Courtesy: https://www.chittorgarh.com/
Review By Dilip Davda on September 17, 2025
- The company is engaged in providing financial services as RBI registered NBFC.
• Recently this company was taken over by Hindon Mercantile Ltd.
• It marked sharp fall in its top and bottom lines for FY25 against FY24.
• The RI is aggressively priced making it “High Risk/Low Return” bet.
• Investors may stay away from this pricey RI.
ABOUT COMPANY:
LKP Finance Ltd. (LFL) is registered with the Reserve Bank of India (“RBI”) as a Non-Banking Finance Company (“NBFC”) under Section 45 IA of the RBI Act, 1934 having RBI Registration no. B-13.01282 issued by the RBI at Mumbai vide its certificated dated 07th August,1999. It has recently been taken over by Hindon Mercantile Limited and Mr Kapil Garg after making a public announcement for an open offer under the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011.
The company is facing litigations involving an amount quantifiable for Rs.56.81 cr. which raise a major concern. State Bank of India obtained an Order from Debt Recovery Tribunal (DRT), Bangalore against Kingfisher Airlines Limited, United Breweries (Holdings) Limited and Others for recovery of dues from them. In the earlier years, the Company received a garnishee order from the Recovery Officer, DRT, Bangalore claiming Rs. 25 cr. (plus interest) as the financial statements of Kingfisher Finvest India Limited (lender) reflected the amount due from the Company. The Company has contested the claim and deposited Rs. 11.26 cr. and investment in mutual fund of Rs. 5.54 cr. was attached by the recovery officer. The matter is presently pending before the Debt Recovery Appellate Tribunal, Chennai.
The company operates in a highly competitive and fragmented segment. The sudden downturn in its income for FY25 raises concern.
ISSUE DETAILS:
The company is coming out with its Rights Issue (RI) of 27930270 equity shares of Rs. 10 each at a fixed price of Rs. 450 per share to mobilize Rs. 125.69 cr. The RI opens for subscription on September 18, 2025, and will close on September 25, 2025. The company is offering RI in the ratio of 6 for 27 to its eligible stakeholders as of the record date of September 11, 2025. The company is asking for full money on application for number of shares applied. Post allotment, RI shares will be listed on BSE. The company is spending Rs. 0.69 cr. for this RI process, and from the net proceeds, it will utilize Rs. 125.00 cr. for augmenting its working capital.
The RI is self-managed by the company itself, and Adroit Corporate Services Pvt. Ltd. is the registrar to the issue.
Post-RI, company’s current paid-up equity capital of Rs. 12.57 cr. will stand enhanced to Rs. 15.36 cr. Based on the RI pricing, the company is looking for a market cap of Rs. 691.27 cr.
FINANCIAL PERFORMANCE:
On the financial performance front, for the last two fiscals, the company has (on a consolidated basis) posted total income / net profit, of Rs. 89.89 cr. / Rs. 59.45 cr. (FY24), and Rs. 14.14 cr. / Rs. 1.82 cr. (FY25). It marked boosted top and bottom lines for FY24, that raise eyebrows. It is operating in a highly competitive segment. Its NAV stood at Rs. 275.92 per share as of March 31, 2025.
DIVIDEND POLICY:
The company has paid an interim dividend of Rs. 3 per share in November 2023. It will adopt a prudent dividend policy, based on its financial performance and future prospects. However, the offer document is silent on its dividend policy.
SCRIP PERFORMANCE: BASED ON BSE WEBSITE DATA: SCRIP CODE: 507912 (FV Rs. 10).
The scrip last closed on cum-right basis at Rs. 617.45 on September 10, 2025, and opened on an ex-right basis at Rs. 604.95 on September 11, 2025. Since then, it has marked a high/low of Rs. 604.95 / Rs. 527.50. The scrip last closed at Rs. 534.10 as of September 17, 2025. For the last 52 weeks’ it has posted a high/low of Rs. 613.40 / Rs. 166.52. Based on its last traded price of Rs. 534.10, the RI is at a discount of around 15.75%.
The counter is currently under ASM LT: Stage 1.
The promoters’ holding has grown from 9.95% for Quarter end March 31, 2025, to 61.21% for quarter ended June 30, 2025. The counter is well managed above the RI price to tempt investors.
Conclusion / Investment Strategy
LFL is engaged in providing financial services as RBI registered NBFC. Recently this company was taken over by Hindon Mercantile Ltd. It marked sharp fall in its top and bottom lines for FY25 against FY24. It operates in a highly competitive and fragmented segment. The RI is aggressively priced making it “High Risk/Low Return” bet. Investors may stay away from this pricey RI.
Review By Dilip Davda on September 17, 2025
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. My reviews do not cover GMP market and operators game plans. Readers must consult a qualified financial advisor before making any actual investment decisions, based the on information published here. With entry barriers, SEBI wants only well-informed investors to participate in such offers. With crazy listings in the recent past, SME IPOs drew the attention of investors across the board and lead to seer madness. However, as SME issues have entry barriers and continued low preference from the broking community, any reader taking decisions based on any information published here does so entirely at their own risk. The above information is based on information available as of date coupled with market perceptions. The Author has no plans to invest in this offer.
About Dilip Davda
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 detailed fundamental and financial analysis of companies coming up with IPOs 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.
(Dilip Davda -SEBI registered Research Analyst-Mumbai,
Registration no. INH000003127 (Perpetual)
Email id: dilip_davda@rediffmail.com ).
Courtesy: https://www.chittorgarh.com/
