Alacrity Securities IPO – Avoid

Alacrity Securities IPO – AvoidAlacrity Securities IPO – Avoid

After few months gap, there is one more SME IPO which is currently came up for subscription. Alacrity Securities IPO has hit the market yesterday. Mumbai based Alacrity Securities is issuing 60 Lakh equity shares @ Rs 15 per share. All listed SME IPO’s whether good or bad has been providing good listing gains to investors. Should we subscribe to Alacrity Securities IPO?

About Alacrity Securities Ltd

Alacrity Securities is diversified into financial services which offers wide range of products of equity broking, F&L and currency derivatives to all investors. It engages in the business brokerage services and peer group comparison of accounting ratios.

Also read: IPO investments gave 39% returns in the last 6 months (Jan-2013 to Jun-2013)

Issue details:

  • IPO opens: 29-Jul-2013
  • IPO closes: 1-Aug-2013
  • Face value: Rs 15
  • Issue price: Rs 15
  • Minimum bid: 8,000 shares and in multiples of 8,000 shares thereon
  • Maximum shares for Retail investors: 8,000 shares
  • Minimum investment: Rs 120,000
  • Lead managers: Guiness Corporate Advisors Ltd
  • Listing: BSE SME
  • Prospectus:

Purpose of the IPO:

The funds would be used for the following purposes.

  • Expand domestic operations and network of branches
  • Enhancement of margin money maintaining with the exchanges
  • Brand building and promotional activities
  • General Corporate purpose

Company financials

Company revenues have grown from Rs 4.96 Crores in FY2008 to Rs 25.63 Crores in FY2013.

Coming to profits, company has posted 23.4% margins in FY2008 and -3.28% (Loss) in FY2013.

Alacrity Securities IPO – Avoid

Reasons to invest in Alacrity Securities IPO


Reasons not to invest in Alacrity Securities IPO

The revenues for FY 2013 include abnormal income due to sale of shares. The income from core business is only Rs 94 Lakhs for year ended Mar-2013.

Profits are in down trend. FY 2012 shows 0.75% and FY2013 shows a loss of -3%.

Also Read : Best ELSS Mutual Funds to invest in India for tax savings

Recommendation / Investment strategy: Average EPS for the last 3 years is Rs 0.99. The minimum investment required is Rs 1.2 lakhs. The SME IPO’s listed are trading with very low volume and the liquidity has been a problem. There is nothing positive to invest in this IPO. Considering all these negative points, my suggestion to investors is to be little cautious before going for such IPO.

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Alacrity Securities IPO – Avoid

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