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Wealth First Portfolio NSE SME Emerge IPO review (Avoid)

Review By Dilip Davda on Mar 2, 2016

Wealth First Portfolio Managers Ltd (WFPM) is a one stop financial services provider for various types of financial products available in Indian market. Its product portfolio provides right mix of financial assets that suits financial goal in short and long term depending on client’s perception and need. WFPM offers in depth research for products that delivers compatible performance in terms of yield as well as it make sure that investments stays secure over the period, though market risk is always there which are beyond company’s control.

The company offers various financial instruments according to risk appetite and holding period of client that includes Government Bonds & Securities, Direct Equity, Cash Management Services, Derivative products, Mutual Funds, Insurance products, Commodities, REITS and Market Making Services. It is registered with BSE Limited and National Stock Exchange of India Limited as its member. WFPM is also registered with CDSL as Depositary Participants. Major part of its revenue comes from sale & purchase of taxable & tax-free bonds and brokerages & Commission from Mutual fund distribution business.

To augment long term working capital for its Bond market operations, upgrading technology, expansion of domestic operations for Mutual Fund distributions and to raise general corpus fund, the company is coming out with a maiden IPO for 1680000 equity share of Rs. 10 each at a fixed price of Rs. 50 per share to mobilize Rs. 8.40 crore. Issue opens for subscription on 10.03.16 and will close on 18.03.16. Minimum application is to be made for 3000 shares and in multiples thereon, thereafter. Sarthi Capital Advisors Pvt Ltd is the lead manager to the issue and Bigshare Services Pvt Ltd is the registrar. Post allotment shares will be listed on NSE SME Emerge platform. The issue will constitute 26.29% of the post issue paid up capital of the company. From 2002 to 2007 it issues equity shares at par. In 2010 and 2011 it issues shares at a price of Rs. 100 per share. In October 2015 it issued bonus shares in the ratio of 3 shares for every 1 share held. Its existing paid up equity capital of Rs. 4.71 crore will stand enhanced to Rs. 6.39 crore post this issue. Cost of acquisition of shares by promoters is Rs. 2.50 per share.

On performance front, the company has shown inconsistency in top and bottom lines for last five fiscals. For FY 2011 to FY 2015 its top lines were Rs. 258.68 cr., Rs. 211.01 cr., Rs. 199.66 cr., Rs. 143.53 cr., Rs. 169.67 cr. while its net profits were Rs. 0.10 cr., (Rs. 0.04 cr.,), Rs. 0.19 cr., Rs. 0.14 cr. and Rs. 2.02 cr. respectively.  FY 2015 marked other income of Rs. 2.72 cr. against previous four year’s average of Rs. 0.33 cr. For first six months ended 30.09.15 it has earned net profit of Rs. 0.67 cr. on a total income of Rs. 49.16 cr. If we attribute these earnings on annualized basis on fully diluted equity post IPO, then asking price is at a P/E of around 24 and at a P/BV of 1 plus. Thus issue is priced aggressively.

On merchant banker’s front, this is 15th IPO from its stable and earlier mandates have shown mixed trends.


Conclusion / Investment Strategy

As Mutual Fund distribution segment is controlled by SEBI with stricter norms and the stock market is in bad shape, one may give this issue a miss being aggressively priced.

Reviewer recommends Avoid to the issue.

Review By Dilip Davda on Mar 2, 2016

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

Wealth First NSE SME IPO FAQs

  1. 1. Why Wealth First NSE SME IPO?

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

  2. 2. How is Wealth First NSE SME IPO?

    Read the Wealth First NSE SME IPO recommendations by the leading analyst and leading stock brokers.

  3. 3. Wealth First NSE SME IPO what should investors do?

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

  4. 4. Is Wealth First NSE SME IPO good?

    Our recommendation for Wealth First NSE SME IPO is to avoid.

  5. 5. Is Wealth First NSE SME IPO worth Investing?

    As per the analysis by our lead analyst Mr. Dilip Davda, we suggest you to avoid the Wealth First NSE SME IPO.

  6. 6. When will Wealth First NSE SME IPO allotment status?

    The Wealth First NSE SME IPO allotment status will be available on or around [.]. The allotted shares will be credited in demat account by [.]. Visit Wealth First NSE SME IPO allotment status to check.

  7. 7. When will Wealth First NSE SME IPO list?

    The Wealth First NSE SME IPO will list on Wednesday, March 30, 2016, at NSE SME.