Umiya Mobile BSE SME IPO review (May apply)

•    The company is a player in multi-brand retail sector with major thrust on mobile and related accessories.
•    It marked growth in its top and bottom lines for the reported periods.
•    The company is operating in a highly competitive and fragmented segment.
•    Based on its recent financial data, the issue appears fully priced.
•    Well-informed/cash surplus investors may park funds for long term.

ABOUT COMPANY:
Umiya Mobile Ltd. (UML) is a player in the multi-brand retail sector, specializing in the sale of smartphones, mobile accessories, and consumer durable electronic products, etc. Over the years, the company has built a reputation as a trusted retailer offering a wide array of products from some of the global brands. Its product range includes the latest smartphones from Apple, Samsung, Realme, Xiaomi, Oppo, Vivo, Motorola, Google Pixel, Infinix etc. The company also offers consumer electronics, such as Smart TVs, Air Conditioners, Refrigerators, Coolers, and more, from brands like Sony, LG, Panasonic, Godrej and others.

The company operates a total of 149 stores across the state of Gujarat and 69 stores in Maharashtra and in One Union Territory of Dadra and Nagar Haveli and Daman and Diu, providing it a widespread geographic presence and accessibility to a large customer base. In line with its commitment to making its products accessible to a broader customer base, it offers credit/EMI facilities to customers through tie-ups with credit houses like banks and financial institutions. These financing options make it easier for customers to purchase quality mobile phones and electronics, enhancing the overall shopping experience and increasing accessibility.

To foster long-term relationships with customers, it also provides after-sales services for mobiles and other consumer durables. These services are available at both - owned stores and retail outlets, ensuring that its customers can rely on UML for maintenance, repairs, and support after their purchase. Furthermore, it ensures that all electronic products come with warranties from the respective manufacturers. In the event of a defect, it has established a seamless process with suppliers to ensure that customers receive free replacements or servicing, further reinforcing its commitment to quality and customer satisfaction. Almost 95% of its revenue comes from Mobile while the rest contributes around 5%. For FY25, it generated around 55.6% from its owned stores and the rest from retail outlets, and B2B format revenue was at 27.50% and the rest from B2C format.  As of March 31, 2025, it had 127 employees on its payroll.

ISSUE DETAILS/CAPITAL HISTORY:
The company is coming out with its maiden IPO of 3770000 equity shares at a fixed price of Rs. 66 per share to mobilize Rs. 24.88 cr. The IPO opens for subscription on July 28, 2025, and will close on July 30, 2025. The minimum application to be made is for 4000 shares and in multiple of 2000 shares thereon, thereafter. Post allotment, shares will be listed on BSE SME. The issue constitutes 26.51% of post-IPO paid-up equity capital of the company. The company is spending Rs. 3.61 cr. for this IPO process, and from the net proceeds of the issue, the company will utilize Rs. 19.00 cr. for repayment/prepayment of certain borrowings, and Rs. 2.27 cr. for general corporate purposes. Higher spending of Rs. 14.51% for the IPO process is a big surprise and raise concern.

The IPO is solely lead managed by Smart Horizon Capital Advisors Pvt. Ltd. (erstwhile Shreni Capital Advisors Pvt. Ltd.), while Bigshare Services Pvt. Ltd. is the registrar to the issue. Shreni group’s Shreni Shares Ltd. is the market maker. 

After issuing initial equity shares at par, the company issued bonus shares in the ratio of 18 for 1 in March 2025. The average cost of acquisition of shares by the promoters is Rs. 0.53 per share.

Post-IPO, company’s current paid-up equity capital of Rs. 10.45 cr. will stand enhanced to Rs. 14.22 cr. Based on the upper price band of the IPO, the company is looking for a market cap of Rs. 93.85 cr. 

FINANCIAL PERFORMANCE:
On the financial performance front, for the last three fiscals, the company has posted a total income/net profit of Rs. 333.55 cr. / Rs. 0.18 cr. (FY23), Rs. 451.58 cr. / Rs. 2.35 cr. (FY24), Rs. 601.28 cr. / Rs. 5.66 cr. (FY25). 

For the last three fiscals, the company has reported an average EPS of Rs. 3.49, and an average RoNW of 30.18%. The issue is priced at a P/BV of 4.93 based on its NAV of Rs. 13.38 as of March 31, 2025, and at a P/BV of 2.66 based on its post-IPO NAV of Rs. 24.79 per share.

If we attribute its FY25 super earnings on post-IPO expanded equity base, then the asking price is at a P/E of 16.58, and based on its FY24 earnings, the P/E stands at 40.00. Thus, based on its recent financial data, the issue appears fully priced.

The company has reported PAT margins of 0.05% (FY23), 0.52% (FY24), 0.94% (FY25), and RoCE margins of 8.27%, 20.58%, 27.64%, 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 performances and future prospects.

COMPARISON WITH LISTED PEERS:
As per offer document, the company has shown Bhatia Communications, Fonebox Retail, and Jay Jalaram Techno, as their listed peer. They are trading at a P/E of around 20.7, 21.4, and 22.1 (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 18th mandate from Horizon Management in the last three fiscals (including the ongoing one). From the last 10 listings, 3 opened at discount, 3 at par and the rest with premium ranging from 9.20% to 40% on listing date.