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B. N. Rathi Securities RI review (Apply)

B.N. Rathi Securities Limited Logo

•    BNRSL is a south centric financial service provider.
•    The company has been posting steady growth in its financial performance.
•    It has been paying regular dividends for the reported periods. 
•    Investors may consider an investment with a long term perspective. 

ABOUT COMPANY:
B N Rathi Securities Ltd. (BNRSL) is a financial services company based in South India that offers financial products and services. Over the years, from being primarily a Telangana/ Andhra Pradesh centric broking firm, it has transformed itself by establishing a presence in other states in India. As of September 30, 2021, the company had 4 branches and 400 business associates across the states of Telangana, Andhra Pradesh, Tamil Nadu, Maharashtra, Rajasthan and Gujarat having over 45,803 retail clients.

BNRSL's innovative product offerings, based on a deep understanding of customer behaviour, include completely paperless account opening, advanced technological solutions and Robo-advisory services etc. With a robust trading platform, advanced mobile application and artificial intelligence-powered Robo-advisory platform, it offers advanced technology-led services to customers, leading to an enhanced user-friendly experience across the investment lifecycle. It is offering services like Equity Brokerage, Depository Services, Currency Trading, Commodities Brokerage etc. 

ISSUE DETAILS:
To part finance its needs for enhancement of margin money kept with exchanges (Rs. 5.30 cr.) and general corporate purpose (Rs. 1.64 cr.), BNRSL is offering 3360000 shares of Rs. 10 each at a fixed price of Rs. 22 per share as a rights issue (RI) in the ratio of 2 shares for every 3 shares held as of the record date of December 17, 2021. With this RI, the company mulls mobilizing Rs. 7.39 cr. The issue opens for subscription on January 03, 2022, and will close on January 17, 2022. Post allotment, shares will be listed on BSE. The company will be spending Rs. 0.45 cr. for this RI process. 

The issue is solely lead managed by Bajaj Capital Ltd. and KFin Technologies Pvt. Ltd. is the registrar to the issue. 

Post RI, the company's current paid-up equity capital of Rs. 5.04 cr. will stand enhanced to Rs. 8.40 cr. Based on RI pricing, its market cap will be at Rs. 18.48 cr.

FINANCIAL PERFORMANCE:
On the financial performance front, for the last three fiscals, BNRSL has reported total income/net profits of Rs. 22.75 cr.  / Rs. 1.16 cr. (FY19), Rs. 25.53 cr. / Rs. 1.75 cr. (FY20) and Rs. 32.31 cr. / Rs. 3.45 cr. (FY21). For the first half of FY22 ended on September 30, 2021, it has earned a net profit of Rs. 2.20 cr. on a total income of Rs. 19.72 cr. Thus it has been posting steady growth in its income. As of September 30, 2021, promoters holding is at 53.48%. 

DIVIDEND POLICY:
The company has paid a dividend of 10% for FY19 and FY20 and 12% for FY21. Thus it's a dividend-paying company and will continue to follow prudent dividend policy based on its financial performance and future prospects. 

SCRIP PERFORMANCE: BASED ON BSE WEBSITE: SCRIP CODE 523019:
The scrip closed on cum-right basis at Rs. 51.45 on December 15, 2021, and opened on an ex-rights basis at Rs. 39.00 on December 16, 2021. Since then, it has marked high/low of Rs. 39.00 / Rs. 31.05. For the last 52 weeks, it posted a high/low of Rs. 46.26 / Rs. 15.42. The scrip last closed at Rs. 34.35 on December 31, 2021. Based on its last closing price, its market cap stands at Rs. 28.85 cr. (based on post-RI paid-up equity capital).


Conclusion / Investment Strategy

BNRSL has posted steady growth in its financial performance and is a dividend-paying company. It is a small player in the financial services segment. Investors may consider an investment with a long term perspective.

Reviewer recommends Subscribing to the issue.

Review By Dilip Davda on Dec 31, 2021

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. Any reader taking decisions based on any information published here does so entirely at its own risk. Investors should bear in mind that any investment in stock markets is subject to unpredictable market-related risks. The above information is based on RHP and other documents available as of date coupled with market perception. The author has no plans to invest in this offer.

(SEBI registered Research Analyst-Mumbai).


About Dilip Davda

Dilip Davda, a freelance journalist

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

More B.N. Rathi Securities Limited RI Views / Analysis / Recommendations ...

The BN Rathi Rights Issue Analysis helps you to understand about the company, offer detail, valuation, capital structure and financial performance. Our SEBI registered Rights Issue Analysts tells you if BN Rathi Rights Issue worth investing. The BN Rathi Rights Issue Note sets the Rights Issue expectations in systematic way which tells you if BN Rathi Rights Issue good to buy (good or bad / yes or no). The Rights Issue Forecast tells you weather to invest in BN Rathi Rights Issue by providing Rights Issue recommendations i.e. subscribe, avoid and neutral.