Review By on March 6, 2017
IFL Enterprises Ltd (IFL) is a subsidiary of India Finsec Limited, and represents the other business activities of the group. IFL is engaged in the business of corporate advisory, debt syndication and execution services with paramount focus on small and medium enterprises (SMEs) in corporate and non-corporate sector. Further the company is also involved in the business of trading in textile products primarily fabrics. It has obtained Direct Selling Agency (DSA) of PNB Housing Finance, Tata Capital Housing Finance Limited, and IDFC Bank and is in process of obtaining DSA for ICICI Bank, Axis Bank, IDBI Bank and India Bulls. Due to these DSAs and company's strong network amongst the debt finance market; it mentors and helps small and medium enterprises to raise banking and institutional finance.
To part finance its repayment of unsecured loans and raise general corpus fund, the company is coming out with a maiden IPO of 1626000 equity share of Rs. 10 each at a fixed price of Rs. 20 per share to mobilize Rs. 3.25 crore. Issue opens for subscription on 07.03.17 and will close on 10.03.17.Minimum application is to be made for 6000 shares and in multiples thereon, thereafter. Post allotment, shares will be listed on BSE SME. Issue is solely lead managed by Aryaman Financial Services Ltd and Skyline Financial Services Pvt Ltd is the registrar to the issue. The company has issued MoU equity at par with a face value of Re. 1 and then at a price of Rs. 40 per share (Re. 1 FV) in March 2009. In March 2016 it issued equity with a FV of Rs. 10 at a price of Rs. 25 per share. It has also issued bonus shares in the ratio of 12 for 1 in February 2016 and in the ratio of 1 for 4 in October 2016. Its current paid up equity capital of Rs. 1.38 crore will stand enhanced to Rs. 3.00 crore post issue.
On performance front, the company has posted revenue/net profits of Rs. 0.08 cr. / Rs. 0.002 cr. (FY14), Rs. 0.8 cr. / Rs. 0.004 cr (FY15) and Rs. 0.39 cr. / Rs. 0.13 cr. (FY16). For first six months of the current fiscal it has posted net profit of Rs. 0.09 crore on a revenue of Rs. 1.86 cr. If we annualize these earnings and attribute to fully diluted equity post issue, then asking price is at a P/E of 33 plus compared to peers trading around 11 P/E and thus making it a costly bet.
On merchant banker's front, in last three years till date this is the 12th mandate and earlier mandates have shown mixed trends.
Conclusion: Considering track record and the aggressive pricing, only cash surplus risk savvy investors may consider investment for long term.
Review By on March 6, 2017
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 IFL Enterprises Ltd. offers an early investment opportunity in IFL Enterprises Ltd.. A stock market investor can buy IFL Enterprises IPO shares by applying in IPO before IFL Enterprises Ltd. shares get listed at the stock exchanges. An investor could invest in IFL Enterprises IPO for short term listing gain or a long term.
Read the IFL Enterprises IPO recommendations by the leading analyst and leading stock brokers.
IFL Enterprises IPO offers an opportunity to buy IPO shares before they get listed at the stock exchanges. Read the IFL Enterprises IPO Notes, Analysis and Recommendations by leading stock brokerage firms and experts mentioned in the above answer to "How is IFL Enterprises IPO?"
Our recommendation for IFL Enterprises IPO is to avoid.
As per the analysis by our lead analyst Mr. Dilip Davda, we suggest you to avoid the IFL Enterprises IPO.
The IFL Enterprises IPO allotment status will be available on or around [.]. The allotted shares will be credited in demat account by [.]. Visit IFL Enterprises IPO allotment status to check.
