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| Edited By: Nitin Shrivastava |Source: DNA |Updated: Mar 18, 2018, 02:39 AM IST
BAMPSL Securities has a valuation any Indian promoter would be proud of, with market capitalisation-to-sales ratio at 590.
For a company that does not clock sales of even Rs1 crore, these
are phenomenal valuations.
The beauty is that the company is now coming out with a rights issue of two shares for every one held at Re 1 per share.
The company claims to be in the business of dealing in shares and securities, short- and long-term financial accommodation, realty business, spot financing and other similar financial activity. Through these activities, the company generates an income of Rs11 lakh and the remaining income of Rs35 lakh comes from interest income.
Salaries for its employees are around Rs5 lakh per annum, or `40,000 per month —- the staff strength is anyone’s guess.
The company has a gross block worth Rs47 lakh on its book.
Based on these numbers, the company plans to expand its business of trading for which it intends to come out with a rights issue to raise Rs0.59 crore. Of this, Rs16 crore will be used in investment activity with Rs2 crore to be used for investing in government securities, Rs8 crore for investing in mutual funds and `6 crore for investing in securities. To carry out these activities the company needs to buy an office space and related infrastructure, which will cost Rs4.25 crore.
BAMPSL was incorporated in 1995 and came out with a public issue in 1996. For a finance company that has seen some of the biggest bull and bear runs in the history of Indian share market, it is barely surviving, while newer players have come up and created financial empires.
The company doesn’t have much of a past history, which can give confidence of a group that can build a business. The promoter is a sub-broker with Adroit Financial Services. Further, the rights issue is not being used to create business, but for trading in shares and other securities. In other words, the promoter needs shareholders’ money to feed his trading appetite. With the promoter group holding at only 7.3%, could one expect more?
