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India Finsec Limited IPO Review (Avoid)

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.

Conclusion / Investment Strategy

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.

Reviewer recommends Avoid to the issue.

Review By Dilip Davda on May 24, 2013

Review Author

DISCLAIMER: No financial information whatsoever published anywhere here should be construed as an offer to buy or sell securities, or as advice to do so in any way whatsoever. All matter published here is purely for educational and information purposes only and under no circumstances should be used for making investment decisions. My reviews do not cover GMP market and operators game plans. Readers must consult a qualified financial advisor before making any actual investment decisions, based the on information published here. With entry barriers, SEBI wants only well-informed investors to participate in such offers. With crazy listings in the recent past, SME IPOs drew the attention of investors across the board and lead to seer madness. However, as SME issues have entry barriers and continued low preference from the broking community, any reader taking decisions based on any information published here does so entirely at their own risk. The above information is based on information available as of date coupled with market perceptions. The Author has no plans to invest in this offer.

About Dilip Davda

Dilip Davda

Dilip Davda is veteran journalist associated with stock market since 1978. He is contributing to print and electronic media on stock markets/insurance/finance since 1985.

Dilip Davda is a leading reviewer of public issues and NCDs in the primary stock market in India. The knowledge he gained over 3 decades while working in the stock market and a strong relationship with popular lead managers makes his reviews unique. His detail fundamental and financial analysis of companies coming up with IPO helps investors in the primary stock market. Dilip Davda has a special interest in analyzing the SME companies and writing reviews about their public issues. His reviews are regularly published online and in news papers.

(Dilip Davda -SEBI registered Research Analyst-Mumbai,

Registration no. INH000003127 (Perpetual)

Email id: ).

India Finsec IPO FAQs

  1. 1. Why India Finsec IPO?

    The initial public offer (IPO) of India Finsec Limited offers an early investment opportunity in India Finsec Limited. A stock market investor can buy India Finsec IPO shares by applying in IPO before India Finsec Limited shares get listed at the stock exchanges. An investor could invest in India Finsec IPO for short term listing gain or a long term.

  2. 2. How is India Finsec IPO?

    Read the India Finsec IPO recommendations by the leading analyst and leading stock brokers.

  3. 3. India Finsec IPO what should investors do?

    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 in the above answer.

  4. 4. Is India Finsec IPO good?

    Our recommendation for India Finsec IPO is to avoid.

  5. 5. Is India Finsec IPO worth Investing?

    As per the analysis by our lead analyst Mr. Dilip Davda, we suggest you to avoid the India Finsec IPO.

  6. 6. When will India Finsec IPO allotment status?

    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.

  7. 7. When will India Finsec IPO list?

    The India Finsec IPO will list on Tuesday, June 11, 2013, at BSE SME.