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Naysaa Securities RI review (Avoid)

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•    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. 


Conclusion / Investment Strategy

This counter is marking trades occasionally based on a vested interest game. It hasn’t marked any trade since 25th August 2022 and thus clarity on its fair price is missing. Its financial performance too is listless as it has maintained its net profit despite growth in total income for FY22. RI is priced exorbitantly based on its financial parameters. Since BSE web has its financial data only till March 31, 2022, thus it is missing the info on its current performance trends. There is no harm in ignoring this pricy bet.

Reviewer recommends Avoid to the issue.

Review By Dilip Davda on Sep 5, 2022

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 Naysaa Securities Limited RI Views / Analysis / Recommendations ...

The Naysaa Securities Rights Issue 2022 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 Naysaa Securities Rights Issue 2022 worth investing. The Naysaa Securities Rights Issue 2022 Note sets the Rights Issue expectations in systematic way which tells you if Naysaa Securities Rights Issue 2022 good to buy (good or bad / yes or no). The Rights Issue Forecast tells you weather to invest in Naysaa Securities Rights Issue 2022 by providing Rights Issue recommendations i.e. subscribe, avoid and neutral.


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