Dharni Capital Services Limited IPO

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i. Dharni Capital offers diversified financial services such as Mutual Fund Distribution Services, Fixed Deposit Distribution Services, Real Estate Brokerage Services, Technical Consultancy and Outsourcing. The modus operandi is to counsel individual clients, understand their profile, needs and concerns, build customized financial investment portfolios, and offer a comprehensive selection of investment alternatives that will suit their financial goals.

ii. They offer a technology-enabled, comprehensive investment and financial services platform with end-to-end solutions critical for financial products distribution and presence across both online and offline channels. Dharni Capital is a growing Mutual Fund distributor in terms of commission and average asset under management (AAUM) with a CAGR of 109% and 86% respectively for the three-year period ending Fiscal 2022.

iii. As of 2022, their assets under management from the mutual fund distribution business (“AUM”) stood at ₹637million with around 80% of our total AUM being debt oriented. The AUM has increased from ₹ 204mn million as on March 31, 2019 to ₹ 637million as on March 31, 2022, at a CAGR of 46%

iv. The Company holds AMFI Registration number ARN-144504. Dharni Capital is an empaneled distributor with SBI Mutual Fund, HDFC Mutual Fund, ICICI Prudential Mutual Fund, Aditya Birla Sunlife Mutual Fund, Nippon Mutual Fund, Kotak Mutual Fund, UTI Mutual Fund, Axis Mutual Fund and many more.

v. They are also registered with Karnataka RERA Authority as an Agent. The company is registered as a Real Estate Broker with large players like Prestige Estate Projects and Embassy Group. The team has a combined experience of over 25 years in the Real estate business, with the team members having worked with organizations like Salarpuria Sattva Group, Prestige Estates and Sobha Limited in the past.

vi. Dharni Capital is also empaneled as a Fixed Deposit Broker with pioneers like Shriram Transport Finance Limited, HDFC Limited, ICICI Home Finance Limited and PNB Housing Finance
Limited. The company is one of the top distributors for Shriram Transport Finance company Limited in Karnataka since November 2020. The AUM of the Fixed Deposit Business has grown
from nothing in FY 2019 to over 100 Crores as on March 31, 2022.

 

 

Objects of the Dharni Capital Services Limited IPO:

The Issue comprises fresh Issue up to 55,00,000 Equity Shares. The Company proposes to utilize the Net Proceeds from the Issue towards funding the following objects: 1. Investment in Wholly-owned Subsidiary Company; and 2. General corporate purposes.
DRHP of Dharni Capital Services Limited IPO

Dharni Capital Services Limited IPO Details:

Open Date: Jan 18 2023
Close Date: Jan 20 2023
Total Shares: 5370000
Face Value: ₹ 1 Per Equity Share
Issue Type: Fixed Issue
Issue Size: 10.74 Cr.
Lot Size: 6000 Shares
Issue Price: ₹ 20 Per Equity Share
Listing At: BSE SME
Listing Date: Jan 30 2023

Promoters And Management:

(i) Hemant Dharnidharka as the Promoter of Dharni Capital, is heading the overall operations of the Group. He has been responsible for developing large strategic business endeavors for DHARNI Group and has been very successful with collaborating and creating relationships. Hemant is a Commerce Graduate from St. Xavier’s College, Kolkata and also is Postgraduate Diploma in Management from IIM-Lucknow. He has also completed Chartered Accountancy and Company Secretary Courses. He also possesses Certification from Association of Mutual Funds of India (AMFI) in Mutual Funds, NCFM Certification in Derivatives. He has an overall Experience of 22 years in the Finance Industry. He was last working as Managing Director with SJS Markets in Bangalore. He has previously worked with YL eServices, Frontline Analysts, Cadbury and Citibank. (ii) Preeti Saraogi is a promoter of Dharni Capital and wife of Mr. Hemant Dharnidharka. She has been involved with the Company’s activities since the inception of the Company. Preeti is a B.com Graduate and has done her Postgraduate Diploma in Human Resource Management in 2010. She handles HR and admin matters at the company. (iii) Maj Gen Jaideep Mittra retired from the Indian Army after nearly four Decades of service to the Nation. A product of the National Defence Academy and a graduate of the Defence Services Staff College. During his chequered career with the Army, he has held various prestigious Command, Staff, Instructional and Extra Regimental assignments. He has had numerous operational experiences in North East, J&K, IPKF (Sri Lanka) and in Kargil. He was also selected to represent the Country as part of the United Nations Military Observer Group (UNIIMOG) in Iran. Logistics, Supply Chain Management, Personality Evaluation and Public Relations are his core competencies. A Qualified Interviewer from DIPR (Defence Institute of Psychological Research) who held two tenures in Selection Centre which select potential officers into Indian Army. Post retirement he has interviewed Senior Management Level officers for MNCs.  

