Review By Dilip Davda on September 4, 2024
Courtesy: https://www.chittorgarh.com/
- The company is providing one-stop solutions for any financial asset retrieving matters.
- After static performance for FY22 and FY23, it yielded the results as indicated by FY24 earnings.
- The company is poised for bright prospects ahead.
- Based on FY24 earnings, the issue appears fully priced, but post listing, it may witness fancy as the first mover in the segment.
- Investors may park funds for medium to long term.
ABOUT COMPANY:
Share Samadhan Ltd. (SSL) is a one-stop solution, providing a wide range of services aimed at helping clients efficiently to protect and retrieve their investments / money. These services include Investment retrieval through our company, Wealth Protection through Wealth Samadhan Private Limited, and litigation funding solutions through Nyaya Mitra Limited, thereby assistance in resolving various disputes regarding blocked investments in any asset class largely on a success fees model.
The company is in the business of Investment retrieval services, offering consultation on matters concerning unlocking value and resolving investor grievances related to various financial assets such as equity shares, preference shares, mutual funds, debentures, bonds, insurance, provident funds, deposits, bank accounts, debts and other asset classes. Further, it also assists in retrieval of unclaimed and unpaid dividends, interests, as well as addressing issues like old, lost, forgotten or damaged financial instruments such as physical shares, old mutual fund papers, old insurance / PF papers etc. and facilitating transfer and transmission processes and other allied services.
The company also offers wealth protection services through Wealth Samadhan Card. Wealth Samadhan Card is a comprehensive digital investment repository solution designed to safeguard and streamline the protection of investment information. This service offers clients a secure and straightforward way to record and store all their investment details in one place in an encrypted way. These services are offered through its subsidiary Wealth Samadhan Private Limited.
Further, SSL offers a spectrum of litigation funding solutions tailored to address the multifaceted nature of legal disputes through subsidiary, Nyaya Mitra Limited. It offers services in supporting cases relating to disputed property matters, high stake commercial dispute, management & shareholder’s dispute, family dispute, debtor recovery, alternative dispute resolution, overseas recovery, arbitration cases etc. Its mission is to ensure that every litigant has the opportunity to pursue their legal rights to fair compensation, unencumbered by financial limitations.
At SSL, its objective is twofold: to pioneer the industry in reclaiming unclaimed investments and all other asset classes, and to offer comprehensive solutions for safeguarding wealth. It aspires to empower investors globally to efficiently retrieve their assets through services. To realize this objective, it is committed to continually refining processes, expanding outreach, and staying abreast of industry trends and advancements. As of the date of RHP, it had 48 employees on its payroll.
ISSUE DETAILS/CAPITAL HISTORY:
The company is coming out with its maiden book building route IPO of 3251200 equity shares of Rs. 10 each to mobilize Rs. 24.06 cr. at the upper cap. It has announced a price band of Rs. 70 – Rs. 74 per share. The issue opens for subscription on September 09, 2024, and will close on September 11, 2024. The minimum application to be made is for 1600 shares and in multiples thereon, thereafter. Post allotment, shares will be listed on BSE SME. The issue constitutes 26.50% of the post-IPO paid-up capital of the company. From the net proceeds of the IPO, it will utilize Rs. 7.90 cr. for working capital, Rs. 3.56 cr. for unidentified acquisitions in India or abroad, Rs. 4.10 cr. investment in technology, and the rest for general corporate purposes.
The issue is solely lead managed by Narnolia Financial Services Ltd., and Skyline Financial Services Pvt. Ltd. is the registrar to the issue. Nikunj Stock Brokers Ltd. is the market maker for the company.
Having issued initial equity shares at par value, the company issued further equity shares in the price range of Rs. 107.80 – Rs. 138.00 between October 2018 and January 2024. It has also issued bonus shares in the ratio of 2 for 1 in November 2023, and 3 for 2 in March 2024. The average cost of acquisition of shares by the promoters is Rs. 1.34, and Rs. 1.52 per share.
Post-IPO, company’s current paid-up equity capital of Rs. 9.02 cr. will stand enhanced to Rs. 12.27 cr. Based on the upper IPO price band, the company is looking for a market cap of Rs. 90.80 cr.
FINANCIAL PERFORMANCE:
On the financial performance front, for the last three fiscals, the company has (on a consolidated basis) posted a total income/net profit of Rs. 2.42 cr. / Rs. 0.34 cr. (FY22), Rs. 2.76 cr. / Rs. 0.46 cr. (FY23), Rs. 9.96 cr. / Rs. 4.05 cr. (FY24).
For the last three fiscals, it has reported an average EPS of Rs. 2.63, and an average RoNW of 24.99%. The issue is priced at a P/BV of 5.91 based on its NAV of Rs. 12.52 as of March 31, 2024, and at a P/BV of 1.89 based on its post-IPO NAV of Rs. 39.19 per share (at the upper cap).
If we attribute FY24 earnings to its post-IPO fully diluted paid-up capital, then the asking price is at a P/E of 22.42. Thus prima facie the issue appears fully priced, but may get fancy post listing as he first mover in the segment.
For the reported periods, the company has posted PAT margins of 25.11% (FY22), 17.38% (FY23), 39.77% (FY24), but missing RoCE data respectively for the referred periods.
DIVIDEND POLICY:
The company has not declared any dividends for any financial year. It will adopt a prudent dividend policy based on its financial performance and future prospects.
COMPARISON WITH LISTED PEERS:
As per the offer document, the company has no listed peers to compare with.
MERCHANT BANKER’S TRACK RECORD:
This is the 12th mandate from Narnolia Financial in the last two fiscals (including the ongoing one), out of the last 11 listings, 1 opened at discount, and the rest listed with premiums ranging from 4.35% to 110.36% on the date of listing.
Conclusion / Investment Strategy
The company is providing financial asset related solutions under one roof and has proved its mettle as indicated by FY24 earnings. Based on FY24 performance, the issue appears fully priced. Post listing, the scrip is likely to witness fancy as a first mover in the segment. Though the scrip appears fully priced prima facie, investors may park funds for medium to long term rewards.
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 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.
(Dilip Davda -SEBI registered Research Analyst-Mumbai,
Registration no. INH000003127 (Perpetual)
Email id: dilip_davda@rediffmail.com ).
