GCM Securities Ltd IPO Review (Avoid)

Review By Dilip Davda on Mar 15, 2013

GCMSL is currently engaged in the business of equity broking, investing and trading activities and is having membership of NSE.  Doing retail broking in the initial period, it has now HNI clients for F & O trades. It also obtained membership of BSE as well as MCX and providing all short of broking services under one roof. It plans to expand its reach to corporate clients and mulls new offices in cities like Kolkata, Mumbai, Delhi, Chennai and Bikaner. It is also engaged in making investment in various companies. It is proposing to acquire membership of CDSL, setting up of merchant banking division, investment in group company GCM Commodity and Derivatives Pvt. Ltd., brand building etc etc, To finance these it raised Rs. 19.14 crore by issuing 95,70,000 Equity Shares to Promoters, Friends and Other Strategic Investors. Now to raise general corpus fund for margin money, it it entering the capital market with an issue of 6090000 equity share of Rs. 10 each at a fixed price of Rs. 20 per share to mobilize Rs. 12.18 crore. Issue opens for subscription on 18.03.13 and closes on 20.03.13. Minimum application is to be made for 6000 shares and in multiples thereof, thereafter. Inventure Merchant Banker Services Pvt. Ltd is the sole lead manager to this offer and Purva Shareregistry (India) Pvt. Ltd is the registrar to the issue. Shares will be listed on BSE SME post allotment.

The company issued equity at par till 1996 and in September 2005 it issued 1230000 equity shares at Rs. 50 per share and then in 2013 it made further preferential allotments at a price of Rs. 20 per share. ON performance front, the company has seen EPS of s. 0.33 for lat three fiscals making this offer a costly one at a P/E of 60 plus agsinst industry average of 15. With issue at premium the NAV stands at Rs. 25.71 on pre-IPO basis which will get reduced to Rs. 22.44 post IPO.

On merchant banker's front, this is the second IPO mandate for them. Earlier IPO of Bronze Infra that fared well on debut but then currently quoting at hefty discount at Rs. 7.20 against offer price of Rs. 15.


Conclusion / Investment Strategy

 Better keep away from this IPO

Reviewer recommends Avoid to the issue.

Review By Dilip Davda on Mar 15, 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. Readers must consult a qualified financial advisor before making any actual investment decisions, based on information published here. With entry barriers, SEBI wants only well-informed investors to participate in such offers. With crazy listings in the past, SME IPOs drew the attention of investors across the board. 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 own risk. The above information is based on information available as on date coupled with market perceptions. The Author has no plans to invest in this offer.

(SEBI registered Research Analyst-Mumbai).


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.

Email: dilip_davda@rediffmail.com

GCM Securities IPO FAQs

  1. 1. Why GCM Securities IPO?

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

  2. 2. How is GCM Securities IPO?

    Read the GCM Securities IPO recommendations by the leading analyst and leading stock brokers.

  3. 3. GCM Securities IPO what should investors do?

    GCM Securities IPO offers an opportunity to buy IPO shares before they get listed at the stock exchanges. Read the GCM Securities IPO Notes, Analysis and Recommendations by leading stock brokerage firms and experts in the above answer.

  4. 4. Is GCM Securities IPO good?

    Our recommendation for GCM Securities IPO is to avoid.

  5. 5. Is GCM Securities IPO worth Investing?

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

  6. 6. When will GCM Securities IPO allotment status?

    The GCM Securities IPO allotment status will be available on or around [.]. The allotted shares will be credited in demat account by [.]. Visit GCM Securities IPO allotment status to check.

  7. 7. When will GCM Securities IPO list?

    The GCM Securities IPO will list on Friday, April 5, 2013, at BSE SME.








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