SMC Credits RI review (Avoid)

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•    SMCCL is in the finance-related service segment. 
•    Its financial data is just on a minuscule level.
•    The counter has not marked any trades since June 1997.
•    Simply stay away from this at-par issue. 

SMC Credit Ltd. (SMCCL) is promoted by Focal Leasing and Credits Limited. As an NBFC it is involved in providing financial services and not accepting any public deposits. The company is a non-banking finance company duly registered with the Reserve Bank of India and has Investments in Shares & Loans and Advances to corporate entities, and source of Income includes Dividends on Investments, Interest on Loans, and Profit from Share Trading. Besides this, the Company also has rental income on its Fixed Assets/Building. 

To part finance its need for augmenting capital base (Rs. 11.25 cr.), and general corporate purpose (Rs. 3.52 cr.), SMCCL is coming out with the right issue (RI) of 15033300 equity shares of Rs. 10 each at par value to mobilize Rs. 15.03 cr. It is offering 3 shares for every 2 shares held by eligible shareholders as of the record date of November 25, 2022. The issue opens on December 12, 2022, and will close on December 19, 2022. The full amount is to be paid on application. Post allotment, shares will be listed on BSE. SMCCL is spending Rs. 0.26 cr. for this RI process. 

Sandae Capital Advisors Pvt. Ltd. is the sole lead manager for this issue while Beetal Financial & Computer Services Pvt. Ltd. is the registrar of the issue 

Post RI, SMCCL's current paid-up equity capital of Rs. 10.02 cr. will stand enhanced to Rs. 2.51 cr. Based on the RI pricing, the company is looking for a market cap of Rs. 2.51 cr.

On the financial performance front, for the last two fiscals, SMCCL has posted a total income of Rs. 5.16 cr. / Rs. 4.50 cr. (FY21), Rs. 5.24 cr. / net profit of Rs. 2.59 cr. (FY22). FY21 net profit is after deferred tax credit of Rs. 2.23 cr. 

As per unaudited results filed with the exchange, it has earned a net profit of Rs. 0.41 cr. on a total income of Rs. 1.83 cr. for H1 of fY23 ended on September 30, 2022. 

The company has no track records on the BSE Website about its dividends. It may adopt a prudent dividend policy post-listing of RI, based on its financial performance and future prospects.

Aho Ascharyam, this counter has no track record as per BSE WEB. It has had no quotes since June 1997. It marked the last quote at Rs. 11.25 as of May 20, 1997. Thus a company that has no quotes on the Exchange is being permitted for fresh fundraising. Since the last three quarters, the promoter's holding has remained constant at 13.98%. This scrip turned ex-right on November 25, 2022, but has no quotes on cum-right or ex-right basis and even as of writing this review i.e. December 08, 2022.

Conclusion / Investment Strategy

Simply stay away from this issue as it has marked no activities on the exchange since June 1997.

Reviewer recommends Avoid to the issue.

Review By Dilip Davda on Dec 8, 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 SMC Credits Ltd RI Views / Analysis / Recommendations ...

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


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