Akme Fintrade India Ltd IPO

Rajasthan-based company, Akme Fintrade India Ltd, is primarily engaged in semi-urban and rural-centric lending solutions in the states of Rajasthan, Gujarat, Madhya Pradesh and Maharashtra. It is preparing to launch its IPO and has filed its Draft Red Herring Prospectus with SEBI. It has proposed a fresh issue of 1.1 crore equity shares to fund for the purpose of augmenting its capital base. The issue does not contain any OFS component. 

Gretex Corporate Services Ltd. is the book-running lead manager of the Akme Fintrade India Ltd IPO. In this article, we have discussed the company, details of the IPO, strengths, risks and more.

About the Company

Akme Fintrade India Ltd, established in 1996 is a Rajasthan-based NBFC (non-banking finance company) registered with RBI. The company has been operational for over two decades of experience in the financial service sector, specifically lending in semi-urban and rural geographies in India. 

The NBFC focuses on semi-urban and rural areas to cater to the financial service requirements of the underserved sections of our society. It has built an advanced technology platform that gathers financial data from different sources to assess the creditworthiness of applicants. This data is then shared with different lenders allowing businesses to easily avail credit. 

It has multiple product portfolios such as vehicle finance-related products and business finance products to small business owners. It has a proven track record of serving the rural and semi-urban markets with significant growth potentials, operational efficiency and a high customer retention rate. 

IPO Details and Objectives

Akme Fintrade India Ltd IPO is entirely a fresh issue type, where it has proposed to make a fresh issue of 1,10,00,000 equity shares. It has already filed its preliminary papers with SEBI and they are pending SEBI’s approval. 

The proposed objectives of Akme Fintrade IPO are as follows:

• The company aims to expand its capital base with the proceeds from its fresh issue.
• It can meet all issue-related expenses such as fees of statutory auditor, registrar’s fees, underwriter’s commission, etc.
• Any other general corporate purpose

Also Read: IPO investment strategy

Company Financials 

Here is the financial summary of Akme Fintrade India Ltd for FY23, FY22 and FY21.

Particulars	For the Financial Year Ending (In Rs. lakhs Except EPS)
	March 31, 2023	March 31, 2022	March 31, 2021
Total Assets	39,050.02	37,401.35	45,539.81
Total Liabilities	18,571.91	23,716.91	32,513.45
Total Expenses	4,952.11	5,991.30	6,758.58
Total Revenue	6,956.82	6,750.21	8,679.38
Profit/Loss After Tax	1,580.27	412.07	1,630.50
EBITDA	4,827.99	4,328.43	6,790.53
EPS (Basic and Diluted)	5.85	1.68	6.68

Also Read: How Can You Analyse An IPO?

Strengths of the Company

It is important to know the strengths of Akme Fintrade India Ltd before making any significant investments. The notable strengths of this company are:

• Akme Fintrade India Ltd has a proven track record of successful business execution especially in the semi-urban and rural areas. It has a long history of customer retention, low-cost expansions in underserved areas and a high customer acquisition rate.
• It has a well-established presence in vehicle finance and small business lending with special loans for SMEs, MSMEs and other small businesses.
• The promoter of this company has long-standing industry experience. Moreover, its strong, experienced and dedicated senior management team enables it to capitalise on future growth opportunities.
• Akme Fintrade India has a core focus on catering to the requirements of low-income group segment customers. Its customer-friendly approach helps in understanding the customer requirements from a grassroots level.
• It has a robust underwriting process along with strong risk management policies. The risk management division is divided into teams, each of which is dedicated to mitigating a risk type such as operational risk, credit risk, market risk, etc.

Risks Involved

Here are some of the risk factors associated with Akme Fintrade India Ltd:

• Like the COVID-19 pandemic, any other pandemic in the future can also have an adverse effect on the operations, cash flows, business and overall profitability of this company.
• Its business may be adversely affected due to higher levels of NPA.
• Failure to comply with RBI’s norms and regulations may lead to the restriction of its regular activities and heavy penalties.
• The promoters and directors are parties to certain legal proceedings. Any adverse outcome against the promoters and directors will likely hurt the company’s reputation and revenue.

Also Read: Risk of investing in IPO

Summary

Aarsh Fincon Limited is one of the promising NBFCs focused on rural and semi-urban regions of the country. The company is preparing to go public and has already submitted its draft papers with SEBI and is waiting for approval with the objective of expanding its capital base.

Hopefully the above-discussed competitive strengths, risk factors, and financial summary will help you make an informed decision. Keep an eye on our website for more updates on Akme Fintrade India Ltd IPO.

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