Pro Fin Capital BSE RI review - (Avoid)

•    The company is engaged in the activities of investments and trading in shares and securities.
•    It is also providing short term loans and advances.
•    It marked minuscule performances so far.
•    The counter is well operated and kept above the RI price to tempt investors.
•    Higher post-RI equity may pose its servicing issue going forward.
•    Simply stay away from this manipulated counter. 

PREFACE:
This RI is opening for subscription on January 09, 2025, and its offer document filing date is December 31, 2024, but that were uploaded on BSE Exchange website only this afternoon (i.e. on January 08, 2025). The recent trends of late filing of offer documents is on the rise and it needs to be attended at once by the regulators.

ABOUT COMPANY:
Pro Fin Capital Services Ltd. (PFCSL) is presently engaged in the activities of investments and trading in shares and securities and providing short-term loans and advances. The Company follows a customer –centric business philosophy, with its growth strategy centered on transparency in term of offerings, suitability of products and variety of choices to meet a range of needs of its customers. 

A key strength of company is the variety of its funding sources, which helps it optimize funding costs, protect interest margins, and retain its diversified funding portfolio. At the same time, this also enables the Company to achieve funding stability and liquidity, facilitating reduction in average borrowing costs. The offer document is silent on its employees’ strength. 

ISSUE DETAILS:
The company is coming out with its Rights Issue (RI) of 106003500 equity shares of Re. 1 each at a fixed price of Rs. 4.50 per share to mobilize Rs. 47.70 cr. The RI opens for subscription on January 09, 2025, and will close on January 24, 2025. The company is offering RI in the ratio of 1 for 2 to its eligible stakeholders as of the record date of December 31, 2024. The full amount is to be paid on application for number of shares applied. Post allotment, shares will be listed on BSE. The company is spending Rs. 0.25 cr. for this RI process, and from the net proceeds, it will utilize Rs. 37.00 cr. for augmenting its capital base, Rs. 10.45 cr. for general corporate purposes.

This RI is self-managed by the company itself, and Beetal Financial and Computer Services Pvt. Ltd. is the registrar to the issue. 

Post RI, company’s current paid-up capital of Rs. 21.20 cr. will stand enhanced to Rs. 31.80 cr. Based on the RI pricing, the company is looking for a market cap of Rs. 143.10 cr. 

FINANCIAL PERFORMANCE:
On the financial performance front, for the last two fiscals, the company has posted a total income/net profit/ - (loss) of Rs.  20.54 cr. / Rs. 0.73 cr. (FY23), and Rs. 22.32 cr. / Rs. – (0.26) cr. (FY24). For H1 of FY25 ended on September 30, 2024, it earned a net profit of Rs. 3.79 cr. on a total income of Rs. 15.82 cr. Thus, a sudden boost in its earnings in pre-RI period raise eyebrows and concern over its sustainability. 

Financial data pages of the offer documents are blurred and unreadable.

DIVIDEND POLICY:
The company has not declared any dividends for the reported periods of the offer document. 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: 511557 (FV Re. 1).
The scrip last closed on cum-right basis at Rs. 5.10 on December 30, 2024, and opened on an ex-right basis at Rs. 4.81 on December 31, 2024. Since then, it has marked a high/low of Rs. 5.58 / Rs. 4.81. The scrip last closed at Rs. 5.58 as of January 08, 2025. For the last 52 weeks’ it has posted a high/low of Rs. 5.58 / Rs. 0.91. The counter is currently under ESM: Stage 2.

The promoters’ holding has declined to 4.58% for quarter ended September 30, 2024, against 8.22% for the previous quarters ended with June 30, 2024. The counter is well managed above the RI price by vested interest counters to lure investors.