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Zerodha (Trading Account)
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• GFSL is an investment service provider offering all related business under one roof.
• It marked inconsistency in its financial performance for the reported periods.
• The RI is attractively priced at a discount of around 63+% based on its last traded price.
• Investors may park funds for the medium to long term.
ABOUT COMPANY:
Geojit Financial Services Ltd. (GFSL) is an investment services provider in India with a history spanning over three decades since incorporation in 1994. It has a presence in the Middle East with subsidiaries, joint ventures, and partnerships with local banks and financial institutions in that region.
The company has been a significant player in the Indian capital market arena with assets under custody and management of Rs. 103350.00 cr. as on June 30, 2024. It has multi-channel customer support points, such as, offline branches, centralized dealing desks, online web support and mobile applications and serve a client base of more than 14.12 lakh customers as on June 30, 2024.
It provides various services, such as, advisory, financial product distribution and equity and commodity and offer a wide range of financial products and services, including stock and currency derivatives, portfolio management, mutual fund and insurance distribution, online financial planning, and commodity derivatives and have a wide network with 497 offices in India and six overseas through joint ventures. GFSL is a SEBI registered investment advisor and provide customized solutions and personalized advice to customers. It has pioneered online trading in equities in India & commodity trading in rubber, pepper, other commodities contracts.
ISSUE DETAILS:
The company is coming out with its Rights Issue (RI) of 39857413 equity shares of Re. 1 each at a fixed price of Rs. 50 per share to mobilize Rs. 199.29 cr. The RI opens for subscription on October 15, 2024, and will close on October 23, 2024. The company is offering RI in the ratio of 1 for 6 to its eligible stakeholders as of the record date of October 07, 2024.The full amount is to be paid on application for number of shares applied. Post allotment, shares will be listed on BSE and NSE. The company is spending Rs. 5.39 cr. for this RI process, and from the net proceeds, it will utilize Rs. 150.00 cr. for repayment/prepayment of certain borrowings, and Rs. 43.90 cr. for general corporate purposes.
The issue is solely lead managed by DAM Capital Advisors Ltd., and Link Intime India Pvt. Ltd. is the registrar to the issue.
Post-RI, company's current paid-up equity capital of Rs. 239.14 cr. will stand enhanced to Rs. 279.00 cr. Based on the RI pricing, the company is looking for a market cap of Rs. 1395.01 cr.
FINANCIAL PERFORMANCE:
On the financial performance front, for the last three fiscals, it has (on a consolidated basis) posted a total income/net profit of Rs. 501.13 cr. / Rs. 150.70 cr. (FY22), Rs. 447.63 cr. / Rs. 96.46 cr. (FY23), and Rs. 623.97 cr. / Rs. 143.22 cr. (FY24). For Q1 of FY25 ended on June 30, 2024, it earned a net profit of Rs. 44.54 cr. on a total income of Rs. 181.18 cr. It marked steady growth in its top and bottom lines for the reported periods. Its NAV stood at Rs. 34.78 as of March 31, 2024.
DIVIDEND POLICY:
The offer document is silent on its dividend policy. It has paid a dividend of 300% for FY22, and 150% for FY23 and FY24, and will continue to follow prudent dividend policy based on its financial performance and future prospects.
SCRIP PERFORMANCE: BASED ON BSE WEBSITE DATA: SCRIP CODE: 532285 (FV Re. 1).
The scrip last closed on cum-right basis at Rs. 165.60 on October 04, 2024, and opened on an ex-right basis at Rs. 141.05on October 07, 2024. Since then, it has marked high/low of Rs. 147.70 / Rs. 128.40. The scrip last closed at Rs. 137.85 as of October 11, 2024. For the last 52 weeks' it has posted a high/low of Rs. 159.30 / Rs. 46.13. The counter is currently under ASM LT: stage 1.
The promoters' holding has been constant at 54.59% for the last three quarters ended June 30, 2024. The counter is well managed and quoting above the RI price.
Based on its last traded price, the RI is at a discount of around 63.73%, and makes it a worthy bet.
Review By Dilip Davda on October 12, 2024
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 the information published here. My reviews do not cover GMP market and operators game plans. Any reader taking decisions based on any information published here does so entirely at their 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.
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 ).
The Geojit Financial Services Rights Issue 2024 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 Geojit Financial Services Rights Issue 2024 worth investing. The Geojit Financial Services Rights Issue 2024 Note sets the Rights Issue expectations in systematic way which tells you if Geojit Financial Services Rights Issue 2024 good to buy (good or bad / yes or no). The Rights Issue Forecast tells you weather to invest in Geojit Financial Services Rights Issue 2024 by providing Rights Issue recommendations i.e. subscribe, avoid and neutral.
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