• NSL is in the broking business and provides related services.
• Its static bottom line despite growth in the top line raises eyebrows.
• Based on its financial parameters, this RI is priced exorbitantly.
• There is no harm in skipping this pricy bet.
ABOUT COMPANY:
Naysaa Securities Ltd. (NSL) is a financial services provider company in India offering equity broking to investors viz. retail and corporates. It is a member of the Capital Market Cash Segment. NSL's business philosophy is always customer oriented and the services are offered under total confidentiality and integrity with the sole purpose of maximizing returns to clients and also maximizing returns through proprietary trading. As of 31st March 2022, it employed approximately 8 persons on a full-time basis.
The company took its own time in uploading offer documents to the public domain. BSE made it available this noon (i.e. on September 05, 2022, while it is opening on September 07, 2022). BSE's Website has not shown recent quarterly results for this counter.
ISSUE DETAILS:
To part finance its needs for working capital (Rs. 6.45 cr.) and general corporate purposes (Rs. 1.93 cr.), NSL is offering a rights issue (RI) of 868000 equity shares of Rs. 10 each at a price of Rs. 100 per share to mobilize Rs. 8.68 cr. The company is offering the right shares in the ratio of 1 share for every 4 shares held as of the record date of September 01, 2022. The issue opens for subscription on September 07, 2022, and will close on September 13, 2022. The full amount is to be paid along with the application. Post allotment, shares will be listed on BSE SME. NSL is spending Rs. 0.30 cr. for this RI process.
The issue is solely lead managed by Fedex Securities Pvt. Ltd. and Bigshare Services Pvt. Ltd. is the registrar to the issue.
Post RI, NSL's current paid-up equity capital of Rs. 3.48 cr. will stand enhanced to Rs. 4.35 cr. Based on the RI pricing, the company is looking for a market cap of Rs. 43.45 cr.
FINANCIAL PERFORMANCE:
On the financial performance front, for the last two fiscals, NSL has posted total income/net profits of Rs. 1.79 cr. / Rs. 0.41 cr. (FY21) and Rs. 11.15 cr. / Rs. 0.41 cr. (FY22). Thus even though its top line marked a significant rise, its bottom line remained static and raised eyebrows. BSE Website has no data for the June 31, 2022 quarter performance.
DIVIDEND POLICY:
The company has not declared any dividends for the reported periods of the offer documents till date. It will adopt a prudent dividend policy post listing of RI, based on its financial performance and future prospects.
SCRIP PERFORMANCE: BASED ON BSE WEBSITE DATA: SCRIP CODE: 538668:
The scrip last closed on cum-right basis at Rs. 121.70 on August 24, 2022, and opened on an ex-right basis at Rs. NA on September 01, 2022. Since then it has marked a high/low of Rs. NA / Rs. NA. The scrip last closed at Rs. 121.70 as of August 24, 2022. Based on this quote, its post-RI market cap stands at Rs. 52.89 cr. This counter is having thin trades occasionally as seen on BSE Website. Due to no trades on an ex-right basis, the data shown here is not giving clarity on its fair price. The scrip has posted the last 52 weeks high/low of Rs. 121.70 / Rs. 21.00. Promoter holding has remained static at 47.64% for the last three quarters ended on 30.06.2022.
The counter is maintained above the RI price with the last cum-right quote, indicating some wasted interest game and missing transparency.
Review By Dilip Davda on September 5, 2022
Dilip Davda is a veteran financial journalist associated with the Indian stock market since 1978. He has been contributing to print and electronic media on capital markets, insurance, and finance since 1985.
He is widely recognized for reviewing public issues and non-convertible debentures (NCDs) in the primary market. Drawing on over three decades of market experience and close interaction with merchant bankers, his reviews focus on detailed fundamental and financial analysis of companies, with a special emphasis on SME public issues.
Dilip Davda
SEBI Registered Research Analyst – Mumbai
Registration No.: INH000003127 (Perpetual)
Email: dilip_davda@rediffmail.com
Disclaimer: The information provided herein is solely for educational and informational purposes and does not constitute an offer, solicitation, or recommendation to buy or sell any securities. Readers are advised to consult a qualified financial advisor before making any investment decisions. Investments in the securities market are subject to market risks. The author does not intend to invest in the securities discussed.
