• This is the 2nd RI from the company since September 2024.
• It is engaged in the segment of financial services.
• The company has been reporting losses for the referred financial periods of the offer document.
• The RI is exorbitantly priced considering its loss-making status.
• There is no harm in skipping this “High Risk/No Return” pricey bet.
PREFACE:
The company is coming out with its RI to mobilize Rs. 40.34 cr., and is opening for subscription on June 02, 2025, and its offer document is dated May 15, 2025, with a record date was of May 23, 2025, but the offer document was uploaded on the designated exchange only on May 30, 2025 noon. Thus, delayed submission of offer documents for RI is unabatedly going on.
ABOUT COMPANY:
Purple Finance Ltd. (PFL) erstwhile known as Devipura Balaji Securities and Investments Ltd. - has ventured into retail MSME secured lending in October 2022 and operates in tier II, III & tier IV cities, offering loans to micro and small entrepreneurs in a ticket size between Rs. 4 lakhs to Rs. 30 lakhs. PFL
leverages technology to make its processes more efficient. It has built a robust tech platform for underwriting that enables seamless and paperless loan approvals. PFL has opened 37 branches and has empowered more than 5000 lives through best of technology adoption and giving them access to
affordable, adequate and timely credit.
In an era where MSMEs are the backbone of Indian economy, PFL’s role as a lending Company has never been more critical. PFL has not only provided financial support but also served as a guiding force for several small entrepreneurs, helping them turn their dreams into thriving businesses. PFL intends to become a new age digital NBFC inter-alia currently engaged in the business of offering small size secured business loans across India predominantly in tier II, III & tier IV cities. PFL with its superior technology platform aspires to simplify the existing processes in the mortgages segment and is confident of making a difference to the MSME borrowers with simplified funding options and timely loan disbursements.
From inception till date, PFL has disbursed to around 1850 customers amounting to approximately Rs. 105 cr. All loans are secured by either Self Occupied Residential or Commercial property. PFL uses advanced technology to lend to customers. The offer document is silent on its employees’ strength data.
ISSUE DETAILS:
The company is coming out with its Rights Issue (RI) of 9604273 equity shares of Rs. 10 each at a fixed price of Rs. 42 per share to mobilize Rs. 40.34 cr. This is the 2nd RI from the company since September 2024. The RI is opening for subscription on June 02, 2025, and will close on June 10, 2025. The company is offering RI in the ratio of 3 for 14 to its eligible stakeholders as of the record date of May 23, 2025. The company is asking for full money on application for number of shares applied. Post allotment, shares will be listed on BSE and CSE. The company is spending Rs. 3.39 cr. for this RI process, and from the net proceeds, it will utilize Rs. 27.71 cr. for augmenting its capital base., and Rs. 9.24 cr. for general corporate purposes. The company is spending higher amount for this RI process indicating a very high-cost issue.
The RI is self-managed by the company itself, and Purva Sharegistry (India) Pvt. Ltd. is the registrar to the issue.
Post RI, company’s current paid-up equity capital of Rs. 44.82 cr. will stand enhanced to Rs. 54.42 cr. Based on the RI pricing, the company is looking for a market cap of Rs. 228.58 cr.
FINANCIAL PERFORMANCE:
On the financial performance front, for the last three fiscals, it has posted a total revenue/ net profit/ - (loss) of Rs. – (3.11) cr. / Rs. – (7.37) cr. (FY22), Rs. 2.56 cr. / Rs. – (6.33) cr. (FY23), Rs. 4.44 cr. / Rs. – (7.61) cr. (FY24). For 9M of FY25 ended on December 31, 2024, it posted a loss of Rs. – (11.63) cr. on a total income of Rs. 8.60 cr. Thus, it posted losses for the reported periods and still asking exorbitant price for its RI.
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: 512587 (FV Rs. 10).
The scrip last closed on cum-right basis at Rs. 45.31 on May 22, 2025, and opened on an ex-right basis at Rs. 44.10 on May 23, 2025. Since then, it has marked a high/low of Rs. 45.70 / Rs. 43.00. The scrip last closed at Rs. 44.33 as of May 29, 2025. For the last 52 weeks’ it has posted a high/low of Rs. 112.05 / Rs. 38.18.
The promoters’ holding has been constant around 60.58% for the last two quarters ended with March 31, 2025. The counter is well managed above the RI price to lure investors.
Review By Dilip Davda on June 1, 2025
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.
