INITIAL PUBLIC OFFERNING | IBL FINANCE LIMITED

The ‘IBL Finance Limited’ officially issued its Prospectus on 02nd January, 2024 mentioning the important details regarding its recent Initial Public Offering (hereinafter referred as IPO) which will start from Tuesday, 09th January, 2024 and closes on Thursday, 11th January, 2024. In this article we will look at some Important Financial Details of the company and the IPO, which investors need to consider before investing in a right company.

INITIAL PUBLIC OFFERNING | IBL FINANCE LIMITED

The ‘IBL Finance Limited’ officially issued its Prospectus on 02^nd January, 2024 mentioning the important details regarding its recent Initial Public Offering (hereinafter referred as IPO) which will start from Tuesday, 09^th January, 2024 and closes on Thursday, 11^th January, 2024. In this article we will look at some Important Financial Details of the company and the IPO, which investors need to consider before investing in a right company.

ABOUT THE COMPANY

As per the details of the company present on its official website, the company was incorporated in the year 1997 as a private company with the name ‘AMB Engineering Company Private Limited’ and further the name of the company was changed to ‘Jyoti CNC Automations Private Limited’ in the year 2002. Subsequently, in the September 2012 the company decided to go public and changed its name to ‘Jyoti CNC Automation Limited’.

BUSINESS OPERATIONS

The IBL Finance Limited is involved in the business of money-lending through online medium. It has been transitioned from a traditional money lender to a Fintech company with a focus on providing the personal loans through their own innovative app “IBL: Instant Personal Loan App”. The company offers a personal loan up to Rs. 50,000 with flexible repayment of up to 12 months, with an annual interest rate of 18%. The company majorly focuses on the digitally connected middle and lower- middle class population in India, offering various loan sizes and durations.

BOARD OF DIRECTOR AND PROMOTERS OF THE COMPANY

The company’s management includes the following members-

01.  Mr. Manish Patel as Managing Director of the company.

02.  Mr. Piyush Patel and Manuskhbhai Patel acting as Whole-time Directors of the company.

03.  Mr. Ajay Kumar Baldha acting as Non-Executive Director of the company.

04.  Mr. Bipin Hirpara and Mrs. Hitisha Chanchad acting as Non-Executive Independent Director of the company.

The Promoter Group of the company involves Mr. Manish Patel, Mr. Piyush Patel and Mr. Mansukhbhai Patel.

KEY FINANCIAL DETAILS OF THE COMPANY

In the fiscal year 2022-23, the Company has achieved a noteworthy revenue from its operations of Rs. 1330.52 (in Lakhs), and generated a revenue of Rs. 492.57 (in Lakhs), while securing a profit of Rs. 274.52 (in Lakhs). For the period ending 31 July, 2023 the company has earned a profit of Rs. 149.45 (in Lakhs).

To make a wise investment choice, we will delve into various financial ratios for a comprehensive assessment of the company's financial condition and performance.

DETAILS OF THE IPO

The company is offering Fresh Equity Shares worth Rs. 2500 Lakhs consisting of the 250 Lakh Fresh Equity Shares, out of which 1,81,80,650 Equity hares are already subscribed and the net issue available is 65,50,000 Equity Shares at a price of Rs. 51 per share.

Some Important details with respect to the Application Size for Qualified Institutional Bidder and Non-Institutional Investor has been Summarised in the following table:

OBJECTIVES OF THE IPO

The objective of the issue of the IPO is for (i) Meeting the working capital expenses; (ii) meeting the general corporate expenses of the company.

RISKS INVOLVED

In addition, the company faces severe risks in a variety of operational areas, which might have an influence on its financial stability, market positioning, and operational efficiency.

•      Legal Actions and Interest Rate Volatility: The corporation and its executives are facing legal action, and unfavourable rulings might have a big effect on how business is conducted. Interest rate changes have the potential to significantly impact the company's net interest margins and overall financial health.
•      Dependency on Net Interest Margins: Interest income from financing operations accounts for a sizeable amount of overall revenue, and the company's financial success is strongly reliant on net interest margins.
•        Interest Rate Risk: The firm is exposed to interest rate volatility when it lends money at fixed rates while borrows money at variable rates. This can have a significant impact on the company's financial performance.
•     Technology Infrastructure Risks: Relying on data centres and the cloud for storage increases the possibility of extended power outages or system failures, which might have an adverse effect on business operations.
•     Data Security Issues: Managing a sizable quantity of personal data raises the possibility of incorrect gathering, usage, or disclosure, which might be detrimental to the business's finances and reputation.
•     Capital and Funding Dependency: Timely access to a variety of funding sources is critical to the company's liquidity and sustained profitability. Financial situation might be negatively impacted by any financing interruption.
•     Customer Default Risks: There are inherent risks associated with lending operations, such as the possibility of high customer default rates because of different circumstances including insolvency, low liquidity, losing one's job, or operational failure, which might have an adverse effect on the financial stability of the business.

ANALYSIS AND RECOMMENDATION

Investors get the chance to learn more about a firm that has evolved from traditional lending to a fintech organisation powered by technology through the IPO of IBL Finance Limited. The firm targets digitally connected groups in India with its novel app, 'IBL: Instant Personal Loan App,' which focuses on personal loans.

The company's financial summary shows a favourable trajectory in recent fiscal years, with considerable sales growth and profitability. But the financial statistics, including the debt-to-equity ratio and return on equity, show erratic performance, necessitating a more thorough assessment of the firm's stability and operational effectiveness.

Although the IPO provides new equity shares and plans to use the money for working capital and other company needs, prospective investors should take the risks mentioned into account.

IMPORTANT DATES

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