Review By on August 21, 2012
While secondary market is at its recent higher resistance level, we are still missing main line IPOs and have to settle with some SME platform issues that are in command of primary market for a while. This week we have one more BSE SME platform IPO from SRG Housing Finance Ltd. (SRGHF) Details of the same are as under:
SRGHF is the flagship company of SRG group of Rajasthan and is engaged in housing finance segment and offers loans to individuals for buying a house and also in funding against property. The company is having Rajasthan centric operations and hopes to raise its loan book in coming years. To part finance this object, the company is offering 3504000 equity share of Rs. 10 each at a fixed price of Rs. 20 per share (i.e. at a premium of Rs. 10 per share) to mobilize Rs. 7.01 crore. The issue is opening for subscription on 22.08.12 and will close on 24.8.12. Minimum application is to be made for 6000 shares and in multiples thereof. Aryaman Financial Services Ltd. is the lead manager and Sharex Dynamic (I) Pvt. Ltd is the registrar to the issue.
Company's current equity base of Rs. 4.58 crore (post 1 for 2 bonus issue in April 2012-mainly out of premiums collected from preferential issues to promoters in recent past) will rise to Rs. 8.08 crore post this issue. For the year 2011-12 it posted a net profit of Rs. 0.26 crore on a total income of Rs. 1.27 crore. Last three year's average EPS of Rs. 0.97 on pre-bonus equity. This may get further diluted on enhanced equity post bonus and this issue and thus offer price works out to be at a P/E of around 61 and thus is aggressively priced. Lead Manager has poor track records on performance of IPOs managed by it.
As SME IPOs have unaffordable entry level for subscription point as well as post listing they are not really meant for retail masses. Risks aver HNI's may dare to lock their funds for long term rewards.
Review By on August 21, 2012
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 SRG Housing Finance Ltd. offers an early investment opportunity in SRG Housing Finance Ltd.. A stock market investor can buy SRG Housing Finance IPO shares by applying in IPO before SRG Housing Finance Ltd. shares get listed at the stock exchanges. An investor could invest in SRG Housing Finance IPO for short term listing gain or a long term.
Read the SRG Housing Finance IPO recommendations by the leading analyst and leading stock brokers.
SRG Housing Finance IPO offers an opportunity to buy IPO shares before they get listed at the stock exchanges. Read the SRG Housing Finance IPO Notes, Analysis and Recommendations by leading stock brokerage firms and experts mentioned in the above answer to "How is SRG Housing Finance IPO?"
Our recommendation for SRG Housing Finance IPO is to avoid.
As per the analysis by our lead analyst Mr. Dilip Davda, we suggest you to avoid the SRG Housing Finance IPO.
The SRG Housing Finance IPO allotment status will be available on or around [.]. The allotted shares will be credited in demat account by [.]. Visit SRG Housing Finance IPO allotment status to check.
