Beacon Trusteeship is a company that provides trusteeship services, acting as a middleman between companies issuing securities and the investors.

Beacon Trusteeship IPO, a book-built issue amounting to Rs 32.52 crores, consists of a fresh issue of 38.72 lakh shares aggregating to Rs 23.23 crores and an offer for sale of 15.48 lakh shares totaling Rs 9.29 crores. The subscription period for the IPO opens on May 28, 2024, and closes on May 30, 2024. The allotment is expected to be finalized on Friday, May 31, 2024, with a tentative listing date on the NSE SME scheduled for Tuesday, June 4, 2024.

The price band is set at ₹57 to ₹60 per share, with a minimum lot size of 2000 shares. Retail investors are required to invest a minimum of ₹120,000, while the minimum investment for High-Net-Worth Individuals (HNIs) is 2 lots (4000 shares), amounting to ₹240,000.

Beeline Capital Advisors Pvt Ltd is the book-running lead manager, Kfin Technologies Limited is the registrar, and Spread X Securities is the market maker for the IPO.

Objective

The Net Proceeds will be utilized towards:

1. Building Up Technology Infrastructure for their existing business.
2. Investment in Wholly owned subsidiary i.e. Beacon Investor Holdings Private Limited, to commence the services of Depository Participant and Registrar & Share Transfer Agent.
3. Purchase of New Office Premises.
4. General Corporate Purpose.

The company is dedicated in investing in technology to derive the growth. Currently, they  use Beacon ERP and Beacon Prosec software system and they intend to expand operations by broadening and deepening service offerings. This will help the company to increase the productivity by automating workflows and using better search capabilities.

Company intends to extend their Current Service Portfolio as a Debenture Trustee and enter into the Services provided by Depository Participant and Registrar & Share Transfer Agent through its wholly owned subsidiary i.e. Beacon Investor Holdings Private Limited (Formerly known as Beacon RTA Services Private Limited).

Currently, Company is operating from registered office situated Bandra, Maharashtra, India. With Purchase of New Premises, the client officials gets confidence when the personally visits the office premises resulting into good mileage over the existing and proposed business.

Grey Market Premium (GMP) of Beacon Trusteeship

The Grey Market Premium is expected in the range of Rs. 18 to Rs.30 based on the growth and performance of the company. No real trading is done on the basis of Grey Market Premium that's why no real discovery of price can be done before the listing of shares on the stock exchange. The Grey Market Premium totally depends upon the Demand and Supply of the shares of the company in unorganized manner which is not recommended. The Grey Market Premium is mentioned for educational and informational purposes only.

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About Beacon Trusteeship Limited

BEACON TRUSTEESHIP LIMITED, 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.

Company provides trusteeship services by acting as intermediary between the issuer company or entity and investors. Company as a Debenture Trustee plays a pivotal role in Scope of work under trusteeship services includes Due diligence, Custodial services, Monitoring compliance, Documentation, Disclosures, Record keeping etc.

With the help of a technology, a dedicated legal and compliance team for each of products viz. Debenture Trusteeship, Security Trustee for Loans, Alternative Investment Funds, Securitization and Escrow, they execute transactions as per clients’ needs.

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.

Debenture Trustee, company enters into a formal agreement with the Issuer company who is desired to issue Debentures of any type including Non-Convertible Debentures. They conduct Due-diligence and periodic monitoring, ensure compliance with SEBI, SEBI LODR Regulations and relevant applicable circulars and guidelines.

Trustee to AIF, company enters into formal agreement with “Settlor” who desires to set up the AIF and appoints Company as trustee under the same agreement. Duties include Appointment of Investment Manager, holding trust fund for the benefit of the Beneficiaries, make application to SEBI for the granting of certificate of registration, maintain books of accounts, maintain confidentiality as regard to the Investments and such other matters as per the respective agreements.

As Securitization Trustee, Company settles trust for the purpose of securitization. The seller assigns such receivables in accordance with agreement to the Settled trust and monitors periodic collections arising out of such receivables. Duties includes sharing of timely statements to investors, ensure timely investor pay-outs, ensuring Investments of trust property is in accordance with the agreement, segregation of assets and ensuring all transactions are properly entered in accordance with the agreement.

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. This includes Drafting & Vetting of Escrow Agreement, Set up of Escrow Mechanism, Documentation and timely monitoring services.

Industry

The Indian debt market is fairly large, with the bond market presently sized at around $2.34 trillion. Of this, $1.83 trillion is dedicated to government bonds, while $510 billion is allocated to corporate bonds (as of Mar-22, Source: CCIL, SEBI). Government bonds constitute 78% of the overall outstanding bonds in the country, while corporate bonds account for 22% of the market. Over the past five years, starting from March 2018, the total outstanding bonds have witnessed a remarkable growth of 77%, with government bonds experiencing an 85% rise and corporate bonds increasing by 53%.

The outstanding market size is growing at a CAGR of 12.6% FROM FY18 – 23. With the growing importance of investment for higher GDP growth, there is an urgent need for alternative sources of financing; and the corporate bonds market can play an important role here. A well- developed and smooth functioning corporate bonds market serves as an important driver of economic growth as it provides an additional source of long-term finance for industry.

In fact, ideally there should be matching of long-term projects with long term finance and the bond market offers an avenue for the same. In India, RBI and SEBI have taken various steps to develop and strengthen the corporate bonds market. However, while the size of the corporate debt market has expanded, it still remains relatively underdeveloped relative to the bank credit segment.

Risk associated to the business:

• The company is subject to SEBI governed regulatory body and other government agencies. Changes in regulations could impact on the business model of the company and increase costs.
• The trustee industry in India is becoming increasingly competitive. Trustee companies face competition from both established players and new entrants. Increased competition could put downward pressure on fees and margins.
• The company relies on a team of experienced professionals to provide debenture trustee services. The loss of any key personnel could have a negative impact on the company's business. There is no such key personnel responsible for the same.
• The company is dependent on Debenture trustee fees for a substantial share of its revenue and profitability. Any reduction in Debenture trusteeship fees could have a material adverse effect.
• The Company is dependent on a small number of customers, sales from top 10 customers contribute 44.39%, 41.99%, and 34.38% for total revenue from operations for the year ended March 31, 2024, 2023 and 2022 respectively). Loss of any of these large customers may affect revenues and profitability.