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• CGFL is an NBFC providing financial services and advisory on investments.
• Its financial performance is on a minuscule level for the last two fiscals.
• The sudden boost in its top and bottom lines for FY23 raises eyebrows.
• Investors may skip this exorbitantly priced RI offer.
ABOUT COMPANY:
Credent Global Finance Ltd. (CGFL) - erstwhile known as Oracle Credit Ltd. - that was originally promoted under the name and style of Overnite Finance Pvt. Ltd. has changed its name frequently in the period so far. It changed its name to Overnite Finance Ltd. in July 1994, then to OFL Finanz Ltd. in November 1994, to Oracle Credit Ltd. in August 1995, and then to its current name in April 2023. It got listed on BSE in January 2016.
The company is a Non-Banking Financial Company (NBFC) registered with RBI as an NBFC- Non-Deposit taking - Non-Systematically Important under section 45 IA of the Reserve Bank of India Act, 1934. It is currently providing a range of financing solutions including credit lending, investment banking services, real estate advisory and asset management. It offers financial products and services to corporates, institutions, and individuals across India and the UK and also supports investors with a deep domain understanding of 150+ years of knowledge and solid financial strategy and it intends to continue to empower innovative and sustainable businesses to create long-term strong returns over verticals.
CGFL is a holding company and provides financial services through its three wholly owned subsidiaries i.e. Credent Investment Pvt. Ltd., Credent Property Advisory Pvt. Ltd. and Credent AMC Pvt. Ltd. The offer document is silent on its infrastructure as well as employees' strength data.
ISSUE DETAILS:
The company is coming out with a Rights Issue (RI) of 3468750 equity shares of Rs. 10 each at a fixed price of Rs. 140 per share to mobilize Rs. 48.56 cr. The issue opens for subscription on July 25, 2023, and will close on August 08, 2023. The company is offering RI in the ratio of 1 share for every 2 shares held by the eligible stakeholders as of the record date of July 17, 2023. The full amount is to be paid with the application for the number of shares applied. Post allotment, shares will be listed on BSE.
The issue is self-managed by the company and Beetal Financial & Computer Services Pvt. Ltd. is the registrar of the issue.
Post-RI, CGFL's current paid-up equity capital of Rs. 6.94 cr. (6937500 shares) will stand enhanced to Rs. 10.41 cr. (10406250 shares). Based on the RI pricing, the company is looking for a market cap of Rs. 145.69 cr.
FINANCIAL PERFORMANCE:
On the financial performance front, for the last two fiscals, CGFL has (on a consolidated basis) posted a total income/net profit of Rs. 1.90 cr. / Rs. 1.07 cr. (FY22), and Rs. 19.57 cr. / Rs. 6.74 cr. (FY23). The sudden boost in top and bottom lines for FY23 raises eyebrows. The margins posted for FY23 are the major concern since it is operating in a highly competitive segment.
DIVIDEND POLICY:
The company has declared a 5% interim dividend for FY23. It will adopt a prudent dividend policy post listings of RI shares based on its financial performance and future prospects.
SCRIP PERFORMANCE: BASED ON BSE WEBSITE DATA: SCRIP CODE: 539598 (FV Rs. 10).
The scrip last closed on cum-right basis at Rs. 153.80 on July 15, 2023, and opened on an ex-right basis at Rs. 153.80 on July 17, 2023. Since then, it has marked a high/low of Rs. 153.80 / Rs. 139. The scrip last closed at Rs. 140.20 as of July 21, 2023. For the last 52 weeks, it has posted a high/low of Rs. 330.77 / Rs. 49.86. Thanks to market operations by the vested interest that is managing the counter just above or around the RI price.
The promoters' holding has been constant at 46.12% for the last three quarters ended on June 30, 2023. The counter is well-managed above the RI price to lure investors.
The counter is currently under ESM Stage 1.
Review By Dilip Davda on July 24, 2023
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 the information published here. My reviews do not cover GMP market and operators game plans. Any reader taking decisions based on any information published here does so entirely at their 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.
About 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: dilip_davda@rediffmail.com ).
The Credent Global Finance Rights Issue 2023 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 Credent Global Finance Rights Issue 2023 worth investing. The Credent Global Finance Rights Issue 2023 Note sets the Rights Issue expectations in systematic way which tells you if Credent Global Finance Rights Issue 2023 good to buy (good or bad / yes or no). The Rights Issue Forecast tells you weather to invest in Credent Global Finance Rights Issue 2023 by providing Rights Issue recommendations i.e. subscribe, avoid and neutral.
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