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Satkar Finlease Limited IPO Review (Avoid)

Review By Dilip Davda on September 23, 2013

US Fed's action brought Thursday Thunder and it was hoped that RBI too will have some surprises that will open the way for dormant primary market. But RBI disappointed with status quo on rates and on the contrary raised Repo rates that spoil the market sentiment and also belied hope for revival of primary market. Despite this, while we have some lucrative NCD and Tax Free bonds offer making rounds in primary market, we have yet one more SME platform IPO entering this week. Details of the said IPO are as under:

Satkar Finlease Ltd is a non-deposit taking, NBFC, and has been in the business of providing financial services since inception. The company is primarily focusing in providing inter corporate loans, personal loans, loans against shares & securities, loans against properties, trade financing, bills discounting, trading in shares & securities and arbitrage business in stock and commodity market. Being an, NBFC it has positioned itself between the organized banking sector and local money lenders, offering the customers competitive, flexible and timely lending services.

To part finance its proposed expansion of activities in financing and brand building as well as meeting corpus funds, it is offering 7504000 equity share of Rs. 10 each at a fixed price of Rs. 18 per share. The issue opens for subscription on 25.09.13 and will close on 27.09.13. Sole manage to the issue is GUINESS CORPORATE ADVISORS PVT. LTD. and registrar to the issue is Mas Services Ltd.  Post allotment of IPO shares will be listed on BSE SME. Minimum application is to be made for 8000 shares and in multiples thereof, thereafter.

As for company's track record, for last three fiscals it has posted an average EPS of Rs. 0.22. For the year ended 31.3.2013 it earned net profit of Rs. 0.11 crore on a total income of Rs. 0.61 crore on an equity base of Rs. 3.25 crore. This capital is now at Rs. 11.54 crore before IPO and will rise to Rs. 19.04 crore post IPO. In 2010 company splitted its face value form Rs. 10 to Re. 1 and issued 10000000 shares at Rs. 14.95 per share and 1900000 shares at Rs. 21 per share. In July 2013 it consolidated its face value from Re. 1 to Rs. 10 and also issued 20000 shares at Rs. 25 per share on 09.07.13 and 2500000 shares at par at Rs. 10 on 01.08.13 and then issued bonus shares in the ratio of 1 for 1 on the same date to take the subscribed equity to Rs. 11.54 crore.  If we attribute fiscal 2012-13 earnings on fully diluted equity of Rs. 19.04 crore then the EPS stands at just Rs. 0.01 per share thus the asking price is at 1800+ P/E. Its NAV is at s. 65.10 as on 31.03.13 and will get diluted to Rs. 19.54 post this issue.

On merchant banker's mandate performance front, it has not given track records in prospectus and has just put note for referring it on their web site. In fact this is the tenth IPO form this merchant banker and on checking web, it just mentions three IPO track records that have done well and is silent on other six IPOs.

Conclusion / Investment Strategy

Being exorbitantly pricing, Avoid this IPO. For 2012-13 earnings on fully diluted equity of Rs. 19.04 crore then the EPS stands at just Rs. 0.01 per share thus the asking price is at 1800+ P/E. Its NAV is at s. 65.10 as on 31.03.13 and will get diluted to Rs. 19.54 post this issue.

Reviewer recommends Avoid to the issue.

Review By Dilip Davda on September 23, 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: ).

Satkar Finlease IPO FAQs

  1. 1. Why Satkar Finlease IPO?

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

  2. 2. How is Satkar Finlease IPO?

    Read the Satkar Finlease IPO recommendations by the leading analyst and leading stock brokers.

  3. 3. Satkar Finlease IPO what should investors do?

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

  4. 4. Is Satkar Finlease IPO good?

    Our recommendation for Satkar Finlease IPO is to avoid.

  5. 5. Is Satkar Finlease IPO worth Investing?

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

  6. 6. When will Satkar Finlease IPO allotment status?

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

  7. 7. When will Satkar Finlease IPO list?

    The Satkar Finlease IPO will list on Friday, October 11, 2013, at BSE SME.