SecMarK Consultancy BSE SME IPO review (Apply at your own risk)

Review By Dilip Davda on Sep 12, 2020

•    SCL is offering a pack of services to financial market participants.
•    Its financial data is not matching the asking price.
•    The issue is priced at a P/E of around 48, making it an expensive offer.
•    Lead Manager has no track record as this is its first mandate.

ABOUT COMPANY:
SecMark Consultancy Ltd. (SCL) is offering services in the areas of compliance, operations, risk management, outsourcing, software development, and legal matters to financial market participants and others. Company's clients primarily include stock and commodity brokers, depository participants, stock exchanges, wealth managers, research analysts, insurance companies, insurance brokers, corporate agents, portfolio managers, investment advisors, NBFCs, banks etc.

SCL offered services to about 125 clients in the Financial Year 2015 which has increased to about 200 in the Financial Year 2019-20. Its Registered Office is situated at Mumbai, and team executes assignments all over India. The company has local representatives at various locations like New Delhi, Ahmedabad, Indore, Jaipur, Bangalore, Chandigarh, and Raipur etc.

ISSUE DETAILS/CAPITAL HISTORY:
To meet its plans for technology development/procurement/strategic acquisition (Rs. 4.60 cr.), Human resources (3.00 cr.), acquire the asset for business (Rs. 1.50 cr. ), repayment of the bank loan (Rs. 1.50 cr.) and general corpus find (Rs. 3.40 cr.) needs, SCL is coming out with a maiden IPO of 1114000 equity shares of Rs.10 each at a fixed price of Rs. 135 per share to mobilize Rs. 15.04 cr. The issue opens for subscription on September 18, 2020, and will close on September 23, 2020. Minimum application is to be made for 1000 shares and in multiples thereon, thereafter. Post allotment, shares will be listed on BSE SME platform.

Issue constitutes 27.01% of the post issue paid-up capital of the company. The company will be spending Rs. 1.04 cr. for this IPO process. The issue is solely lead managed by Indorient Financial Services Ltd. and Bigshare Services Pvt. Ltd. is the registrar to the issue. Vijeta Broking India Pvt. Ltd. is acting as a Market Maker for this company. Having raised initial equity at par, SCL issued bonus shares in the ratio of 300 shares for 1 share held in November 2019.

The average cost of acquisition of shares by the promoters is Rs.0.03 per share. Post issue, SCL's current paid-up equity capital of Rs. 3.01 cr. will stand enhanced to Rs. 4.12 cr. With this IPO, the company is looking for a market cap of Rs. 55.67 cr.

FINANCIAL PERFORMANCE:
On the financial performance front, for the last three fiscals, SCL has, on a consolidated basis, posted total revenue/net profits of Rs. 3.29 cr. / Rs. 0.87 cr. (FY18), Rs. 3.90 cr. / Rs. 0.97 cr. (FY19) and Rs. 5.75 cr. / Rs. 1.16 cr. (FY20). It has posted slow and steady growth in top and bottom lines.

For the last three fiscals, SCL has posted an average EPS of Rs. 3.47 and RoNW of 31.34%. The issue is priced at a P/BV of 9.64 on the basis of its NAV of Rs. 14 as on March 31, 2020, and at a P/BV of 2.89 on the basis of post-issue NAV of Rs. 46.68.

If we attribute FY20 earnings on fully diluted post issue equity, then asking price is at a P/E of around 47.87, making it an expensive offer.

COMPARISION WITH LISTED PEERS:
As per offer documents, SCL has no listed peers to compare with.  

MERCHANT BANKER'S TRACK RECORDS:
On merchant banker's performance front, this is the maiden mandate from its platform and has no track records.


Conclusion / Investment Strategy

Although the company has blue-chip clients in its list, expensive pricing of the issue is going against it. Current financial data is not matching the asking price. Cash surplus, risk savvy investors may consider investment at their own risk.

Review By Dilip Davda on Sep 12, 2020

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

SecMark SME IPO FAQs

  1. 1. Why SecMark SME IPO?

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

  2. 2. How is SecMark SME IPO?

    Read the SecMark SME IPO recommendations by the leading analyst and leading stock brokers.

  3. 3. SecMark SME IPO what should investors do?

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

  4. 4. Is SecMark SME IPO good?

    Sorry, we didn't rate the SecMark SME IPO.

  5. 5. Is SecMark SME IPO worth Investing?

    Our lead analyst Mr. Dilip Davda didn't rate the SecMark SME IPO.

  6. 6. When will SecMark SME IPO allotment status?

    The SecMark SME IPO allotment status will be available on or around Sep 28, 2020. The allotted shares will be credited in demat account by Sep 30, 2020. Visit SecMark SME IPO allotment status to check.

  7. 7. When will SecMark SME IPO list?

    The SecMark SME IPO will list on Thursday, October 1, 2020, at BSE SME.








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