Naysaa Securities SME IPO-Should you invest?

Naysaa Securities SME IPONaysaa Securities SME IPO-Should you invest?

Naysaa Securities Limited is coming up with a public issue IPO of 10 L Shares and raising Rs 1.5 Crores. Naysaa Securities IPO is priced at Rs 15 per share. There are several negative points about this SME IPO. What should be your call on this Naysaa Securities IPO? Should you invest in Naysaa Securities SME IPO? What are the risk involved in this SME IPO?

About Naysaa Securities Limited

Naysaa Securities Limited is headquartered in Mumbai and operate through registered office. They are a diversified financial services company in India offering products & services covering equity broking and equity derivatives to all kinds of investors, namely, retail, high net worth individuals and Corporates.

Also Read: How NRI's can invest in mutual funds in India?

Issue details of Naysaa Securities IPO

  • IPO opens: 5-Sep-2014
  • IPO closes: 12-Sep-2014
  • Face value: Rs 10 per share
  • Issue price: Rs 15 per share (Including Rs 5 premium)
  • Minimum investment: Rs 120,000
  • Minimum shares to be invested: 8,000 and multiples of 8,000 each
  • No of shares: 10 Lakh shares
  • Issue size: Rs 1.5 Crores
  • Lead Managers: Guiness Corporate Advisors Limited
  • Listing: BSE  SME platform
  • Download Naysaa Securities IPO Prospectus from SEBI website here

Purpose of the IPO

The funds would be used for the following purposes.

  • Expand domestic operations and network of branches
  • Enhancement of margin money maintained with the exchanges
  • General corporate purposes
  • Public Issue expenses.

Company Financials

  • Company generated revenue of Rs 7,212.5 Lakhs for the year ended Mar-10 and Rs 708.27 Lakhs for the year ended Mar-14. Means, its revenues have declined by 90% in the last 5 years.
  • Company posted a profit of Rs Rs 1,000 for the year ended Mar-10 and a profit of Rs 1.03 Lakhs for the year ended Mar-2014.

Naysaa Securities SME IPO-Financials

Reasons to invest Naysaa Securities IPO


Reasons not to invest in an Naysaa Securities IPO

  • Company revenues are inconsistent. Its revenues declined by 90% in last 5 years. Even FY 2013 revenues were Rs 2,677 Lakhs, however FY 2014 revenues are Rs 708 Lakhs only. With such inconsistencies, we cannot predict how the company would perform in the future.
  • It earned a profit of just Rs 1,000, 5 years back and Rs 1 Lakh now in FY2014. With such thin margins, shareholders are not going to enjoy any profits.
  • Business restricted to Mumbai Suburb only.
  • It incurred Rs 0.17 Lakhs loss in FY 2011-12.
  • Promoter group company has incurred losses in the last few years ((Vikram Shares and stock broking)
  • It has negative cash flows in 4 out of last 5 years. This indicates that it need to borrow loans for high rate of interest and has difficulty in managing working capital requirements. This would affect the profits of the company.
  • SME IPO’s are trading on low volume. Liquidity of such shares could be an issue. Stock brokers can easily manipulate the price of the stock.

Also Read: Ways to get maximum interest from PPF

Recommendation / Investment strategy:

  • On an issue price of Rs 15, based on FY 2014 EPS of Rs 0.14, P/E Ratio works out to be 107 times. Based on last 3 years Avg EPS of Rs 0.09, P/E ratio works out to be 167 times. Its competitors P/E Ratio is 583 (Highest) and 5.3 (Lowest) and average at the industry level is 18. Considering 105 / 167 P/E ratio of Naysaa Securities IPO, it shows the issue price is very very high.
  • Naysaa Securities IPO has several negative factors. Revenues are inconsistent, profits are pathetic and almost zero and promoter group performance is not good. I am surprised how such companies being allowed by Indian regulator to raise money from the public. I would advise investors to stay away from such IPO’s and they should be very, very cautious before thinking of investing in such companies.

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Naysaa Securities SME IPO


  • Mohan

    Hi Suresh,

    I've been reading your blog from a short time. It's very informative. I make sure I've gone through your previous posts as well . 

    I see a lot of posts about IPOs etc but can you explain me (or maybe you've already explained) the detailed process on how one would go about investing in IPOs ?

    Like who is the agent or do we need a demat account ? Or can we directly but it from company?

    I've heard that only selected people(known to company officials) are given the options to buy/invest in IPOS?

    Kindly help me with these details


    • You can open demat account and you can straight away invest in IPO’s. You can look for ICICI or fundsindia or any other stock broker offering online services

  • Marcus

    Dear Suresh, Thank you very much for your valuable advise and alert on this IPO. Take care. Marcus

  • Vignesh

    Hi Suresh,

    Thank you very much for your article. Actually, i was personally expecting your reviews on the Upcoming IPOs as i am new to Share Market and IPOs. I am applying the IPOs which you recommends in the recent past.

    I have few clarifications.

    1. When will the SnowMan IPO be confirming the allotment of shares. Actually i applied through ASBA mode. So, my money is still on hold in my account and it is not yet released.

    2. Please write add on article on the Sharda Cropchem, if the prospectus is released. Because, we are not aware about the lot size in the last article.

    • ABSA is the good option, money is blocked, but would be debited. Once refund is released by Snowman, these are released and available for you. 2) Min 90 share scan be applied for sharda cropchem and multiples of 90 shares there of

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