Pune E-Stock Broking Limited IPO: Key Details, Business Model, Financials, Strengths, and Weaknesses

Are you considering venturing into the world of a stock that manages your portfolio but unsure where to begin? Look no further than PESB.

Today’s blog will uncover the critical IPO details, strengths and risks, and PESB’s financial statements.

Overview

Pune E-Stock Broking Limited (PESB) is a corporate broking house founded in 2007 and is headquartered in Pune, Maharashtra. The company offers several investment services, like broking, mutual funds, currency trading, depository services, and IPOs. The company was registered with SEBI as a stock broker in 2008 and expanded its business into the commodity segment by becoming a member of MCX in 2019.

With a network of over 150 authorised persons and a trading client base exceeding 50,000, PESB’s influence expanded in the post-Covid era.

PESB’s success is attributed to the leadership of its founding team, which includes Mr Vrajesh Krishnakumar Shah, Mr Devendra Ramchandra Ghodnadikar, Mr Sandip Sunderlal Shah, and Mr Paresh Sunderlal Shah.

Business Model

PESB offers the following services to its clients:

1. Client Broking

Clients can access real-time quotes, execute trades through the mobile app and website and stay informed with the latest market news and updates while enjoying customer service.

2. Depository Participant

PESB offers a seamless trading experience by integrating demat services through CDSL, where they are a registered depository participant. This allows clients to hold and manage their investments conveniently in one place. The company has over 23,155 active clients with depository services.

3. Mutual Funds

The company makes mutual fund investing convenient and comprehensive by offering a wide range of equity, debt, and hybrid funds from multiple AMCs. This variety helps investors create a diversified portfolio that aligns with their financial goals. Customers also receive regular portfolio updates and follow-ups.

4. Corporate Deposits

PESB offers corporate deposits as an alternative investment option to traditional bank fixed deposits. With fixed interest rates often exceeding those of traditional options, these deposits cater to individuals of diverse risk appetites while aligning with the practice of secure fixed-income investing.

5. Currency Trading

Customers can trade currency flexibly through multiple channels, and forex derivatives services offered by the company fulfil the various investment goals through hedging, speculation, and portfolio diversification.

PESB’s user-friendly Trading App further showcases its dedication to technological innovation. With the app’s help, clients can manage their investments, stay updated on market trends, and execute trades on the go.

Key IPO Details

• Objectives of the issue are to meet the working capital requirements for general corporate expenses and public issue expenses.
• Pre-Issue Shareholding of Promoters is 72.75%, and promoters collectively hold 80,34,858 equity shares of the company.

Financial Statements Analysis

Key Metrics 

Cash Flow Statement

Strengths

1. The company is led by a team of experienced professionals with deep knowledge of the core aspects of the business and holds long-term relations with customers.
2. PESB simplifies investing by offering a wide range of brokerage services under one roof and caters to diverse investor needs with equity and currency derivatives trading. The recent addition of Mutual Fund and Margin Trading Facility (MTF) in business operations is an icing on the cake.
3. The electronic brokerage platform enables the company to prioritize real-time risk management through its system that closely monitors the exposure by taking into consideration factors like client margins, exchange margins, and credit lines.

Weaknesses

1. The company’s restated summary information for FY 2023 shows negative cash and cash equivalents, and the company may likely experience similar negative cash flows in the future.
2. The company has previously faced regulatory actions from stock exchanges and SEBI. The possibility of similar future actions cannot be entirely ruled out, which could impact the company’s financial health, operations, and profitability.
3. The company’s directors, promoters, subsidiaries and group companies are involved in several legal proceedings at different stages. While the outcome of these proceedings is uncertain, any adverse judgements could affect the business operations.
4. PESB operations rely heavily on IT and are exposed to cyber security risks and any kind of failure or security breach could adversely affect the business.

Conclusion

PESB empowers you to navigate the financial landscape with confidence and offers a comprehensive suite of investment products and services, all designed to fulfil the unique financial goals and risk tolerance of the customers. However, it is necessary to conduct your research before making any investment decisions.

Frequently Asked Questions (FAQs)

1.   When was the company founded?

Ans. PESB was founded in 2007.

2. What is the price band of the PESB IPO?

Ans. The price band of the IPO is INR 78 to INR 83 per share.

3. When will the PESB IPO open?

Ans. The PESB IPO will open on March 7, 2024.

4.  What does the company do?

Ans. PESB is a stockbroking firm that offers equity, mutual fund, currency, commodities, and depository services.

5. Where can I find more information about the PESB IPO?

Ans. You can read the IPO prospectus on the website of BSE SME and other IPO managing brokerage firms.

Disclaimer: The securities, funds, and strategies mentioned in this blog are purely for informational purposes and are not recommendations.