Repono BSE SME IPO review (May apply)

•    The company is engaged in offering warehousing and liquid terminal services.
•    It is operating in a highly competitive and fragmented segment.
•    The company posted growth in its top and bottom lines for the reported periods.
•    It has emptied the coffin before IPO by way of liberal bonus issues.
•    Based on recent financial data, the issue appears fully priced. 
•    Well-informed investors may park funds for medium to long term.

ABOUT COMPANY:
Repono Ltd. (RL) is a Company that specializes in offering warehousing and liquid terminal services to India's oil and petrochemical sector. ‘Repono’ is a Latin verb that has multiple meanings including “to put back”, “to restore”, “to store”, and “to repeat”. The company that was primarily engaging in the business of warehousing services for various industries for Oil, Gas, Petrochemicals, Lube Oil and Specialty Chemicals across PAN India and gradually moving towards Global Expansion. 

It provides a 360-degree solution for the storage of critical petroleum products. The company provides its clients consultancy, engineering, Operation and Maintenance (O&M) and value-added logistics services. It serves some of the top Oil and Petrochemical Companies in India, The Company has been recognised as one of the leading service providers for the warehousing and oil terminating sector in India. The company provides regular consulting services to a large German petrochemical Company, is the world’s largest FFS machinery supplier. RL is providing series across the Oil value chain. It is doing O&M of the (a) Crude Oil Terminal facility for one of the government-owned enterprise engaged in oil sector. The company is also handling (b) Petro, Diesel, ATF and Ethanol for from one of the largest crude oil and natural gas producer. It also handles the very prestigious off-site terminal for Public Sector Enterprise. It is also into O&M of petrochemical warehousing and its customers belongs to crude oil and natural gas industry, Public Sector Enterprise and others. It is operating in a highly competitive and fragmented segment.

RL is doing the O&M of the FFS packaging line. FFS is the most advanced polymer packaging machine in the world. The Company provides O&M service of the FFS bagging line in India which gives them edge over their competitors. The company has also forayed into the O&M of the Lube Oil Blending plant and warehousing for IOCL at Chennai. IOCL’s Lube Plant at Chennai is Asia’s largest Lube Oil plant and one of the most prestigious projects in the Lube oil sector in India. Its revenue from domestic market is around 95% and the rest from global services. As of April 30, 2025, it had 539 employees on its payroll.

ISSUE DETAILS/CAPITAL HISTORY:
The company is coming out with its maiden IPO of 2779200 equity shares to mobilize Rs. 26.68 cr. The company has announced a price band of Rs. 91 – Rs. 96 per share of Rs. 10 each. The IPO opens for subscription on July 28, 2025, and will close on July 30, 2025. The minimum application to be made is for 2400 shares and in multiple of 1200 shares thereon, thereafter. Post allotment, shares will be listed on BSE SME. The issue constitutes 27.04% of post-IPO paid-up equity capital of the company. From the net proceeds of the issue, the company will utilize Rs. 9.50 cr. for working capital, Rs. 7.24 cr. for capex on purchase of forklift, hand pallet trolley etc., Rs. 1.60 cr. for capex on warehouse racking system, Rs. 1.05 cr. for development of software for warehouse management, and the rest for general corporate purposes.

The IPO is solely lead managed by Wealth Mine Networks Pvt. Ltd., while Cameo Corporate Services Ltd. is the registrar to the issue. JSK Securities & Services Pvt. Ltd. is the market maker as well as a syndicate member. However, the market maker name is missing from the info given on page nos. 65 to 67.

After issuing initial equity shares at par, the company issued bonus shares in the ratio of 49 for 1 in November 2020, 4 for 1 in December 2022, and 2 for 1 in July 2024.  Thus, it has emptied the coffin before IPO. The average cost of acquisition of shares by the promoters is Rs. NIL per share. 

Post-IPO, company’s current paid-up equity capital of Rs. 7.50 cr. will stand enhanced to Rs. 10.28 cr. Based on the upper price band of the IPO, the company is looking for a market cap of Rs. 98.68 cr. 

FINANCIAL PERFORMANCE:
On the financial performance front, for the last three fiscals, the company has (On a consolidated basis for FY23 and Standalone basis for FY24 and FY25) posted a total income/net profit of Rs. 13.02 cr. / Rs. 0.52 cr. (FY23), Rs. 34.14 cr. / Rs. 4.18 cr. (FY24), Rs. 51.59 cr. / Rs. 5.15 cr. (FY25). It has posted growth in its top and bottom lines for the reported periods. Many folds jump in bottom lines from FY24 onwards raises eyebrows.

For the last three fiscals, the company has reported an average EPS of Rs. 5.41, and an average RoNW of 35.26%. The issue is priced at a P/BV of 5.06 based on its NAV of Rs. 18.96 as of March 31, 2025, but its post-IPO NAV data is missing from 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 19.16, and based on its FY24 earnings, the P/E stands at 23.59. Thus, based on its recent financial data, the issue appears aggressively priced.

The company has reported PAT margins of 4.00% (FY23), 12.30% (FY24), 10.07% (FY25), and RoCE margins of 11.99%, 46.62%, 38.39%, respectively for the referred periods.

DIVIDEND POLICY:
The company has not declared any dividends since incorporation. 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 Aarvi Encon, Aegis Logistics, TVS Supply Chain, as their listed peer. They are trading at a P/E of around 15.5, 39.8, and NA (as of July 24, 2025). However, they are not truly comparable on an apple-to-apple basis.

MERCHANT BANKER’S TRACK RECORDS:
This is the 1st mandate from Wealth Mine in the ongoing fiscal. It has no past track records.