How are brokerages/experts viewing Microsec Financial IPO?

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How are brokerages/experts viewing Microsec Financial IPO?

The initial public offering of Kolkata based Microsec Financial Services has been fully subscribed on the first day itself.

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The initial public offering of Kolkata-based Microsec Financial Services has been fully subscribed on the first day itself. The company is offering 1.25 crore equity shares through this issue, which will close on September 21. Its price band is at Rs 113-118 a share.

There were mixed opinions from brokerage houses as well as experts on issue. Investment Advisor, SP Tulsian has recommended avoiding this issue while Manish Bhatt of Prabhudas Lilladher says, one should subscribe with listing gains.

Tulsian said, "The company is operating on a very low scale, they have topline of less than Rs 60 crore. On an equity of about Rs 19 crore plus, they have an earning per share (EPS) of Rs 12-13. They are mobilising major chunk of the money for increasing their finance activities, largely for financing against the shares and all that. I don't think that this kind of business can really be EPS accretive for the company because they will be seeing a huge dilution in the equity may be from Rs 19 crore plus to about Rs 31 crore- Rs 31.5 crore."

"This company again can very well get compared with a existing listed peer like Emkay Global, those who have a market cap of Rs 210- Rs 215 crore as of today with a topline of Rs 115 crore for FY10. This company will be asking for a market cap of close to Rs 350 crore. I don't think that someone having a presence in the eastern region can be able to enjoy or capitalise on the booming financial services market. So, I will give a pass to the issue," he said.