TLDR;
Alright, so this is a review of upcoming IPOs for the week of September 1st by Sunday Investing. They're looking at five companies: Snehaa Organics, Sugs Llyod, Optivalue Tek Consulting, Amanta Healthcare, and Goel Construction. The panel emphasizes that this isn't financial advice, just their opinions, and everyone should do their own research. Key takeaways include concerns about inflated financials, high valuations, and the overall quality of the IPOs this week.
- Not a financial advice, just opinion
- Concerns about inflated financials and high valuations
- Overall quality of IPOs is not great
Opening Remarks [0:00]
Manish from Sunday Investing kicks off the session, joined by Sachin and Rohit, to discuss upcoming IPOs. Yas and Tay are traveling and won't be participating. Manish mentions that the upcoming IPOs aren't particularly large or exciting, and with the market being a bit choppy, premiums might be lower. The team will provide a fundamental review of each company, keeping it concise due to time constraints. He stresses that they are not SEBI registered, so their opinions aren't qualified advice, and everyone should do their own due diligence.
Snehaa Organics (SME) [2:35]
Snehaa Organics, established in 2017, operates in solvent recovery, providing sustainable solutions by collecting and purifying spent solvents. The IPO is about ₹32 crore, with a post-issue market cap of ₹124 crore, diluting around 27-28%. FY25 financials show a revenue of ₹26.3 crore and a PAT of ₹7.3 crore, resulting in a high PAT margin of 30%. The company is valued at around 18x PE. Sachin adds that the company is based in Telangana and started as a family trading business before transitioning into solvent purification. They act as a mediator between companies producing and using solvents, with 50% of their production coming from acetone and ethyl acetate. They claim over 80% repeat orders, catering to pharmaceutical industries due to their location in Hyderabad.
Sachin points out that while their EBITDA margins have significantly increased in the IPO year, raw material expenses haven't risen proportionally, which is questionable. Cash from operations hasn't increased in line with profits. Risks include modest growth, dependence on dealers offering low margins, and the director's involvement in similar group companies without a non-compete agreement. Employee attrition is also high, and there have been frequent auditor changes. Sachin concludes that the valuation seems high, especially considering FY24 figures, and the lead manager's track record isn't great.
Sugs Llyod (SME) [12:26]
Sugs Llyod, incorporated in 2009, is a technology-driven EPC player specializing in renewable energy (solar) and electrical transmission & distribution, recently moving into civil EPC. The IPO is ₹86 crore, entirely a fresh issue, with a post-issue market cap of ₹286 crore, diluting about 30%. FY25 financials show a revenue of ₹178 crore and a PAT of ₹17 crore, resulting in a 10% PAT margin. The company is coming at a trailing PE of 15-16x. Rohit describes it as another EPC business, which he finds a bit tiring. They mainly do rooftop solar work with the government and entry-level electrical EPC work. They have a product called a fault passage indicator, which they claim competes with major players like Schneider.
Rohit notes that while the company has shown significant growth, their cash flows and balance sheet are poor, with high receivables and negative cash flows. He mentions a decent order book, which has increased to ₹420 crore recently. The company is coming at 17x FY25 earnings and potentially 10x FY26 earnings based on projections. Despite reasonable valuations compared to peers like Oriana, Rohit is personally avoiding the IPO due to his fatigue with EPC businesses. He also points out that the limited anchor participation and the new lead manager make the situation slightly iffy.
Optivalue Tek consulting (SME) [23:10]
Optivalue Tek Consulting, incorporated in 2011, is a digital technology consulting company specializing in enterprise modernization and digital transformation. It has a global presence with offices in Bangalore, Texas, and New South Wales, Australia. The IPO is ₹52 crore, entirely a fresh issue, with a post-issue market cap of ₹197 crore, diluting 26%. FY25 financials show a revenue of ₹56 crore and a PAT of ₹12 crore, resulting in a high 20% PAT margin. The company is coming at a trailing PE of 16x FY25. Sachin explains that Optivalue Tech offers a range of IT services, including system implementation, cloud solutions, and enterprise applications. They specialize in application integration through API management and cloud solutions, with plans to enter video and image analytics for drones and railways.
Sachin mentions that the company has a CMMI level 5 certification and a current order book of ₹50 crore. IPO proceeds will be used for new product development, IT infrastructure upgrades, and a new Bangalore office. Revenues fell in FY24 due to a vendor delay but rebounded in FY25 with increased margins. Risks include high reliance on system integrators, the need for railway approvals for analytics projects, and high employee attrition. The IPO is priced at around 16 times trailing earnings, which is higher compared to peers.
Amanta Healthcare (Mainboard) [32:07]
Amanta Healthcare, incorporated in 1994, is a pharmaceutical company specializing in sterile liquid products, particularly parental products in plastic containers. The IPO is ₹126 crore, entirely a fresh issue, with a post-issue market cap of ₹489 crore, diluting 25%. FY25 financials show a revenue of ₹276 crore and a PAT of ₹10.5 crore, resulting in a 4% PAT margin. The company is coming at a high PE of 45-47x. Sachin adds that Amanta Healthcare is based in Gujarat and specializes in sterile liquid parental products, with 47 products across six segments. They have WHO GMP certification and export to 47-48 countries.
Sachin highlights their flagship brand, Steriport, a two-port IV fluid container used in oncology, which they launched in 2016. Steriport is growing at 15-20% CAGR and commands higher pricing. IPO proceeds will be used for expanding the Steriport facility and small volume parental line capacity. The company faced a loss in FY23 due to a one-time tax write-off and revenue decline post-COVID. Debt has been high, and promoters have pledged 25% of their holdings. The company also faced a case in 2013 for supplying substandard products, leading to a name change from Mark Parentals. They also failed to obtain US FDA approval. The IPO is priced steeply at 46 times trailing earnings.
Goel Construction company (SME) [43:26]
Goel Construction, incorporated in 1997, is an infrastructure player specializing in the construction of cement plants, power plants, and other industrial facilities. As of June 30, 2025, the company is executing 14 ongoing projects across eight states, supported by an order book of ₹597 crore. The IPO is ₹100 crore, with ₹81 crore fresh issue and ₹19 crore offer for sale, with a post-issue market cap of ₹380 crore, diluting around 26-27%. FY25 financials show a revenue of ₹594 crore and a PAT of ₹38 crore, resulting in a 6-7% margin. The company is coming at a PE of 10x trailing. Sorabh mentions that Goel Construction is a fairly simple business specializing in cement plant construction.
Sorabh notes that the company has a good track record and an impressive client list, including major players in the cement industry. Revenues have been growing well, and they have a good order book. IPO funds will be used for capex and repayment of loans. There are two civil cases and some tax demands, which are potential red flags. The company is coming at a PE of 10x trailing, and the lead manager has a good track record. Overall, Sorabh finds the valuation low but the business itself not particularly exciting.
Closing Remarks [51:13]
Manish summarizes the reviews of the five companies, noting that none of the issues are particularly exciting this week. Rohit mentions that Sugs Llyod is the only one where there's a chance of something happening and will keep his options open. The panel agrees that the quality of IPOs hasn't been great recently, with most being "me too" businesses that aren't performing well. They hope that the lower valuations of some companies like Goel Construction might provide some pop. The team will continue to post their reviews as things evolve.