Akshay Fiscal Services: Below Average

Score: Below Average

BL Research Bureau

CONSIDERING the company's insignificant margins and risks, the potential for capital appreciation is minimal.

On account of the company-specific factors and the basic nature of the business, investors will be better off ignoring this IPO.

Akshay Fiscal Services is making an initial public offer of 41,00,000 equity shares worth Rs 10 each and will raise the equity capital to Rs 4.10 crore. The company's authorised capital is Rs 11 crore (1.1 crore shares), of which Rs 4.3 crore has been issued prior to this IPO. The present issue will total 62.3 lakh shares, of which 21.3 will be reserved for the promoters. The net offer to the public will be 41 lakh shares, thereby leading to a 61.14 per cent stake for the promoters and a 38.81 per cent stake in favour of the public.

Akshay Fiscal Services was incorporated as a private limited company in March 1990 and, consequently, went public in 1996. In 1998, six companies -- Sajan Impex and Marketing Plc, Telstar Trexim Pvt ltd, Sawrnim Computers Pvt Ltd, Sajan Niryat Pvt Ltd, Karamjyoti Traders Private Ltd and Fistrow Sales Agency Pvt Ltd -- were merged into Akshay Fiscal Services Pvt Ltd.

The company mainly trades in shares, securities and debentures of joint-stock companies. It also provides short- and long-term loans and advances. Its financials reflect growth but, however, fail to reap substantial bottomline profits.

The company's total income for 1999-00 was Rs 3.55 crore, up from Rs 1.15 crore in 1998-99. However, expenditure also grew in tandem to Rs 3.49 crore, representing 98 per cent of total income. Operating profit margins average at 1.5 per cent, even after taking into account the fact that margins inherent in this industry are very low. This indicates that the company is unable to deploy its funds efficiently towards income generation. The IPO closes on October 3 and the lead manager to the issue is Ashika Credit Capital Ltd.