issue opens for subscription on June 26, 2025, and will close on June 30, 2025. The minimum number of shares to be applied is for 2000 shares and in multiples thereon, thereafter. Post allotment, shares will be listed on NSE SME Emerge. The issue constitutes 32.97% of the post-IPO paid-up capital of the company. From the net proceeds of the IPO, it will utilize Rs. 25.00 cr. for Investment in advance camera solutions, Rs. 9.00 cr. for repayment/prepayment of certain debt, and the rest for general corporate purposes. 

The IPO is solely lead managed by Gretex Corporate Services Ltd., and Maashitla Securities Pvt. Ltd., is the registrar to the issue. GRETEX Group’s Gretex Share Broking Ltd. is a market maker as well as a syndicate member. The issue is underwritten to the tune of 50% each by Gretex Corporate Services and Gretex Share Broking.

The company has issued initial equity shares at par value, and issued further equity capital at a fixed price of Rs. 160 per share in August 2024. It has also issued bonus shares in the ratio of 100 for 1 in July 2024, and 5 for 1 in September 2024. The average cost of acquisition of shares by the promoters is Rs. 0.02, Rs. 3.32, and Rs. 10.69 per share. per share. 

Post-IPO, company’s current paid-up equity capital of Rs. 12.61 cr. will stand enhanced to Rs. 18.81 cr. Based on the upper price band of the IPO, the company is looking for a market cap of Rs. 131.64 cr. 

FINANCIAL PERFORMANCE:
On the financial performance front, for the last three fiscals, the company has (based on special purpose carved out combined statement) posted a total income/net profit of Rs. 13.36 cr. / Rs. 1.22 cr. (FY23), Rs. 16.47 cr. / Rs. 2.12 cr. (FY24), Rs. 29.01 cr. / Rs. 10.29 cr. (FY25). While as per restated statement of accounts, it marked total income/net profit of Rs. 7.68 cr. / Rs. 1.50 cr. (FY23), Rs.  23.38 cr. / Rs. 10.09 cr. (FY24), and Rs. 37.06 cr. / Rs. 10.40 cr. (FY25). 

The sudden boost in its bottom lines for FY24/ FY25 raise eyebrows and concern over its sustainability going forward. Perhaps the company has posted highest margins for the reported periods, in the industry. However, its borrowings of Rs. 41+cr. as of March 31, 2025, raises alarm.

For the last three fiscals, the company has reported an average EPS of Rs. 7.39 and an average RoNW of 58.74%. The issue is priced at a P/BV of 2.24 based on its NAV of Rs. 31.29 as of March 31, 2025, but its post-IPO NAV data is missing from offer documents.

If we attribute FY25 super earnings on post-IPO fully diluted equity capital, then the asking price is at a P/E of 12.66. Based on FY24 earnings, the P/E stands at 13.04. The issue relatively appears fully priced.

For the reported periods, the company has posted PAT margins of 19.50% (FY23), 43.15% (FY24), 28.05%, (FY25), and RoCE margins of 59.15%, 53.43%, 18.49%, 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 no listed peers to compare with. It may witness first mover fancy post listing.

MERCHANT BANKER’S TRACK RECORD:
This is the 18th mandate from Gretex Corporate in the last three fiscals including the ongoing one.  From the last 11 listings, 2 listed at discount and the rest with a premium ranging from 0.04% to 187.36%, on the listing date.