Veefin Solutions Limited IPO
Mumbai-Based Company Revolutionizes Digital Lending and Supply Chain Finance Solutions
In today’s fast-paced business landscape, managing cash flow and optimizing working capital are crucial for success. Recognizing this need, a Mumbai-based company has emerged as a leader in the field of digital lending and supply chain finance (SCF) technology solutions. With a unique offering designed with a user-led approach, data analytics, and expertise from experienced bankers, the company is transforming the way financial institutions operate in the digital era.
Supply chain finance, a financial tool aimed at enhancing cash flow and working capital management, lies at the core of the company’s product solutions. By offering unparalleled flexibility and prompt configuration, their SCF product and platform enable financial institutions to tailor loan products according to the unique requirements of their clients. This capability eliminates the reliance on third-party execution and empowers bankers to provide highly customized solutions promptly.
One of the key benefits of supply chain finance is its ability to improve relationships between buyers and suppliers. By allowing buyers to pay for goods and services upfront, it mitigates the risk of non-payment and enhances the overall efficiency of the supply chain. Moreover, supply chain finance can also reduce the cost of capital for both buyers and suppliers, leading to improved profitability and competitiveness for businesses.
The company recognizes the challenges faced by suppliers due to extended payment periods from their customers, often resulting in high-cost capital requirements. This cost burden can make the supply base financially unstable, increasing the risk of failure and hindering the development of resilient and sustainable supply chains. Supply chain finance plays a crucial role in alleviating these financial burdens by providing suppliers with much-needed liquidity, ultimately enhancing the efficiency and stability of the entire supply chain ecosystem.
Furthermore, supply chain finance is instrumental in fostering the growth of small and medium-sized enterprises (SMEs). These loans offer vital funding to bridge financial gaps, increase liquidity, and optimize working capital for SMEs. With the rise of digital SCF solutions, even micro, small, and medium-sized enterprises (MSMEs) at the end of global supply chains can access these innovative financing options. Leveraging existing relationships and data flows within the supply chain ecosystem, the company’s products enable financial institutions to deliver high-quality, low-risk financing options to their clients effectively.
In collaboration with financial institutions worldwide, this Mumbai-based company aims to deliver innovative and best-in-class digital lending and supply chain finance technology solutions. By combining cutting-edge technology, data analytics, and the expertise of experienced bankers, they provide a scalable platform that empowers financial institutions to stay ahead of the curve and drive business growth.
In conclusion, supply chain finance has become an indispensable tool for businesses seeking to manage cash flow, improve working capital, and foster growth. With its unique blend of digital lending and supply chain finance solutions, the Mumbai-based company is revolutionizing the way financial institutions operate, offering unmatched flexibility and customization. As businesses navigate the ever-evolving economic landscape, partnering with this company proves to be a strategic move towards staying competitive and achieving long-term success.
Objects of the Veefin Solutions Limited IPO:
Veefin Solutions Limited IPO Details:
|Open Date:||Jun 22 2023|
|Close Date:||Jun 26 2023|
|Face Value:||₹ 10 Per Equity Share|
|Issue Type:||Fixed Price Issue IPO|
|Issue Size:||46.73 Cr.|
|Lot Size:||1600 Shares|
|Issue Price:||₹ 82 Per Equity Share|
|Listing At:||BSE SME|
|Listing Date:||Jul 05 2023|
Promoters And Management:
Financials of Veefin Solutions Limited IPO:
|Particular (In Lakhs)||Mar-21||Mar-22||10MFY23|
|Equity Share Capital||1.04||1.24||1,833.79|
|Total NC Assets||855||1,448||3,513|
|Cash & Bank||2||2||321|
|Particular (In Lakhs)||Mar-21||Mar-22||Mar-23|
|Profit before tax||11||49||580|
|Particular (In Lakhs)||Mar-21||Mar-22||10MFY23|
|Cash From Operating Activity|
|Profit From Operation||41||74||489|
|Loans And Advances||-9||9||-6|
|Other WC Items||97||-42||-3|
|Working Capital Changes||83||-18||-682|
|Net Cash Inflow from Operating Activity||124||55||-201|
|Cash from Investing Activity|
|Fixed assets purchased||-857||-601||-2,081|
|Other investing items||172||-70||-102|
|Net cash inflow from investing activities||-686||-680||-2,185|
|Cash from Financing Activity|
|Proceeds from shares||1||0.2||0.3|
|Proceeds from borrowings||474||0||0|
|Repayment of borrowings||0||127||310|
|Intrest paid fin||-0.05||-2||-2|
|Other financing items||89||754||3,018|
|Net Cash Flow||2||-0.01||320|
Comparison With Peers:
Recommendation on Veefin Solutions Limited IPO:
2. Offers unique technology product solutions designed with a user-led approach, data and analytics, and built by experienced bankers for bankers.
3. Provides SCF product and platform that are highly flexible and configurable to meet specific client needs without relying on third-party execution.
4. Offers cutting-edge technology products with unmatched flexibility, enabling quick and efficient configuration and implementation.
5. Empowers bankers and financial institutions to offer highly customized loan products, both regular and transaction-based, based on clients' unique requirements.
6. Works with a wide range of clients globally, including Banks, Non-Banking Financial Institutions, FinTech, Marketplaces, and Corporates.
7. Helps clients digitize, automate, and scale across SME lending.
8. Acquired the product business undertaking of Infini Systems Private Limited to expand product offerings in digital lending and supply chain finance technology solutions. Acquired software products include Supply Chain Finance Software, Loan Origination System, Loan Management System, Collection Management System, Sales CRM, and Digital Tools for SME clients of banks.B) Pros 1. Extensive Experience: Mr. Raja Debnath, the Chairman and Managing Director of the company, brings a wealth of experience in the Digital Technology Services, Banking, and Consultancy fields. With 20 years of experience, he has a deep understanding of these industries and can provide valuable insights and guidance to the company. 2. Excellent Growth : The Revenue of the company was Rs.80 lakh in Fy21 and same has increased to ~13 Crores in Fy23. In the same period PAT has also increased from 14 Lakh to ~4 Crores. 3. Asset Light Model: The company functions as an intermediary, utilizing their technology to establish a connection between banks, institutions, and clients, resulting in minimal costs incurred solely for software expenses. C) Cons 1. The trade receivables as of January 2023 amount to 7.48 Crores, which appears significantly higher, particularly when considering that it constitutes a significant portion of the total revenue of 11 Crores generated during the first 10 months of FY23. Consequently, this has resulted in negative cash flow from operations. 2. Asking Price/Earning is 42x. Highly overvalued. 3. Out of 48 Cr company is raising, 50% is OFS. OFS in a SME is always negative.