Akme Fintrade IPO - Investment Rationale, Financials, Strength, Risks And More: Anand Rathi

Anand Rathi Report

Akme Fintrade (India) Ltd. launched its initial public offering today and the offer for subscription will close on June 21. A non-banking finance company has set a price band of Rs 114–120 per share. The minimum lot size will be 125 shares

The Rs 132 crore comprises a fresh issue of 1.1 crore equity shares with no offer-for-sale component.

Objects of fresh Issue

• augmenting the capital base of the company to fulfil its future capital requirements

• meeting Issue-related expenses.

Valuation

Akme Fintrade is well established vehicle Finance, small businesses lending business with customer centric approach and deep understanding of target customers and access to diversified sources of capital and effective asset liability management along with Hub and Spoke business model that improves efficiencies and decreases costs.

At the upper price band company is valuing at P/E of 27.64 times, price/book of 1.52 times with a market cap of Rs 5,121 million post issue of equity shares and return on net worth of 7.72%.

We believe that the IPO is fairly priced and recommend a “Subscribe- Long Term” rating to the IPO.

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