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Stellar Capital Services Ltd IPO Review (Avoid)

Review By Dilip Davda on October 14, 2013

Stellar Capital Services Ltd.  (SCSL) is a NBFC registered with the RBI to carry out NBFC activities under Section 451A of the Reserve Bank of India Act, 1934. The company operates as a Non Deposit taking Non Banking Finance Company engaged primarily in the business of advancing loans and investing/trading in securities.

To acquire new offices on rent/lease at Kolkata and Jaipur and generate corpus fund the company is coming out with an IPO of 4500000 equity share of Rs. 10 each at a fixed price of Rs. 20 per share to mobilize Rs. 9 core. Issue opens for subscription on 15.10.13 and will close on 18.10.13. Minimum application is to be made for 6000 shares and in multiples thereof, thereafter. Post allotment, the shares will be listed on BSE SME. Aryaman Financial Services Ltd. is the lead manager and Skyline Financial Services Pvt. Ltd is the registrar to the issue. On 31.3.11 and 31.3.12 it made preferential issue of 379900 and 168800 equity shares respectively at a price of Rs. 500 per share and on 31.3.13 it issued bonus shares in the ratio of 14 shares for every 1 share held. Post issue the equity will rise to Rs. 16.56 crore.

For last three fiscals, the company has posted an average EPS of Rs. 0.05. For Q1 ended on 30.06.313 of the current fiscal, it has earned net profit of Rs. 0.15 lakh on the total revenue of Rs. 0.72 lakh and if we attribute these earnings on annualized basis on expanded equity then the EPS stands at Rs. 0.04 and thus the asking price is at a P/E of 500 plus against peers trading between 2 to 22.

Merchant banker has poor track record for its past mandates.

Conclusion / Investment Strategy

Remark: Avoid

Reviewer recommends Avoid to the issue.

Review By Dilip Davda on October 14, 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: ).

Stellar Capital Services IPO FAQs

  1. 1. Why Stellar Capital Services IPO?

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

  2. 2. How is Stellar Capital Services IPO?

    Read the Stellar Capital Services IPO recommendations by the leading analyst and leading stock brokers.

  3. 3. Stellar Capital Services IPO what should investors do?

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

  4. 4. Is Stellar Capital Services IPO good?

    Our recommendation for Stellar Capital Services IPO is to avoid.

  5. 5. Is Stellar Capital Services IPO worth Investing?

    As per the analysis by our lead analyst Mr. Dilip Davda, we suggest you to avoid the Stellar Capital Services IPO.

  6. 6. When will Stellar Capital Services IPO allotment status?

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

  7. 7. When will Stellar Capital Services IPO list?

    The Stellar Capital Services IPO will list on Friday, November 1, 2013, at BSE SME.