High Yield | ICRA A/Stable Rated | Minimum Investment: 10k Only

Bond overview 

SMC Global Securities  Limited is issuing the Non-Convertible Debentures. These NCDs are A/Stable rated by ICRA. The NCDs are being issued in five series: coupon ranges from 10% to 10.50% p.a. and different tenures of 24 months, 36 months and 60 months. The NCDs are secured and redeemable in nature. 

Coupon rates and effective yield for each of the series 

Allocation Ratio

The allocation ratio is prepared based on norms laid down by SEBI. Before announcing the allocation ratio, the same has to be approved by SEBI.  Once the IPO subscription closes, applications will be divided into different categories. The category-wise allocation ratio is always decided and declared during the launch of the particular IPO. Considering the Allocation Ratio, units will be assigned to applicants. Refer to the chart to know the application ratio for SMC Global Securities Limited NCD-IPO. 

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Financial Overview

Snapshot stating the Revenue, Expenses, PAT (In crores)

Cash flow for last 5 years (In crores)

Cash flow refers to the movement of cash in and out of the business at a specific point in time. It represents the net balance of the cash movement.

• • *Cash flow from operating activities reflects the amount a company generates through its product of services.
  • **Cash flow from investing activities reflects cash generated and spent relating to investing activities, like purchase of assets, sales of securities etc.
  • ***Cash flow from financing activities gives an insight into the financial stability of a company to its investors. It reflects the net flows of cash that are used to fund the company.

Ratio Analysis

Issue analysis

Pros 

• The ratings of the company is  CRISIL A/Stable ensuring more safe investments.
• The yield offered is up to 10.50% which is much higher than many traditional fixed-income investments like FDs.
• The company has adequate Interest Coverage Ratio in order to meet its interest Obligations on debt instruments.
• SMC Global maintains adequate capitalization with plans to reduce gearing below 6.0 times, ensuring controlled growth and improved financial stability.

Cons 

• The company is prone to regulatory risk associated with SEBI and other regulators as well.
• Despite recent improvements, SMC Global Securities profitability remains subdued with increasing operating costs.

Liquidity

• Standalone Liquidity:
  
  • Cash & bank balance: ₹85 Cr
    
  • Short-term loan assets: ₹224 Cr
    
  • Undrawn bank lines: ₹150 Cr
• NBFC (MFSPL) Liquidity:
  
  • On-balance liquidity: ₹17 Cr
    
  • Repayments (H2 FY25): ₹226 Cr vs. inflows of ₹211 Cr
    
  • Positive ALM across short-term buckets

To get better returns than Bank FDs, invest in NCD-IPOs online. 

About SMC Global Securities Limited 

Established in 1994, SMC Global Securities is a diversified financial services powerhouse offering a wide array of services including brokerage, portfolio management, investment banking, wealth management, and insurance broking. With a robust presence across 437 cities in India and an international branch in Dubai, SMC serves its clients through a vast network of 188 branches and 2,327 authorized personnel. The shares of the company are traded on both BSE and NSE having a market cap of more than 1500 crores.

SMC is a member of major intermediaries of the stock market like NSDL, CDSL, BSE, NSE, MCX,ICCL, NCCL  and NCDEX. They have also  started their operations in IFSC GIFT City in Gujarat recently. For the Financial Year 2023-24 they had reported a volume of more than 8,000 Crore on the Equity Cash market segment on their Platform. Mr Subhash Aggarwal has been serving as the Managing Director and Chairman of the company since 1994.

Strengths

• Established Track Record:
  Over 3 decades in capital market & allied businesses, with presence in 198 branches and 2,297 franchisees as of Sep 2024.
  
• Diversified Revenue Streams:
  Business spans equity broking, wealth management, insurance broking, financial product distribution, NBFC lending, MTF, and proprietary trading.
• Strong Client Base:
  NSE active client base of 2 lakh, plus discount broking (Stoxkart) with 16,200 clients.
• Robust Profitability:
  • FY24 PAT: ₹188 Cr | RoNW: 18.6%
  • H1 FY25 PAT: ₹98 Cr | RoNW: 17.3%
• Healthy Capitalisation:
  • Net Worth: ₹1,182 Cr (Sep 2024)
  • Consolidated gearing: 1.3x
• Risk Controls in Proprietary Trading:
  • No trading loss reported in past 41 quarters, with all trades fully hedged.
• NBFC Subsidiary (MFSPL):
  • RoA: 4.5% (FY24), 3.6% (H1 FY25)
  • CRAR: 37%, Gearing: 1.8x (Sep 2024)

Weakness

• Exposure to Capital Market Cyclicality:
  ~55% of Net Operating Income is from market-linked businesses, sensitive to volatility and regulatory changes.
  
• High Competition & Margin Pressure:
  Intense pricing pressure due to discount broking models and new entrants.
• Regulatory Risks:
  Frequent changes by SEBI (like new F&O rules) could impact volumes and profitability.
• Capital Market Lending Risk:
  T+5 exposure at ₹661 Cr and MTF book at ₹224 Cr (Sep 2024) – subject to collateral value fluctuations.
• SME Lending Risk via NBFC Arm:
  • ~40% of AUM unsecured
  • 60+ DPD rose to 3.0% (Sep 2024) from 2.2% (Mar 2024)

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Source- Prospectus March 19, 2025

Disclaimer- The information is published as on date 04/02/2025 based on information available on Prospectus March 19, 2025. The information may be subject to change in case of change in terms of prospectus or any other reason as the case may be. Contents which are exclusively for educational information/knowledge sharing on capital market concepts and has no influence the investment/sale decisions of any investors

About GoldenPi Expert

With over 15 years of experience across fixed income and debt markets, he brings deep domain expertise along with a strong focus on investor education and transparency. An alumnus of IIT Kharagpur and IIM Calcutta, his views are personal and should not be considered investment advice.

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