Dar Credit and Capital Limited is a niche non-banking finance company focused on providing credit solutions to low-income individuals and small businesses. Particularly, it caters to class-four (Group D) employees such as cleaners, sweepers, and peons working in municipalities, alongside small-scale shopkeepers and vendors. A notable aspect of their lending approach is the emphasis on empowering women entrepreneurs, reflecting a social impact-driven business model.

IPO Details and Schedule

Dar Credit and Capital is launching its Book Built Issue IPO with a fresh issue of 42.76 lakh shares, aggregating to ₹ 25.66 crores. The IPO opens on May 21, 2025, and closes on May 23, 2025. Investors can expect the allotment results on or about May 26, 2025, with the shares tentatively set to list on the NSE SME platform by May 28, 2025.

The share price band is fixed between ₹ 57 and ₹ 60 per equity share. At the upper price band of ₹ 60, the company’s market capitalization stands at approximately ₹ 85.65 crores. The IPO lot size is 2,000 shares, requiring a minimum retail investment of ₹ 1,20,000. High Net Worth Individuals (HNIs) must subscribe for at least 2 lots (4,000 shares), amounting to ₹ 2,40,000.

Key Market Players

• Book Running Lead Manager: GYR Capital Advisors Private Limited

• Registrar: KFIN Technologies Limited

• Market Maker: SMC Global Securities Limited

Grey Market Premium (GMP) & Subscription Status

The Grey Market Premium for the IPO currently stands at around ₹ 5, suggesting an expected listing price of ₹ 65, roughly 8.33% higher than the IPO price. It is important to note that GMP does not guarantee actual listing gains as it reflects unregulated trading demand and supply.

As of May 22, 2025, 10:30 AM, the IPO is oversubscribed by 7.87 times, indicating strong investor interest on the second day of the subscription period.

Anchor Investor Participation

Dar Credit and Capital secured ₹ 7.29 crores from anchor investors who were allotted 12.16 lakh shares at the upper band price of ₹ 60 per share. These anchor shares come from the Qualified Institutional Buyers (QIBs) portion and indicate confidence from large institutional investors.

Business Overview and Management

The company is led by Mr. Ramesh Kumar Vijay, the promoter, chairman, and whole-time director. He brings nearly four decades of expertise in personal and MSME lending. Mr. Vijay holds degrees in commerce, chartered accountancy, and company secretaryship, showcasing strong professional credentials.

Dar Credit and Capital has steadily grown its revenues, with ₹ 31.03 crores in the 9 months ended Dec 2024, compared to ₹ 33.01 crores in FY2024 and ₹ 25.57 crores in FY2023. The company’s EBITDA and profit after tax (PAT) have also consistently increased, reflecting healthy operational performance.

Financial Metrics and Valuation

• Pre-issue Earnings Per Share (EPS): ₹ 3.97

• Post-issue EPS: ₹ 2.78

• Pre-issue Price-to-Earnings (P/E) Ratio: 15.11x

• Post-issue P/E Ratio: 21.59x

• Industry P/E Ratio: 6.00x

• Return on Capital Employed (ROCE) FY24: 9.22%

• Return on Equity (ROE) FY24: 6.17%

• Return on Net Worth (RoNW): 5.64%

These figures suggest that the IPO is priced at a premium compared to the industry, implying limited upside potential at current valuations.

IPO Objectives

The funds raised will primarily be used to:

1. Augment the company’s capital base with ₹ 22 crore.

2. Meet general corporate purposes.

3. Cover IPO-related expenses.

Analyst Recommendation

Given the company’s financial metrics and premium pricing reflected in the Grey Market Premium, investors are advised to avoid subscribing to this IPO for listing gains. The IPO appears fully priced with limited potential upside on listing day.

This detailed review provides investors with a comprehensive understanding of the Dar Credit and Capital IPO, including its business model focused on socially impactful lending, the subscription timeline, pricing, financials, and expert insights to make informed investment decisions.

The Upcoming IPOs in this week and coming weeks are Neptune Petrochemicals, Aegis Vopak Terminals, Schloss Bangalore, Astonea Labs, Nikita Papers, Prostarm Info Systems, Victory Electric Vehicles International, Blue Water Logistics, Wagons Learning.

The Current active IPO are Unified Data - Tech Solutions, Dar Credit and Capital, Belrise Industries, Borana Weaves.

Start your Stock Market Journey and Apply in IPO by Opening Free Demat Account in Choice Broking FinX.

Join our Trading with CA Abhay Telegram Channel for regular Stock Market Trading and Investment Calls by CA Abhay Varn - SEBI Registered Research Analyst.