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• The company is engaged in digital transformation services focusing on cyber security.
• It has posted an average financial performance with fluctuation profits on almost static top lines.
• The issue appears aggressively priced, based on its performance so far.
• There is no harm in skipping this "High Risk/Low Return" pricey offer.
PREFACE:
The company came with its maiden IPO in May 2022 at a price of Rs. 29 per share to mobilize Rs. 10.13 cr. The mandate was with Fast Track Finsec Pvt. Ltd. and Nirman Share Brokers Pvt. Ltd. as the market maker. For this RI while it is being managed by the company on its own, info on market maker is missing from the offer document. The current market lot for the scrip is 1000 shares while market lot for RI is specified as 750 shares by the designated exchange.
ABOUT COMPANY:
Globesecure Technologies Ltd. (GTL) is a digital transformation company in India with a focus on cyber security. It has executed several cyber security transformation projects, infrastructure, and digital transformation projects for various institutions and also provide similar independent services to clients. Through its wide range of offerings across multiple verticals, the company possesses capabilities spanning the digital lifecycle of services ranging from consultation, architecture, solution design, and implementation, to monitoring and providing managed services.
The company classifies its business into the following lines of business: (i) Cyber Security, (ii) Integrated Enterprise Solutions, and (iii) Managed Services. As of July 02, 2024, it had 14 employees on its payroll.
ISSUE DETAILS:
The company is coming out with a Rights Issue (RI) of 6831261 equity shares of Rs. 10 each at a fixed price of Rs. 40 per share to mobilize 27.33 cr. The RI has already opened on July 25, 2024, and will close on August 02, 2024. The company is offering RI in the ratio of 3 for 4 to its eligible stakeholders as of the record date of July 12, 2024. The full amount is to be paid on application for the number of shares applied. Post allotment, shares will be listed on NSE SME Emerge. It is spending Rs. 0.95 cr. for this RI process, and from the net proceeds, it will utilize Rs. 19.54 cr. for incremental working capital, and Rs. 6.83 cr. for general corporate purposes. The market lot for trading of Rights Entitlements will be decided by the Stock Exchange and will be marketable in such lots only. The present tradable market lot of the company is 1000 shares and in multiples thereon. Surprisingly, the info on its market lot for RI is missing and also this being NSE SME Emerge RI, the market maker info it also not available in the offer document. However, as per NSE Website, the market lot for RI is indicated as 750 shares.
The RI is self-managed by the company itself and Skyline Financial Services Pvt. Ltd. is the registrar to the issue.
Post-RI, its current paid-up equity capital of Rs. 9.11 cr. will stand enhanced to Rs. 15.94 cr. Based on the RI pricing, the company is looking for a market cap of Rs. 63.76 cr.
FINANCIAL PERFORMANCE:
On the financial performance front, for the last three fiscals, the company has posted a total revenue of Rs. 26.61 cr. / Rs. 1.00 cr. (FY22), Rs.25.85 cr. / Rs. 1.66 cr. (FY23), Rs. 25.01 cr. / Rs. 1.01 cr. It marked almost static top line with fluctuating bottom lines for the reported periods.
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 NSE WEBSITE DATA: SCRIP CODE: GSTL (FV Rs. 10).
The scrip last closed on cum-right basis at Rs. 47.00 on July 11, 2024, and opened on an ex-right basis at Rs. 46.70 on July 12, 2024. Since then, it has marked a high/low of Rs. 49.00 / Rs. 43.20. The scrip last closed at Rs. 43.30 as of July 25, 2024. For the last 52 weeks' it has posted a high/low of Rs. 126.89 / Rs. 35.00.
The promoters' holding has been constant at 35.80% for the last three quarters ended with June 30, 2024. The counter is well managed above the RI price to tempt investors.
Review By Dilip Davda on July 25, 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. 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 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 Globesecure Technologies 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 Globesecure Technologies Rights Issue 2024 worth investing. The Globesecure Technologies Rights Issue 2024 Note sets the Rights Issue expectations in systematic way which tells you if Globesecure Technologies Rights Issue 2024 good to buy (good or bad / yes or no). The Rights Issue Forecast tells you weather to invest in Globesecure Technologies Rights Issue 2024 by providing Rights Issue recommendations i.e. subscribe, avoid and neutral.
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