BE CAREFUL BEFORE YOU SUBSCRIBE FOR THE IPO OF RAJNISH WELLNESS LTD:-KNOW SOME HARD FACTS BEFORE YOU DECIDE TO INVEST.

Objects of the Rajnish Wellness Limited IPO:

Objective of

Rajnish Wellness Limited IPO

are:

1. Funding of working capital requirements of Company.

2. Funding of Branding and Advertisement expenses

4. To meet the expenses of the Issue

3. To meet General corporate purposes

DRHP

Listing Date: Jul 05 2018

Rajnish Wellness Limited IPO Details:

Open Date:	Jun 25 2018
Close Date:	Jun 27 2018
Total Shares:	12,61,200
Face Value:	₹ 10 Per Equity Share
Issue Type:	Fixed Price Issue
Issue Size:	11.9814 Cr.
Lot Size:	1200 Shares
Issue Price:	₹ 95 Per Equity Share
Listing At:	BSE SME
Listing Date:	Jul 05 2018

Promoters And Management:

Promoters of Rajnish Wellness Limited Company are: (i) Mr Rajnishkumar Surendraprasad Singh aged 32 years the Managing Director of the Company. He is Graduate from Patna University in the year 2007 and has knowledge in the field of Manufacturing of Ayurvedic Products, dealing in the e-commerce industry and in the field on an advertisement. He is having more than 9 years of experience in the area of management, marketing and administration.

Company Business:

Company's Business Model i) First , the Company Rajnish Wellness Limited buy their product from different manufacturers. (ii)Then they distribute their products to market through 50 distributors across the states like Maharasthra,Uttar Pardesh, Karnataka, Bihar, Odisha, Delhi, Jharkhand,Madhya Pradesh, Uttarakhand, Haryana and West Bengal. (iii)Finally, the product reaches to the customer through medical store. Recently they have tied up with different e-commerce companies like snapdeal.com, indiamart.com, clickoncare.com, lovenaturalremedies.com, ayurvedmart.com and fineyog.com etc. to sell their products.

Risk Involves in Rajnish Wellness Limited

i) The Company is operating four offices from Mumbai ( Corporate Office, Accounts Officer, Call Center and Customer Desk) from the same building on lease period ranging 2-3 years. Do not own any office till date.

ii) The Company does not have any production facility of their own and same has been outsourced from third party for manufacturing their branded products.

iii)The Company is using certain photographs of some person(s) on their few products for which the Company has not obtained any NOC or approval for using such photographs in their few product, any objection in this regard may affect their goodwill.

iv) As on date of filing the DRHP, the company has 78 employees but all are on contract basis.

v) The company advances have been shoot up to 2.61 Cr in FY18 from 48 Lacs to previous year. – Red Flag.

vi) The Company’s Debtor days have gone up from 59 days in FY17 to 178 days in FY18. This may be possible that sales have been inflated before the IPO.- Red Flag.

vii) As on 11FY18, the company has long term debt of 2.07 Cr and Short Term Debt of 1.85 Cr. The company does not own any office and no manufacturing unit then why company has taken long term loan was not mentioned anywhere.- Red Flag.

viii) As on 11FY18, the Company has Fixed Asset of only 10 Lacs- Red Flag

ix) Profit after tax has gone up from 63 Lacs in FY17 to 1.62 Cr in FY18 on flat revenue growth raises concern and it may be possible case of window dressing just before the IPO. The Company has cut down the other expense from 15 Cr in FY17 to 10 Cr in FY18 may be to inflate profit.

x) The Company has issued 22,50,000 shares @Rs 10 and 1,62,500@20 via Right Issue to the promoters and their related parties in the month of Feb 2018 i.e. Just before the IPO which raises concern as the cost of acquisition was only Rs.10 and Rs 20 while IPO is coming at Rs 95.

xi) The company has very limited history of 3 years as it founded only in 2015 to make out any investment strategy here.

 

Capital Structure:

(i) Authorized Share Capital 70,00,000 shares at FV@10)	7 Cr
(ii) Issued, Subscribed,& Paid-up Share Capital Before Issue (34,12,500  Shares at FV@10)	3.412 Cr
(iii) Present Issue (  12,61,200 Shares at FV@10)	1.2612 Cr
(iv) Reservation for Market Maker  ( 63,600 Shares at FV@10)	6.3 Lacs
(v) Net Issue to Public 12,61,200 -63,600=  1197600 Shares)	1.197 Cr
(vi) QIB & HNI quota-5,98,800	50%
(vii) Retail Quota - 5,98,800	50%
(viii) Paid Up Share Capital after the issue	4.6732

Financials of Rajnish Wellness Limited IPO as per DRHP:

1. Assets and Liabilities Key Parameters
Year	Asset(lacs)	Liabilities(lacs)	Net Worth(lacs)	Book Value	D/E [<1.5]	RONW	Receivable days
FY16	530.35	493.00	37.35	75	13.2	87%	57
FY17	837.92	736.70	101.22	202	7.3	63%	59
11MFY18	1782.44	1,261.85	520.59	15	2.4	31%	178

2. Profit n Loss Key Parameters
Year	Revenue(lacs)	PAT(lacs)	EBITDA Margins	Profit Margins	Outstanding Shares(lacs	EPS
FY16	1315.88	32.34	4%	2%	0.50	64.68
FY17	2529.63	63.87	5%	3%	0.50	127.74
11MFY18	2423.22	161.87	13%	7%	34.13	4.74

3. Cash Flow Statement(all figures in lacs)
Particulars	FY18	FY17	FY16
(i) Net Cash Generated from Operation	-301.94	-167.29	54.29
(ii) Net Cash Generated from Investment	-10.81	-3.95	-2.13
(iii) Net Cash Generated from Financing Activity	333.17	131.44	5
(iv) Total[ (i)+(ii)+(iii) ]	20.42	-39.8	57.16

Comparison With Peers:

The Company does not have any peers in the market to compare.

Recommendation on Rajnish Wellness Limited IPO:

Review and Recommendation of

Rajnish Wellness Limited IPO

from our side is: Rating: 2/10. 1-5: Fair 5-7: Good 7-10: Excellent

Lead Manager of Rajnish Wellness Limited IPO:

1. Navigant Corporate Advisors Limited

Registrar of Rajnish Wellness Limited IPO:

1. Bigshare Services Private Limited

Company Address:

Rajnish Wellness Limited 610L, 6th Floor, Building No. 3, Navjivan Commercial Premises Society Limited, Lamington Road, Mumbai Central (East), Mumbai - 400 008 Phone No. + 91-22-23065555 Email: info@rajnishwellness.com Website: www.rajnishwellness.com