Review By on January 25, 2017
Steel City Securities Ltd is a primarily a leading stock broking and e-Governance service provider company having PAN India presence. Currently it provides whole range of financial services through its network. It provides Capital Market Services, E-Governance Services, Investment Advisory in the form of distribution of Mutual Funds, Bonds, IPOs and Corporate FDs, Currency Trading, Commodity broking, Insurance distribution and NBFC services.
To finance its technology up gradation and office infrastructure plans, setting up of Aadhar Enrolment Centre, enhancement of Brand image and meeting its working capital and other corpus fund needs, the company is coming out with a maiden IPO of 4908000 equity share of Rs. 10 each at a fixed price of Rs. 55 per share to mobilize Rs. 26.99 crore. Issue comprises offer for sale (2181817 shares i.e. Rs. 12 crore) as well as fresh issue (2726183 shares i.e. Rs. 14.99 crore). Issue opens for subscription on 06.02.17 and will close on 09.02.17. Minimum application is to be made for 2000 shares and in multiples thereon, thereafter. Post allotment, shares will be listed on NSE SME Emerge platform. Issue is solely lead managed by Keynote Corporate Services Ltd and Bigshare Services Pvt Ltd is the registrar to the issue. Most of equity is issued at par since inception except few shares for other deals as conversion at a premium of Rs.1.06 crore. It has issued bonus shares in the ratio of 7 shares for every 1 share held in December 2005. Its current paid up equity capital of Rs. 12.38 crore will stand enhanced to Rs. 15.11 crore post IPO.
On performance front, on consolidated basis the company has posted total revenue /net profits of Rs. 31.35 cr. / Rs. 4.54 cr. (FY13), Rs. 26.94 cr. / Rs. 3.55 cr. (FY14), Rs. 34.80 cr. / Rs. 6.83 cr.(FY15), Rs. 30.33 cr. / Rs. 4.15 cr. (FY16). For the first half of the current fiscal it has posted total revenue of Rs. 17.83 cr. with a net profit of Rs. 2.84 cr. For last three fiscals it has paid an average dividend of 16.67%. If we annualize these earnings and attribute to fully diluted equity capital post IPO then asking price is at a P/E of 14 plus and at a P/BV of little over 1. Thus issue price appears fair compared with its peers.
On merchant banker’s front, this is the 5th SME IPO mandate from its stable and past issues have shown mixed trends.
Conclusion: Cash surplus risk savvy investors may consider investment for long term.
Review By on January 25, 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 Steel City Securities Ltd. offers an early investment opportunity in Steel City Securities Ltd.. A stock market investor can buy Steel City Securities IPO shares by applying in IPO before Steel City Securities Ltd. shares get listed at the stock exchanges. An investor could invest in Steel City Securities IPO for short term listing gain or a long term.
Read the Steel City Securities IPO recommendations by the leading analyst and leading stock brokers.
Steel City Securities IPO offers an opportunity to buy IPO shares before they get listed at the stock exchanges. Read the Steel City Securities IPO Notes, Analysis and Recommendations by leading stock brokerage firms and experts mentioned in the above answer to "How is Steel City Securities IPO?"
Our recommendation for Steel City Securities IPO is to subscribe.
As per the analysis by our lead analyst Mr. Dilip Davda, we suggest you to subscribe to the Steel City Securities IPO.
The Steel City Securities IPO allotment status will be available on or around [.]. The allotted shares will be credited in demat account by [.]. Visit Steel City Securities IPO allotment status to check.
