Galactico Corporate Services Limited

Started in 2015, Galactico Corporate Services Limited is engaged in providing diversified financial services. The company manages investment advisory, fundraising activities, and underwriting of issues. Galactico also works as an advisor, manager and consultant to an issue. It is also a SEBI authorised category-I merchant banker offering IPO advisory, debt syndication, Takeovers, Business Modeling, Merger & Acquisitions services, etc. The company provides such services to small and mid-sized enterprises (SMEs). The registered office of the company is located in Nasik and other branch offices in Mumbai, Jalgaon and Jaipur. Galactico has primarily two subsidiaries which are Instant Finserve Private Limited and Seven Hills Beverages Limited. Seven Hills is engaged in manufacturing of drinking water. Instant Finserve Private Limited is focused on debt finance and financial consultancy related business. As per the financial performance front, Gelatico has posted turnover/net profits of Rs. 16.54 cr. / Rs. 1.35 cr. (FY18) and Rs. 19.19 cr. / Rs. 1.42 cr. (FY19) on consolidated basis. Company has posted turnover/net profits of Rs. 0.52 cr. / Rs. 0.32 cr. (FY17), Rs. 1.60 cr. / Rs. 0.85 cr. (FY18) and Rs. 1.97 cr. / Rs. 0.74 cr. (FY19).    For last three fiscals, Gelatico has posted an average EPS of Rs. 1.31 and an average RoNW of 6.23% on standalone basis whereas it has posted average EPS of Rs. 2.09 and an average RoNW of 7.65% on consolidated basis. The issue is priced at a P/BV of 1.02 and 0.83 on the basis of its NAV of Rs. 22.66 and 27.77 post issue for standalone and consolidated basis respectively. If we take FY19 consolidated earnings and attribute it on fully diluted equity post issue, then asking P/E is around 9.3, which is fully priced in current market scenario.  On BRLM's front, for Aryaman Financial Services Private Limited this is the 35th IPO in last three fiscals and from last 10 IPOs, two opened below issue price and remaining opened above issue price with 0.05% to 2% premium on the day of listing. As of now, from last 10 IPOs, two are trading below issue price and remaining above issue price. ( As on 20.09.2019 ) Company has shown good results on consolidated basis, RoNW 7.64% and issue looks fully priced. Seven Hills Beverages, subsidiary of Galatico, planned IPO in August 2017 and then withdrew on the day of opening for some technical internal matters. Standalone performance of company is not so impressive and also performance of BRLM is average. Also the entire financial services sector is in worst condition. So we give NEUTRAL rating to this SME IPO.

• 1 Mr. Vipul Lathi