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Pace E-Commerce Ventures Limited IPO

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About :

Pace E-Commerce Ventures Limited, a 2015 incorporation, sells furniture, bedding, accessories, and household goods for kids. The company’s product line includes Scooters and Ride-Ons, Dolls, Action Figures, Soft Toys, Seating and Lounging, Storage & Organisers, Playroom Furniture, Bins and Baskets, Décor and Accessories, Kids Bedding, Baby Bedding, Baby & Kids Essentials, Baby & Kids Essentials, Baby & Kids Essentials, and Baby & Kids Essentials. It also includes Beds and Cribs, Seating and Lounging, Storage

The business operates the online store www.cotandcandy.com, which offers a wide variety of goods in many categories. The business also began to fulfil numerous requests for both B2C and B2B customers’ on-demand printing and product manufacturing needs.

Some of the most well-known and recognisable companies in the kids entertainment industry sold their production and distribution licences to Pace E-Commerce Ventures Limited.

Strengths : 

  1. Agreements with well-known businesses that support children.
  1. Team lead by the founder
  1. Insights from the company regarding Indian consumers and retailers.

Details on IPO :

On September 29, 2022, the Pace E-Commerce Ventures Initial Public Offering will begin and end. The bid period for Pace E-Commerce Ventures’ IPO is from September 29, 2022, at 10:00 A.M. through October 4, 2022, at 5:00 P.M. On the day of the issue’s conclusion, at 5 PM, UPI Mandate confirmation must be received.

1200 shares make up the Pace E-Commerce Ventures IPO lot. An individual retail investor may submit an application for up to 1 lot (1200 shares, or 123,600 Rs.).

Objective of the Issue :

1. Purchasing of equipment and machinery

2. Need for working capital

3. Overarching Corporate Goals

4. Meeting expenses related to Public issues

IPO Review:

  1. PEVL is an online marketplace for kids’ clothing, sports equipment, and other items.
  1. Its financial performance thus far is pitiful.
  1. Selling stakeholders desire financial gain through OFS in this matter.
  1. The issue is overpriced based on FY22 earnings.
  1. It is safe to skip this expensive IPO.

Preface :

Recently, some businesses that qualify for a mainboard IPO have chosen, at the urging of Lead Managers, to go the SME IPO path. Market sources claim that this is only being done to reduce the cost of the IPO procedure and to control the screen after listing in order to accomplish their goals. We can see that this third business is following in the footsteps of QMS Medical and Swastik Pipe. They are requesting mainboard aspirant valuations as they enter the SME platform.

Financial Performance : 

In terms of financial performance, PEVL has disclosed turnover/net profits for the previous three fiscal years of Rs. 1.50 crore/Rs. 0.003 crore (FY20), Rs. 1.72 crore/Rs. 0.07 crore (FY21), and Rs. 10.54 crore/Rs. 0.54 crore (FY22). Thus, both its top and bottom lines have seen substantial growth. However, in comparison to the magnitude of the IPO and the asking price, its top and bottom line scale is negligible.

PEVL has reported average EPS of Rs. 0.82 and average RoNW of 1.90% over the past three fiscal years. According to its NAV of Rs. 14.46 as of March 31, 2022, and according to its post-IPO NAV of Rs. 31.02 per share, the issue is valued at a P/BV of 7.12 and a P/BV of 3.32, respectively.

Dividend Policy :

In accordance with the disclosed periods in the offer document, the company has neither declared or paid any dividends. Following the IPO, it will implement a conservative dividend policy based on its financial performance and prospects for the future.

Conclusion :

PEVL is an online retailer of children’s clothing, sports equipment, and other items. The company hasn’t performed financially in a way that justifies the price. Although it is suitable for a mainboard IPO, there are questions about its ambitions for the SME platform. The issue is overpriced based on FY22 earnings. Simply stay away from this IPO to protect your hard-earned cash.

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