Beacon Trusteeship Limited is a SEBI registered Debenture Trustee vide Registration No. IND000000569, which provides wide range of trusteeship service across various sectors such as Debenture Trustee Services, Security Trustee Services, Trustee to Alternate Investment Fund (AIF), Trustee to ESOP, Securitization Trustee, Bond Trusteeship Services, Escrow Services, Safe keeping and other allied services. The company is currently managed by group of professionals having extensive experience in the field of Investment Banking, Finance, Debt Syndication and financial services at large. The company provides trusteeship services by acting as intermediary between the issuer company or entity and investors. The Company with the help of a technology, a dedicated legal and compliance team for each of the products viz. Debenture Trusteeship, Security Trustee for Loans, Alternative Investment Funds, Securitization and Escrow, They are able to execute transactions as per the clients’ needs. The company has built its own client-facing ERP System, a dedicated platform for Securitization & a Covenant Monitoring Tech Platform, demonstrating the adaption and flexibility to the new age business and ease of doing business for the customers. Information Security Management System, showing the execution capabilities and efficiency in the operations. They have recently expanded the locational presence by opening Business office at Gujarat International Finance Tec-City (GIFT) which is an International Financial Services Centre (IFSC) in order to increase the reach and to obtain various regulatory advantages. The company has locational presence in more than 15 cities in India including major cities such as Mumbai, Delhi, Chennai, Hyderabad, Jaipur, Bangalore, Chandigarh, Indore, Kolkata, Lucknow and Gandhinagar whether through regional offices or signatories. As a Debenture Trustee, the company enters into a formal agreement with the Issuer company who is desired to issue Debentures of any type including Non-Convertible Debentures. The terms & scope of the work is generally governed by such formal agreements apart from the regulatory obligations applicable to them from SEBI, RBI or any other competent authority. The company as a trustee conducts Due-diligence and periodic monitoring, ensure compliance with SEBI (Debenture Trustee) Regulations, 1993, SEBI (Issue and Listing of Non-Convertible Securities) Regulations, SEBI LODR Regulations and relevant applicable circulars and guidelines. The company also provide service as an Escrow and Monitoring agent, whereby the client appoints them as the monitoring agent to ensure outward remittance from the Escrow Account are credited only to the Special Purpose Collection Account or any other account as specified in the formal agreement. The scope of work includes Drafting & Vetting of Escrow Agreement, Set up of Escrow Mechanism, Documentation and timely monitoring services. The company proposed to invest in technological infrastructure, expand the service operations domestically and internationally from the Net offer proceeds. The company has acquired Beacon Investor Holdings Private Limited (Formerly known as Beacon RTA Services Private Limited) as a Wholly Owned Subsidiary as on April 05, 2024 and will Make Investment through Equity for the License of Depository Participant and Registrar & Share Transfer Agent. As per financial performance, Beacon Trusteeship Limited has posted total income / net profits of Rs 10.49 Cr / Rs 3.62 Cr (FY22), Rs 15.72 Cr / Rs 3.85 Cr (FY23) and Rs 20.91 Cr / Rs 5.16 Cr (FY24). So as per previous financials data, company has shown good growth. Company has posted an average EPS of Rs 3.18 and average RoNW of 28.56% for last three fiscals. Issue is priced at a P/BV of 4.44 as per NAV of 13.50 as on 31.03.24. If we attribute latest earnings of FY22, FY23 and FY24 on fully diluted equity post issue, then asking price is at a P/E of around 29.97, 28.18 and 20.99 respectively, which looks fully priced. As per RHP, there is a no listed peers. On BRLM's front, Beeline Capital Advisors Private Limited is associated with this SME IPO and handled 38 SME IPOs in last 3 year. From last 10 SME IPOs, all opened above issue price or at par on the day of listing. As of now from last 10 SME IPOs, all are trading above issue price. ( As on 22.05.24 ) As per financials, Beacon Trusteeship Limited has shown good growth, RoNW is 26.95% and P/E is respectively 29.97, 28.18 and 20.99 as per FY22, FY23 and annualised FY24 earnings. So, issue looks fully priced. Company provides wide range of trusteeship service across various sectors such as Debenture Trustee Services, Security Trustee Services, Trustee to Alternate Investment Fund (AIF), Trustee to ESOP, Securitization Trustee, Bond Trusteeship Services, Escrow Services, Safe keeping and other allied services. BRLM performance is good. So, we give NEUTRAL rating for this IPO. Readers must consult a qualified financial advisor prior to making any actual investment decisions.
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