Studio LSD NSE SME IPO review (Not Rated)

•    The company runs multi-media production house for providing content on various TV channels.
•    It has revised upward its price band for the IPO within 3 days of announcement.
•    The company marked growth in its top and bottom lines and surge in bottom lines from FY24 onwards.
•    Based on its recent financial data, the issue appears aggressively priced.
•    There is no harm in skipping this “High Risk/Low Return” pricey bet.

PREFACE:
This company at the first instance announced a price band of Rs. 48 - Rs. 51 per share of Rs. 2 to mobilize Rs. 70.13 cr. at the upper cap (Refer Business Standard (Hindi) of August 12, 2025 on page no. 10) and thereafter revised its price band upward to Rs. 51 – Rs. 54 per share of Rs. 2 to mobilize Rs. 74.25 cr. (Refer Business Standard (Hindi) of August 14, 2025, on page no. 08). Thus, at the first place, it missed the transparency about its pricing. Should one subscribe to such IPO? According to the management, this has happened due to oversight mistake by its Lead Manager. But then, due to this mistake, it appears that management is penalizing the investors across the board with higher price.

ABOUT COMPANY:
Studio LSD Ltd. (SLL) where LSD stands for Laxmi Saraswati and Durga, is a multimedia production house specialising in original and captivating stories, partnering with artists from the film and televisions industry. It is involved in every aspect of the content-making process, from idea to distribution and financing the projects, hiring actors and crew members, scouting locations, creating sets, managing the budgets, and overseeing the entire production and post-production process.

SLL is a production house specialised in creating compelling television content across various genres. With a dedicated team of creative professionals and advanced production facilities, it offers a comprehensive range of services tailored to meet the diverse needs of broadcasters and streaming platforms.

The company has gained prominence within the television industry, particularly in producing soap opera content. It is always committed to delivering quality television programs and have effectively carved out a niche for itself across multiple television channels. Its expertise lies in crafting compelling narratives and engaging storylines that captivate audiences, in the competitive world of soap opera production. Across various television channels, the company has consistently produced shows, showcasing its expertise in storytelling and entertainment. The company operates as a full-fledged production house, specializing in developing a wide array of show concepts through collaboration with talented team and network of skilled scriptwriters.

SLL embraces a collaborative approach to every project, partnering closely with clients to deeply understand and fulfil audience needs. Its team of experienced professionals and creative minds are committed to delivering quality work, on time and within budget, ensuring every project brings compelling stories to life. The company’s mission is to create quality, engaging content across television and OTT platforms. SLL’s goal is to captivate audiences through compelling storytelling and innovative productions, striving value in every project it undertakes. As of the date of this RHP, it had 16 employees on its payroll.

ISSUE DETAILS/CAPITAL HISTORY:
The company is coming out with its maiden book building route combo IPO of 13750000 equity shares of Rs. 2 each to mobilize Rs. 74.25 cr. at the upper cap. It has announced a price band of Rs. 51 – Rs. 54 per share. The issue consists of 11000000 fresh equity shares (worth Rs. 59.40 cr. at the upper cap), and an Offer for Sale (OFS) of 2750000 equity shares (worth Rs. 14.85 cr. at the upper cap). The issue opens for subscription on August 18, 2025, and will close on August 20, 2025. The minimum number of shares to be applied is for 4000 shares and in multiples of 2000 shares, thereafter. Post allotment, shares will be listed on NSE SME Emerge. The issue constitutes 26.50% of the post-IPO paid-up capital of the company. From the net proceeds of the IPO, it will utilize Rs. 18.00 cr. for capex, Rs. 24.92 cr. for working capital, and the rest for general corporate purposes. 

The IPO is solely lead managed by Corpwis Advisors Pvt. Ltd., while Purva Sharegistry (India) Pvt. Ltd., is the registrar to the issue. Rikhav Securities Ltd. is a market maker. The issue is underwritten to the tune of 85% by Aftertrade Broking Pvt. Ltd. and 15% by Corpwis Advisors Pvt. Ltd.

The company has issued entire initial equity shares at par value, the company has issued bonus equity shares in the ratio of 400 for 1 in July 2024, and 7 for 10 in November 2024. The average cost of acquisition of shares by the promoters/selling stakeholders is Rs. Negligible per share. 

Post-IPO, company’s current paid-up equity capital of Rs. 8.18 cr. will stand enhanced to Rs. 10.38 cr. Based on the upper price band of the IPO, the company is looking for a market cap of Rs. 280.22 cr. 

FINANCIAL PERFORMANCE:
On the financial performance front, for the last three fiscals, the company has posted a total income/net profit of Rs. 46.71 cr. / Rs. 2.80 cr. (FY23), Rs. 102.50 cr. / Rs. 10.90 cr. (FY24), Rs. 105.01 cr. / Rs. 11.67 cr. (FY25). Quantum jump in its bottom lines from FY24 raise eyebrows. 

For the last three fiscals, the company has reported an average EPS of Rs. 2.43 and an average RoNW of 74.86%. The issue is priced at a P/BV of 8.02 based on its NAV of Rs. 6.73 as of March 31, 2025, and at a P/BV of 3.16 based on its post-IPO NAV of Rs. 17.07 per share (at the upper cap).

If we attribute FY25 super earnings on post-IPO fully diluted equity capital, then the asking price is at a P/E of 24.00. Based on FY24 earnings, the P/E stands at 25.71. Thus, the issue appears aggressively priced.

For the reported periods, the company has posted PAT margins of 5.99% (FY23), 10.64% (FY24), 11.17%, (FY25), and RoCE margins of 74.29%, 92.44%, 57.29%, respectively for the referred periods. 

DIVIDEND POLICY:
The company has not paid any dividends for the reported periods of the offer document. It has adopted a dividend policy in October 2024, based on its financial performance and future prospects.

COMPARISION WITH LISTED PEERS:
As per the offer document, the company has shown Baweja Studio, PicturePost Studio, as their listed peers. They are trading at a P/E of 13.0, and 11.6 (as of August 14, 2025). However, they are not truly comparable on an apple-to-apple basis. 

MERCHANT BANKER’S TRACK RECORD:
This is the 6th mandate Corpwis Advisors in the last three fiscals including the ongoing one.  Out of the last 5 listings, 1 opened at discount, 1 at par, and the rest with premium ranging from 0.13% to 10.53% on the date of listing. Thus, it has an average performance.