S R G Securities Finance Ltd IPO Review (Avoid)

Review By Dilip Davda on Oct 1, 2013

S R G Securities Finance Limited (SRGSFL) is a NBFC registered with RBI to carry on NBFC Activities under Section 45(1A) of the Reserve Bank of India Act, 1934 bearing Registration no. 10.00097. SRGSFL is a Non Deposit taking Non-systemically Important Non Banking Finance Company (NBFC-ND-NSI) engaged primarily in the business of Asset Financing by offering Business Loans, Equipment and Machinery Loan, Vehicle Loans and also gives loans against Equipment, Machinery and Vehicle.

In the past three (3) years its revenues have increased from Rs 62.50 lacs in F. Y. 2010-2011 to Rs 82.61 lacs in F. Y. 2011-12 and further to Rs 107.99 lacs in F. Y. 2012-2013, showing an increase of 32.18% and 30.72% respectively. Revenue for 3 month period ended June 30, 2013 was ` 23.33 lacs. Its Net Profit before tax for the above periods are Rs. 9.32 lacs, Rs.16.79 lacs and Rs. 22.38 lacs and for the 3 month period ended June 30, 2013 was Rs. 6.19 lacs.

To part finance its capital augmentation and working capital, it is issuing 2508000 equity share of Rs. 10 each at a fixed price of Rs. 20 per share to garner Rs. 5.01 crore. Minimum application is to be made for 6000 shares and in multiples thereof, thereafter. Issue opens on 07.10.13 and will close on 14.10.13. Post allotment, shares will be listed on BSE SME. Aryaman Financial Services Ltd is the sole lead manager and Shares Dynamaic (I) Pvt Ltd. is the registrar to the issue.

In June 2013 the company issued bonus shares in the ratio of 1 share for every 2 shares held.  Post issue its present equity of Rs. 1.37 crore will rise to Rs. 3.88 crore. If we attribute its Q1 (2014) earnings on full year basis for fully diluted equity, then the asking price of Rs. 20 per share is at 333+ P/E.


Conclusion / Investment Strategy

Merchant banker has poor track record for its past mandates and thus, it is now worth applying for this offer.

Reviewer recommends Avoid to the issue.

Review By Dilip Davda on Oct 1, 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

SRG Securities Finance IPO FAQs

  1. 1. Why SRG Securities Finance IPO?

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

  2. 2. How is SRG Securities Finance IPO?

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

  3. 3. SRG Securities Finance IPO what should investors do?

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

  4. 4. Is SRG Securities Finance IPO good?

    Our recommendation for SRG Securities Finance IPO is to avoid.

  5. 5. Is SRG Securities Finance IPO worth Investing?

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

  6. 6. When will SRG Securities Finance IPO allotment status?

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

  7. 7. When will SRG Securities Finance IPO list?

    The SRG Securities Finance IPO will list on Tuesday, October 29, 2013, at BSE SME.

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