Akme Fintrade (India) Ltd

Akme Fintrade (India) Limited is a non-banking finance company (“NBFC”) incorporated in the year 1996 registered with the Reserve Bank of India as a Non-systemically important non-deposit taking company with over two decades of lending experience in rural and semi-urban geographies in India. They are primarily engaged in rural and semi-urban centric lending solutions to look after the needs and aspirations of rural and semi-urban populace. The portfolio includes Vehicle Finance and Business Finance Products to small business owners.  Company's digital lending platform www.aasaanloans.com is currently under development and will be rolled out in a phased manner. This digital lending platform, www.aasaanloans.com, has been currently deployed to a select group of users for the purpose of User Acceptance Testing (UAT), specifically focusing on Two-wheeler finance as the initial phase. Concurrently, the IT team is actively engaged in developing the product for loan against property, commercial vehicle financing, and secured business loans, which will be introduced in a phased manner. Company has the footprints in rural and semi-urban geographies in 4 Indian states Rajasthan, Maharashtra, Madhya Pradesh and Gujarat through registered office located at Udaipur, Rajasthan, the Corporate Office located in Mumbai, Maharashtra, 12 branches and over 25 points of presence including digital and physical branches having served over 2,00,000 customers till date. For FY21, FY22, FY23 and upto Q3 FY24 total AUM of company were Rs 421.01/- Cr, Rs 351.32/- Cr, Rs 354.16/- Cr and Rs 379.46/- Cr, Gross NPA 3.57%, 4.90%, 4.57% and 3.94%, also Net NPA 2.97%, 4.06%, 3.45% and 1.94% respectively. As per financial performance, Akme Fintrade (India) Limited has posted total income / net profits of Rs 86.79 Cr / Rs 16.30 Cr (FY21), Rs 67.50 Cr / Rs 4.12 Cr (FY22), Rs 69.56 Cr / 15.80 Cr (FY23) and Rs 53.44 Cr / Rs 12.24 Cr (Q3 FY24). So as per previous financials data, company has shown zig-zag results. Company has an average EPS of Rs 4.60 and average RoNW of 7.92% for last three fiscals. Issue is priced at a P/BV of 1.75 as per NAV of Rs 68.51/- as on 31.12.23. If we attribute latest earnings of FY22, FY23 and annualised FY24 on fully diluted equity post issue, then asking price is at a P/E of around 124.27, 32.41 and 31.36 respectively, which looks fully priced. As per RHP, comparision between listed peers is shown in above table. On BRLM's front, one lead manager is associated with this IPO, and have handled around 22 SME IPOs in last three fiscals. Gretex Corporate Services Limited: This is 1st Main Board IPO from this BRLM. From last 10 SME IPOs, two opened below issue price and remaining opened above or at par issue price on the day of listing. As of now, from last 10 SME IPOs, two are trading below issue price and remaining are trading above issue price. ( As on 14.06.2024) As per financials, Akme Fintrade (India) Limited has shown zig-zag results, RoNW is 9.25% and P/E is respectively 124.27, 32.41 and 31.36 as per FY22, FY23 and annualised FY24 earnings. So, issue looks fully priced. Company is an NBFC and operating in rural and semi-urban area, which is highly competitive and fragmented business segment. The growth of the sector will be good. So, we give AVOID rating for this IPO. Readers must consult a qualified financial advisor prior to making any actual investment decisions.

• 1 Mr. Nirmal Kumar Jain
• 2 Ms. Manju Devi Jain
• 3 Mr. Dipesh Jain
• 4 Nirmal Kumar Jain (HUF