Simca Advertising IPO Review: Apply or Avoid?

As an investor, it can be very challenging to decide whether the Simca Advertising IPO is a good or bad investment. Not anymore, as in this blog, we will provide you with all the necessary details related to the Simca Advertising IPO to help you decide whether you should Apply or Not. Read on to know the IPO risks, strengths, valuation, financial details, and expert opinion to make your investment decision better. 

Simca Advertising IPO Review 

Strengths:

• With years of experience in delivering high-impact, result-driven OOH campaigns, the firm has expanded its diverse portfolio of 100+ premium media assets across major locations in Mumbai. 
• The company offers diverse advertising solutions, such as traditional out-of-home (“OOH”) advertising, Digital Out-of-Home (“DOOH”) advertising, and event sponsorships & Campaigns to enhance brand engagement.
• The firm creates targeted, high-impact OOH campaigns with advanced tools, real-time tracking, and innovation to maximize ROI for advertisers. 
• Its management team has over 20 years of experience in the Out-of-Home (OOH) advertising industry, promoting growth, innovation, and long-term success.

Weakness: 

• The company’s reputation depends on the SIMCA brand in Mumbai. Any damage to the SIMCA brand could negatively impact the business and its operations.
• The firm has ongoing litigation totaling ₹19.35 crore in GST matters, which could negatively affect the business.
• Around 44% of its revenue comes from its top 10 customers. And the firm does not have long-term relationships with those customers, meaning losing any of them or a client canceling the ad campaigns on short notice can adversely impact the business operations. 
• The OOH business depends on the availability of ad spaces. If these spaces become unavailable or expensive can affect the business and its performance. 

Promoters & Track Records, if any 

• Fahim Batliwala, aged 42 years, is the Promoter, Chairman, and Managing Director of the Company. He holds 87,98,944 Equity shares, representing 99.99% of Equity capital.
• Ashma Fahim Batliwala, aged 44 years, is the Promoter and Non-Executive Director of the Company. She holds 176 Equity shares, representing 0.002% of Equity capital.

Peer Comparison with the Company

Industry Peer Group P/E ratio 

The P/E ratio remained constant at 29.75, with the highest, lowest, and industry composite all at 29.75.

Expansion 

The IPO money, ₹12.72 crores, would be used for the Purchase and installation of LED (“Light-emitting diode”) screens, and ₹5.00 crores for funding for strategic collaboration with Capital World Media Services Private Limited (“CWM”) for monetisation of 20 LED digital advertising screens. 

From the money, ₹23.50 crores would be utilised for funding the incremental working capital requirements, and the rest of the money would be allocated for the general purposes. 

Simca Advertising IPO — Should You Apply or Not? 

First and foremost, Simca Advertising shows a gradual increment in profit. The advertising sector is also important, as marketing enhances the business’s overall growth, and investing in this might allow you to make a profit over the period. 

Coming to its valuations, the Simca Advertising IPO is valued at a P/E of 16.13x. When compared to the industry’s P/E, the IPO seems to be priced at fair and attractive valuations. As of May 6th, the GMP of the Simca Advertising IPO is ₹0. 

My Verdict: Sometimes, SME IPOs are good and able to provide the premium, but the market conditions are not good, so it can also impact the IPO’s result. Therefore, before making a long-term or moderate IPO investment decision, one must check the overall industry, company analysis, and other important factors. 

Please note: 

Investors are advised to make their own decisions and apply entirely at their own risk. This article is written using information from the company’s RHP (Red Herring Prospectus) data and online sources. If you have any queries, kindly contact the IPO Watch Team.