Nisus Finance Services IPO

1. About the company

• Nisus finance services and its subsidiary and associate companies operate primarily in two key areas: Transaction advisory services and Fund & Asset management. The company focuses predominantely on transaction advisory services. Following its success in this segment, it decided to expand into fund and asset management. The Company's subsidiaries and stepdown subsidiaries - Nisus BCD Advisors LLP, Nisus Finance and Investment managers LLP, Nisus Finance International Advisors IFSC LLP, and Nisus Finance Investment consultancy FZCO along with its associates, Dalmia Nisus Finance investment managers LLP, are engaed in real estate and Urban Infrastructure fund and Asset management. Another associate, Nisus Fincorp pvt ltd. is Non Banking Financial company Primarily engaged in financing activity.

2. Strengths

1. The company claims that the transaction advisory division collaborates closely with developers partners to develop solution that support the long term business objective of its advisory clients.

2. The fund and asset management segment uses a research oriented approach that leverages emerging market trends. This strategy has enabled Nisus finance services to establish and maintain relationship with asset owner, developer, operators, investor, funds both domestic and international limited partners, buyers, Financial institutions, Family offices, Intermediaries, consultants, industry associations, mass media and end user forums.

3. Nisus Finance services claims to have a strong asset portfolio in India that provides critical, real time, proprietary market data. This data enables the firm to quickly identify and capitalised on market conditions and trends. The extensive network of Nisus Finance Services also helps attract a larger customer base.

4. Nisus Finance Services also states that the company prioritizes investment opportunities that have a clear exit strategies. The firm actively manages assets to speed up project delivery and boost overall investment performance.

5. Committed to exemplary corporate governance standards, Nisus Finance Services claims to have formed strategic alliances with leading entities in legal, tax, accounting, auditing, rating, custody, trusteeship, banking and related services. These partnership are crucial for upholding high governance standards for the benefit of all stakeholders.

6. The company has seen a consistent increase in revenue from operations and profit after tax(PAT) over the past few years. Revenue from operations increased from Rs. 5.42 crore in FY21 to Rs. 7.24 crore in FY22 to Rs. 11.30 crore in FY23, while PAT increased from Rs. 0.71 crore in FY21 to Rs. 1.31 crore in FY22 to Rs. 3.02 crore in FY23.

3. Risks

1. The company , its promoters, directors, and subsidiaries are involved in certain legal proceedings. Any adverse judgement in any of these cases could be detrimental to the company's business prospects.

2. The company relies on a select group of key customers and investors for a substantial portion of its revenue through funds managed by its subsidiaries. The top 10 customers, excluding interest income on investments and short term capital gains, contributed 82.35%, 53.96%, 84.94%, and 78.96% to revenue from operations in the period ending January 31, 2024, and FY23, FY22, and FY21 respectively. Any exposure to liquidity risks because of such high dependency on a few clients can adversely affect the company's financials stability and business operations.

3. A significant portion of the company's fund investments is concentrated in the real estate sector. Any downturn in this sector could negatively affect the company's ability to recover the value of its collateral or fully recoup principal and interest in cases of default.

4. If the investments made by the funds under Nisus Finance Services advisory or management perform poorly, the company may face a decline in revenue and earnings, which could also impact its ability to raise capital for future funds.

5. Nisus Finance Services relies on the goodwill and reputation of the ''Nisus'' brand name. Any adverse changes in a group control or any factors that negatively impact the brand's reputation could harm the company's overall business performance and financial standing.

4. Financial position of company as on March 31, 2024

1. Net Profit - We can see there is significant change in the net profit of the company during the FY 23-24. In March 2023 profit is Rs. 3 crore and in March 2024 profit is Rs. 23 crore.

2. Borrowing - Borrowing is increased from Rs. 10 Crore to Rs 18 Crore between the March 2023 to March 2024. Due to this interest cost of the company might be increase and profit may reduce.

3. Fixed Assets - Fixed Assets of the company is having negligible value. Value of the assets is Rs. 63 Lakhs (in March 2023) and copany is continuously increasing its fixed assets year on year.

4. Investment - Nisus Financial Services major focus is increasing the investment. In March 2022 investment value is Rs. 15 crore. Which is increased to Rs. 23 crore in March 2024.

5. Cash from Operating Activity - Till March 2023 cash from operation activity is negative. But in March 2024 we can see significant change in Cash from operation activity i.e. Rs.11 crore in March 2024.

6. Cash from Investment Activity - Till March 2023 cash from investment activity is negative. But in March 2024 we can see significant change in Cash from investment activity i.e. Rs.2 crore in March 2024.

7. ROCE % - ROCE in increasing every year. In March 2021 - 17%, March 2022 - 17% and In March 2024 - 24%.