Safa Systems SME
Listing performance
Scheduled dates
Tentative timetable — a past date is not confirmation the step completed
Issue details
- Listing date
- 09 Feb 2022
- Face value
- ₹10 per share
- Issue price
- ₹10 per share
- Lot size
- 10,000 shares
- Total issue size
- ₹4 Cr
- Market cap at offer price
- ₹15.08 Cr
- Promoter holding
- 100.00% → 73.47% pre-issue → post-issue
- ISIN
- INE0JNA01014
- Registrar
- Cameo Corporate Services Ltd.
- Lead managers
- Finshore Management Services Ltd.
- Registered office
- 46/2631 B, Safa Arcade, Kaniyapilly Road, Chakkaraparambu, Kerala
Reservation and application size
How the issue is split between investor categories, and what each may bid
| Investor category | Shares | % of net | % of total |
|---|---|---|---|
| Market maker | 2,00,000 | — | — |
Application size
Minimum 10,000 shares per lot, in multiples, at ₹10
| Application | Lots | Shares | Amount |
|---|---|---|---|
| Retail (min) | 1 | 10,000 | ₹1,00,000 |
| Retail (max) | 2 | 20,000 | ₹2,00,000 |
| S-HNI (min) | 3 | 30,000 | ₹3,00,000 |
| S-HNI (max) | 10 | 1,00,000 | ₹10,00,000 |
| B-HNI (min) | 11 | 1,10,000 | ₹11,00,000 |
Category limits
| Category | Bid size | Cut-off |
|---|---|---|
| Retail (RII) | Up to ₹2 lakh | Yes |
| Small HNI (sNII) | ₹2 lakh – ₹10 lakh | No |
| Big HNI (bNII) | Above ₹10 lakh | No |
| Employee | Up to ₹5 lakh | Yes |
Bidding at cut-off means accepting the final issue price without naming one. Only retail and employee applicants may do so.
Valuation and performance
Valuation at offer price
| Metric | Pre-issue | Post-issue |
|---|---|---|
| Market cap | — | ₹15.08 Cr |
Key performance indicators
- Return on net worth
- 3.48%
- EBITDA margin
- 1.12%
Single period as reported. Year-on-year movement is in the financials table below, where every period is published.
About Safa Systems SME
Safa Systems & Technologies Limited was originally incorporated as a partnership firm named 'Safa Systems & Solutions' on October 18, 2012 in Kerala, and was converted into a Public Limited Company on September 21, 2021. The company operates as an ISO 9001:2015 certified distributor in the consumer durables sector, distributing products across multiple categories including mobile phones, mobile phone accessories, tablets, LED TVs, home appliances, and wearable devices. The company operates on a B2B (Business to Business) model, selling branded consumer durable products to various customers. The company derives a substantial portion of its revenue from operations based in Kerala.
Company Analysis
from RHPSafa Systems & Technologies Limited is a B2B distributor of consumer durable products including mobile phones, tablets, LED TVs, home appliances, and wearable devices from brands like Xiaomi, OPPO, TECNO, Micromax, and OnePlus.
Safa Systems & Technologies Limited was originally incorporated as a partnership firm named 'Safa Systems & Solutions' on October 18, 2012 in Kerala, and was converted into a Public Limited Company on September 21, 2021. The company operates as an ISO 9001:2015 certified distributor in the consumer durables sector, distributing products across multiple categories including mobile phones, mobile phone accessories, tablets, LED TVs, home appliances, and wearable devices. The company operates on a B2B (Business to Business) model, selling branded consumer durable products to various customers. The company derives a substantial portion of its revenue from operations based in Kerala.
Objects of the Issue
- To Meet working capital requirement ₹320.50 Lakhs p.17
- Public issue expenses ₹49.50 Lakhs p.17
- General corporate purpose ₹30.00 Lakhs p.17
- To meet the working capital requirements of the company ₹321.00 Lakhs (80.25% of total issue size) p.53
- General Corporate Purposes ₹30.00 Lakhs (7.50% of total issue size) p.53
- To meet the Issue Expenses ₹49.00 Lakhs (12.25% of total issue size) p.53
- Not specified in the document
Issue Structure
- Total Issue
- ₹400.00 Lakhs
- Fresh Issue
- ₹400.00 Lakhs (40,00,000 Equity Shares)
- Price Band
- ₹10/- per Equity Share at par
- Lot Size
- 10,000 Equity Shares
- Face Value
- ₹10/- each
Business Model
B2B distribution of consumer durable products from branded manufacturers. The company generates revenue through the distribution and sale of mobile phones, accessories, tablets, LED TVs, home appliances, and wearable devices of various brands.
