Dar Credit and Capital Limited is a financial services company focusing on extending credit solutions to low-income individuals, especially those employed in class-four (Group D) roles such as cleaners, sweepers, and peons working in municipalities. The company also serves small-scale shopkeepers and vendors, with a special emphasis on empowering women entrepreneurs through accessible credit offerings.

The company has filed for an IPO amounting to ₹ 25.66 Crores, consisting entirely of a fresh issue of 42.76 Lakh shares. The IPO subscription opens on May 21, 2025, and closes on May 23, 2025. The shares will be listed on the NSE SME platform, with an expected allotment date on May 26, 2025, and a tentative listing date on or around May 28, 2025.

The price band for the IPO is ₹ 57 to ₹ 60 per equity share, and the company’s market capitalization at the upper band price of ₹ 60 will be ₹ 85.65 Crores. The lot size for the IPO is 2,000 shares, meaning retail investors need a minimum investment of ₹ 1,20,000, while High-Net-Worth Individuals (HNIs) must invest in at least 2 lots (4,000 shares) totaling ₹ 2,40,000.

The book running lead manager for the IPO is GYR Capital Advisors Private Limited, and KFIN Technologies Limited is the registrar. SMC Global Securities Limited acts as the market maker, helping maintain liquidity on the NSE SME post-listing.

Regarding the Grey Market Premium (GMP), it currently stands at ₹ 5, suggesting expected listing gains of around 8.33%. However, it is important to note that GMP is unofficial, unregulated, and depends on informal demand and supply, so it should only be considered informational.

Dar Credit and Capital has raised ₹ 7.29 Crores from Anchor Investors at ₹ 60 per share. Anchor allocations were part of the Qualified Institutional Buyers (QIB) category and do not impact the retail investor portion directly.

The company is led by Mr. Ramesh Kumar Vijay, the Promoter, Chairman, and Whole-Time Director. He holds a Bachelor’s Degree in Commerce, is a Chartered Accountant and Company Secretary, and has over 39 years of experience in personal and MSME loan businesses. Mr. Vijay is recognized for his expertise in unsecured personal loans and secured MSME financing.

Financial Performance:

• Revenues from operations have grown steadily from ₹ 24.42 Crores in FY22 to ₹ 33.01 Crores in FY24.

• EBITDA has improved from ₹ 16.03 Crores in FY22 to ₹ 22.03 Crores in FY24.

• Profit after tax grew from ₹ 2.50 Crores in FY22 to ₹ 4.91 Crores in FY24, reflecting consistent profitability.

Key financial ratios for FY24 indicate:

• Pre-issue EPS: ₹ 3.97, Post-issue EPS: ₹ 2.78

• Pre-issue P/E: 15.11x, Post-issue P/E: 21.59x (Industry P/E: 6.00x)

• Return on Capital Employed (ROCE): 9.22%

• Return on Equity (ROE): 6.17%

• Return on Net Worth (RoNW): 5.64%

These figures show the IPO is fully priced compared to the industry, with relatively moderate returns and higher valuation multiples, signaling limited upside on listing gains.

Investment Recommendation:
While the company has a focused niche and steady financial growth, the post-issue valuations and high P/E ratios suggest limited scope for listing gains. The GMP indicates some premium but is not a reliable indicator of listing performance. Hence, investors seeking listing gains may consider avoiding this IPO.

The Upcoming IPOs in this week and coming weeks are Blue Water Logistics, Unified Data - Tech Solutions, Victory Electric Vehicles International, Borana Weaves, Dar Credit and Capital, Belrise Industries, Wagons Learning.

The Closed IPOs are Accretion Pharmaceuticals, Integrity Infrabuild Developers.

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