Financials of Dharni Capital Services Limited IPO:

Financial of Dharni Capital Services Limited SME IPO
Particulares ( In Lakhs ) 2022 2021 2020
Revenue From Operations 1,465 255 20
Other Income 4.12 0 0.09
Total Revenue 1469 255 20
Cost of Material Consumed 0 0 0
Employees Benefit Expenses 0.37 0 0
Other Expenses 1,335 234 15
EBITDA 134 21 4
Depreciation 5 2 3
EBIT 128 19 1
OPM (%) 9.14% 8.57% 22.90%
Finance Cost 0.01 0.01 0.02
PBT 128 19 1
PAT 96 15 1
NPM (%) 6.57% 5.97% 6.74%
No. of Shares 203 203 203
EPS 0.474 0.074 0.006

Comparison With Peers:

Name of the Company Revenue (In Crore) PAT (In Lakhs) EPS P/E CMP Mcap (in Crore) Profit (In Crore)
Dharni Capital Services Limited 14 96 3.66 42.19 20 2 0.96
IIFL Wealth Management Ltd 88 2,07,783 65.41 24.43 1598 16,331 2077
ICICI Securities Ltd 3434 3,43,848 42.86 10.31 442 16,223 3,438
Central Depository Services (India) Ltd 551 60,589 29.78 37.81 1126 11,180 605
Computer Age Management Services Ltd 243 92,694 58.73 39.38 2,313 11,246 926
HDFC Asset Management Company Ltd 2115 2,43,320 65.36 29.28 1,914 44,880 2,433
Nippon Life India Asset Management Ltd 1213 1,30,664 12 24.25 291 15,728 1,306
UTI Asset Management Company Ltd 1059 1,32,727 42.12 15.86 668 10,281 1327
Anand Rathi Wealth Ltd 417 41,748 30.49 21.32 650 3,270 417
Prudent Corporate Advisory Services Ltd. 450 32,799 13.94 35.80 499 4,328 327

Recommendation on Dharni Capital Services Limited IPO:

Reviews and Recommendation of Dharni Services SME IPO by IZ team is 2/10 1. Started in the year 2015, the company is in the business of Mutual Fund Distribution, Fixed Deposit Services, Real Estate Brokerage Services and Technical consultancy. So, overall their business model is commission based. 2. Total Mutual AUM is 63 Crores with 80% is debt oriented. 3. In real estate business they are registered as Real Estate Broker with Prestige Estate Projects and Embassy Group. 4. Technical and consulting Services comprise the third vertical. The corporation accepts client tasks and then subcontracts them to a variety of skilled persons and organisations. In 2019, this section provided zero income, but by 2022, it has contributed 12 Crores. This segment is contributing ~85% in total revenue in 2022. 5. The total revenue in 2022 is ~14 Crores and other expenses is ~13 Crores. Under other expenses, ~12.26 Crores is spent to pay to the third party “Professionals and Consultants” So, nothing is coming in the bottom-line of the company. 6. Nothing in the company to entice the investors.

Lead Manager of Dharni Capital Services Limited IPO:

  1. SRUJAN ALPHA CAPITAL ADVISORS LLP

Registrar of Dharni Capital Services Limited IPO:

  1. Cameo Corporate Services Limited

Company Address:

226, Brigade Metropolis Arcade, Whitefield Main Road, Garudachapal, Bangaluru 560 048, Karnataka;  

Discussion on Dharni Capital Services Limited IPO:

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