Rikhav Securities Limited, a SEBI registered stock broker, is set to raise ₹ 88.82 Crores through its Book Built Issue. The Fresh Issue comprises 83.28 lakh shares worth ₹ 71.62 crores, while the Offer for Sale (OFS) includes 20.00 lakh shares worth ₹ 17.20 crores. With the IPO subscription period running from January 15 to January 17, 2025, Rikhav Securities is poised to offer retail investors a chance to participate in its equity offering. The price band has been set between ₹ 82 and ₹ 86 per share. This will bring the market capitalization of Rikhav Securities to ₹ 329.31 crores at the upper price band.

IPO Subscription Status

As of January 16, 2025, the Rikhav Securities IPO has been subscribed 12.95 times on its second day, reflecting strong investor interest in the equity broking and trading space. The subscription trend indicates a positive outlook for the IPO and is expected to increase further as we near the closing date of January 17, 2025. The allotment process is expected to be finalized by January 20, 2025, with the listing happening on January 22, 2025, on the BSE SME platform.

Grey Market Premium (GMP)

The Grey Market Premium (GMP) for Rikhav Securities is reported to be ₹ 52, indicating a 60.46% potential listing gain from the upper price band of ₹ 86. However, it is crucial to note that GMP is unregulated and subject to fluctuations, so investors should not make decisions solely based on this premium. The GMP is mainly used as an indicator of market sentiment towards the IPO, but the real price discovery happens only after the official listing on the exchange.

Financial Performance Highlights

Rikhav Securities has demonstrated strong growth, with the revenues for the period ending September 30, 2024, standing at ₹ 9,615.83 lakh. This represents a consistent rise in earnings from ₹ 5,452.43 lakh in 2022. The EBITDA for FY2024 was ₹ 6,601.79 lakh, while the Profit after Tax (PAT) stood at ₹ 5,037.32 lakh. With a pre-issue EPS of ₹ 14.23 and a post-issue EPS of ₹ 11.14, the company is in a strong financial position, with a P/E ratio of 6.04x, well below the industry average of 20x. These figures suggest that the IPO is reasonably priced.

Objectives of the IPO

The net proceeds from the Rikhav Securities IPO will be used for the following purposes:

1. Funding incremental working capital requirements: ₹ 4,600 lakh.
2. Capital expenditure for IT infrastructure (computers and laptops): ₹ 412.81 lakh.
3. General corporate purposes, including business expansion.

Rikhav Securities IPO Allotment Process

The Rikhav Securities IPO allotment will be finalized on January 20, 2025. Investors can check their allotment status by visiting the registrar's website. To do so, they need to select Rikhav Securities IPO from the dropdown, enter their application number, PAN, or DP Client ID, and submit the details. It is essential to stay updated on the allotment and listing status for further actions.

Anchor Investor Participation

Rikhav Securities has raised ₹ 25.11 crores from Anchor Investors, with 29,20,000 equity shares allotted at ₹ 86 per share. This represents strong confidence from institutional investors in the Rikhav Securities IPO, as anchor investors are usually allotted shares at the higher end of the price band.

Market Maker and Lead Manager Details

SMART Horizon Capital Advisors Private Limited is the Book Running Lead Manager for the Rikhav Securities IPO, while Link Intime India Private Limited serves as the registrar. The Market Maker for this IPO is Shreni Shares Limited, which is responsible for providing liquidity post-listing.

Conclusion

Given the strong financial performance, attractive valuation, and positive subscription trends, Rikhav Securities is a promising option for investors looking for listing gains. The IPO is priced at a reasonable valuation with a P/E ratio of 6.04x, indicating that it could offer potential upside, especially if the Grey Market Premium holds steady. Investors should consider their investment objectives and risk tolerance before participating.

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