Review By Dilip Davda on May 24, 2013
Soon after Just Dial IPO, we have yet another BSE SME platform IPO from India Finsec Ltd. Details of the same are as under:
India Finsec Ltd. (IFL) got its NBFC Registration in 2002. Since then it is in the business of providing short term as well as longer duration loans and advances in the North Indian region. IFL is a Non Deposit taking Non-systemically Important Non Banking Finance Company (NBFC-ND-NSI) engaged primarily in the business of advancing loans and investing/trading in securities. It has been running on a modest operating scale till 2012, however, after the induction of new directors, it has commenced a process of improving its internal systems including but not limited to Trading Strategies, Financial Discipline and better utilization of its fund based portfolio.
Now the company plans to set up new office space for its HQ and also generate general corpus fund, it is coming out with an IPO for Rs. 6 crore by offer of 6000000 equity share of Rs. 10 each at par value. Issue opens for subscription on 24.05.13 and will close on 28.05.13. Minimum application is to be made for 10000 shares and in multiples thereof, thereafter. The shares will be listed on BSE SME exchange post allotments. Aryaman Financial Services Ltd is the sole manager and Skyline Financial Sravices Pvt Ltd. is the registrar to the issue.
On performance front, the company has posted an average EPS of Rs. 0.31 for last three fiscals. For first nine months ended 31.12.12 it has earned net profit of Rs. 1.26 crore on a total income of Rs. 3.37 crore. It issued shares at a price of Rs. 200 per share between 2007-2011 that helped it to issue bonus in the ratio of 6 for 1 in May 2012 and inflated NAV of Rs. 22.07 as on 31.12.12. Its equity of Rs. 13.44 crore will rise to Rs. 19.44 crore post this issue. This will reduce its NAV to Rs. 17.82 but P/E will go further up from 32.26 based on its average basic EPS on old equity.
As far as Merchant Banker’s track record is concern, they have managed six IPOs with two main line and four SME. IN two main line, one issue failed to give listing gains, and for SME IPOs, thanks to market making, they could manage listing gains in three and in one the debut was at offer price.
Although the issue is at par value, it is not worth considering as minimum investment needed is Rs. 1 lakh and the ongoing fate of 2050 illiquid stocks and the thin volume of SME counters.
Review By Dilip Davda on May 24, 2013
Dilip Davda is a veteran financial journalist associated with the Indian stock market since 1978. He has been contributing to print and electronic media on capital markets, insurance, and finance since 1985.
He is widely recognized for reviewing public issues and non-convertible debentures (NCDs) in the primary market. Drawing on over three decades of market experience and close interaction with merchant bankers, his reviews focus on detailed fundamental and financial analysis of companies, with a special emphasis on SME public issues.
Dilip Davda
SEBI Registered Research Analyst – Mumbai
Registration No.: INH000003127 (Perpetual)
Email: dilip_davda@rediffmail.com
Disclaimer: The information provided herein is solely for educational and informational purposes and does not constitute an offer, solicitation, or recommendation to buy or sell any securities. Readers are advised to consult a qualified financial advisor before making any investment decisions. Investments in the securities market are subject to market risks. The author does not intend to invest in the securities discussed.
The initial public offer (IPO) of India Finsec Ltd. offers an early investment opportunity in India Finsec Ltd.. A stock market investor can buy India Finsec IPO shares by applying in IPO before India Finsec Ltd. shares get listed at the stock exchanges. An investor could invest in India Finsec IPO for short term listing gain or a long term.
Read the India Finsec IPO recommendations by the leading analyst and leading stock brokers.
India Finsec IPO offers an opportunity to buy IPO shares before they get listed at the stock exchanges. Read the India Finsec IPO Notes, Analysis and Recommendations by leading stock brokerage firms and experts mentioned in the above answer to "How is India Finsec IPO?"
Our recommendation for India Finsec IPO is to avoid.
As per the analysis by our lead analyst Mr. Dilip Davda, we suggest you to avoid the India Finsec IPO.
The India Finsec IPO allotment status will be available on or around [.]. The allotted shares will be credited in demat account by [.]. Visit India Finsec IPO allotment status to check.
