Nisus Finance Services Co Limited, a leading player in the transaction advisory services sector, is gearing up for its initial public offering (IPO) on December 4, 2024. The company, alongside its subsidiaries, has made a name for itself in the realms of real estate and urban infrastructure fund management. With a price band of ₹170 to ₹180 per equity share, Nisus Finance aims to raise ₹114.23 Crores through this book-built issue.

The IPO consists of a fresh issue of 56.45 lakh shares valued at ₹101.62 Crores, and an offer for sale (OFS) of 7.00 lakh shares, amounting to ₹12.61 Crores. The subscription period will run from December 4 to December 6, 2024, with the allotment process set to be finalized by December 9, 2024. The shares will be listed on the BSE SME on or about December 11, 2024.

Subscription Details:

• Price Band: ₹170 to ₹180 per share
• Lot Size: 800 shares
• Retail Minimum Investment: ₹1,44,000
• HNI Minimum Investment: ₹2,88,000 for 1,600 shares
• Market Capitalization: ₹429.80 Crores at the upper price band of ₹180

BEELINE CAPITAL ADVISORS PRIVATE LIMITED serves as the book-running lead manager, with SKYLINE FINANCIAL SERVICES PRIVATE LIMITED acting as the registrar for the IPO. Spread X Securities Private Limited will be the market maker.

Grey Market Premium and Subscription Status:

As of now, the Grey Market Premium (GMP) for Nisus Finance Services Co IPO is reported to be ₹0, reflecting no immediate trading gains in the unorganized market. Investors are advised to be cautious as GMP can be volatile and speculative in nature. The IPO’s subscription status will begin updates on December 4, 2024, and will be available through real-time tracking.

Objectives of the IPO:

The fresh issue proceeds are set to be utilized for several key purposes:

1. ₹1,246.45 Lakhs for expanding fund setup and obtaining additional licenses in major international financial hubs like IFSC-Gift City, DIFC-Dubai, and FSC-Mauritius.
2. ₹3,590.58 Lakhs will be allocated to fund-raising costs, distribution, and placement fees for attracting third-party agents, both in India and abroad.
3. ₹2,500.00 Lakhs will be invested in Nisus Fincorp Private Limited, an RBI-registered NBFC, to enhance its capital base.
4. The remaining amount will be allocated for general corporate purposes.

Financial Overview:

Nisus Finance Services Co has reported notable growth over the past few fiscal years:

• For the quarter ending June 30, 2024, the company reported revenue from operations of ₹1,500.53 Lakhs, and a Profit After Tax (PAT) of ₹835.72 Lakhs.
• The company has shown a strong EBITDA growth, from ₹554.16 Lakhs in FY 2023 to ₹1,206.58 Lakhs in FY 2024.

IPO Valuation:

With the pre-issue EPS of ₹12.25 and post-issue EPS of ₹9.58, the IPO is priced at a pre-issue P/E ratio of 14.69x and a post-issue P/E ratio of 18.79x. These valuations are competitive compared to industry peers, suggesting that the IPO is reasonably priced, though the lack of a GMP increase may indicate a lukewarm market response.

The Upcoming IPOs in this week and coming weeks are Nisus Finance, Emerald Tyre Manufacturers, Rosmerta Digital and Avanse Financial.

The Current active IPO is Ganesh Infraworld and Suraksha Diagnostic.

Investor Sentiment:

Given the financial performance, high Return on Capital Employed (ROCE) of 101.63% and Return on Equity (RoE) of 109.83%, Nisus Finance Services Co’s IPO could be appealing for long-term investors. However, given the flat Grey Market Premium (GMP) and the limited market excitement, investors are advised to approach with caution, especially if seeking short-term listing gains.

Nisus Finance IPO Review:

The company's well-established position in the real estate and urban infrastructure finance sector, coupled with its solid financial track record, positions it as a good candidate for long-term investment. However, the lack of a significant GMP and a high post-issue P/E ratio may temper expectations for immediate listing gains. For those looking for a riskier investment with potential growth in the future, Nisus Finance Services Co IPO presents a viable option.

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