Beacon Trusteeship IPO Review

BTL is a company that provides trusteeship services, acting as a middleman between companies issuing securities and the investors. As a Debenture Trustee, BTL's key roles include conducting due diligence, offering custodial services, monitoring compliance, managing documentation, making disclosures, and keeping records. The company helps maintain investor confidence by safeguarding their interests and ensuring transparency and accountability. BTL utilizes technology and has dedicated legal and compliance teams for its various products, including Debenture Trusteeship and Security Trustee for Loans. It is recognized for its capabilities in information security management and operational efficiency.

Managed by a team of professionals with extensive experience in investment banking, finance, debt syndication, and financial services, BTL has shown significant growth. The company's revenue increased from Rs. 10.03 crore in FY22 to Rs. 14.81 crore in FY23, and further to Rs. 19.92 crore in FY24, marking a nearly 100% growth over two years. The profit after tax (PAT) also rose from Rs. 3.62 crore in FY22 to Rs. 3.85 crore in FY23, and reached Rs. 5.16 crore in FY24. Additionally, the EBITDA margin improved from Rs. 4.88 crore in FY22 to Rs. 5 crore in FY23, and then to Rs. 6.89 crore in FY24.

The company's pre-issue EPS is Rs. 3.64 with a P/E ratio of 16.48. After the issue, the EPS is expected to be Rs. 2.86 with a P/E ratio of 20.99. With a return on net worth (RONW) of 26.95% and a return on equity (ROE) of 31.12% in FY24, the IPO is considered fully priced. BTL has posted consistent growth in its revenue and profit, making it an attractive investment opportunity.

The Grey Market Premium (GMP) indicates potential listing gains of 30% - 50%. Given the company's steady financial performance and the valuation of the IPO, we recommend avoiding the IPO for short-term listing gains or investment purposes. However, well-informed investors might consider investing for the medium to long term.