Business Segments
SWOT Analysis
- • ISO 9001:2015 Quality Management certification(p.17)
- • Established brand partnerships with leading consumer electronics manufacturers(p.17)
- • Long-standing customer and supplier relationships built over a decade(p.23)
- • B2B business model providing stable revenue streams(p.17)
- • Established distributorship relationships with major brands(p.86)
- • Proven track record and years of operational experience(p.86)
- • ISO 9001:2015 Quality Management System certification(p.87)
- • Strong management team with industry experience(p.88)
- • Long-standing customer and supplier relationships(p.88)
- • Long-standing family business with 45+ years of experience(p.100)
- • Rapid revenue growth from partnership conversion to company(p.100)
- • Multi-brand distribution portfolio reducing dependency on single brand(p.100)
- • Established B2B distribution model in Kerala(p.100)
- • Professional management structure established(p.100)
- • ISO 9001:2015 certification obtained(p.100)
- • Established market maker arrangement for liquidity support(p.164)
- • 100% underwritten issue removing subscription risk(p.162)
- • Clear governance structure with detailed articles of association(p.186)
- • High dependence on a few major customers for revenue concentration(p.21)
- • Significant reliance on licensed brand agreements that may not be renewed(p.21)
- • Recent conversion from partnership to company with incomplete license/agreement transfers(p.21)
- • Non-compliance with PF Act and ESIC Act regulations(p.21)
- • High levels of outstanding receivables with 45-60 day average collection period(p.22)
- • Rented registered office with no long-term tenure guarantee(p.22)
- • Trademark applications rejected and intellectual property unprotected(p.22)
- • Significant unsecured loans from directors and promoters repayable on demand(p.24)
- • Negative cash flow from operating activities in recent years(p.24)
- • Large bank guarantee issued to single customer creates financial risk(p.21)
- • High financial leverage with total borrowings significantly exceeding equity(p.18)
- • Lack of qualified director and promoter documentation(p.23)
- • High working capital requirement relative to operations(p.89)
- • Limited pricing power due to fixed brand pricing(p.89)
- • Geographic concentration of operations in Kerala(p.91)
- • Dependency on a limited number of key brand partnerships(p.86)
- • Small organizational size with limited resources compared to competitors(p.88)
- • Heavy debt burden with debt-to-equity ratio of 3.46x pre-IPO(p.135)
- • Geographic concentration in Kerala state(p.100)
- • Very thin profit margins (0.19% PAT in current period)(p.141)
- • High financial charges consuming significant portion of profits(p.141)
- • Dependence on few major customers for significant revenue(p.140)
- • Company not registered under PF Act & ESIC Act with unascertainable impact(p.144)
- • Concentrated listing on SME platform with mandatory 2-year lock-in before main board migration(p.164)
- • Minimum 50 shareholders requirement with potential allotment failure(p.162)
- • Penalty liability for delays in refunds and allotment(p.162)
- • Expansion into growing Indian consumer durables market(p.17)
- • Rising disposable incomes driving consumer durables demand(p.17)
- • Geographic expansion beyond Kerala to other regions(p.23)
- • Adding new brand partnerships and distribution agreements(p.21)
- • Expansion into new geographic regions beyond Kerala(p.89)
- • Growing consumer durables market in India(p.89)
- • Expansion potential leveraging established brand equity(p.89)
- • Opportunity to add new brands and product categories(p.86)
- • Government incentives for organized retail and distribution(p.83)
- • Expansion beyond Kerala to other states(p.100)
- • Growth in consumer electronics and mobile phone market in India(p.100)
- • Expansion of product portfolio in home appliances and wearables(p.100)
- • Public listing on SME platform to raise growth capital(p.140)
- • Access to capital markets for growth and expansion(p.165)
- • Potential migration pathway to BSE Main Board(p.164)
- • Flexibility to raise capital through future issues with shareholder approval(p.186)
- • Intense competition from organized and unorganized market players(p.23)
- • COVID-19 pandemic impact on business operations and demand(p.23)
- • Changes in government regulations and tax policies(p.28)
- • Exposure to capital gains taxation on equity share sales(p.28)
- • Goods and Service Tax and custom duties impacting product costs(p.28)
- • Political instability and changes in economic liberalization policies(p.28)
- • Foreign investment restrictions limiting investor base(p.29)
- • Infrastructure limitations in India affecting supply chain(p.29)
- • Natural calamities and disasters impacting business continuity(p.29)
- • Terrorist attacks and civil unrest affecting market sentiment(p.29)
- • Rising e-commerce competition disrupting traditional distribution(p.89)
- • Intense competition from organized and unorganized players(p.89)
- • Low barriers to entry enabling new competition(p.89)
- • Rising input costs and labor wages(p.89)
- • Dependence on brand distributor agreements which can be terminated(p.88)
- • COVID-19 pandemic severely impacted business in FY 2020-21(p.100)
- • Brand dependency risk - previous adverse impact from Micromax issues(p.100)
- • High competition in mobile phone and electronics distribution sector(p.140)
- • Rapidly changing technology and market dynamics(p.140)
- • General economic and business conditions uncertainty(p.140)
- • Regulatory and legal changes in sectors of operation(p.140)
- • Bank guarantee liability of Rs. 750 crores to Xiaomi(p.144)
- • Regulatory dependency on BSE SME platform approval for listing and trading(p.156)
- • Exchange and regulatory authority discretion over listing continuance(p.155)
- • Exposure to market liquidity and secondary market trading risks on SME platform(p.164)
Promoters
| Name | Role | Pre-Issue | Post-Issue |
|---|---|---|---|
| Mr. Faizal Bavaraparambil Abdul Khader | Promoter | 26.03% | 19.13% |
| Mr. Bavaraparambil Abdhulkadher Hydrose | Promoter | 10.66% | 7.83% |
| Faizal Bavaraparambil Abdul Khader | Promoter | 28.84 lakhs shares (26.05% of pre-issue) | — |
| Bavaraparambil Abdhulkadher Hydrose | Promoter | 11.8125 lakhs shares (10.68% of pre-issue) | — |
| Sruthi Muhammed Ali | Promoter Group | 15.5045 lakhs shares (14.00% of pre-issue) | — |
| Arakkal Ayyoob Soumya | Promoter Group | 11.8125 lakhs shares (10.68% of pre-issue) | — |
| Pathukunju Parayankudy Abubacker | Promoter Group | 11.8125 lakhs shares (10.68% of pre-issue) | — |
| Bavaraparambil Ayyoob Abdul Khader | Promoter Group | 11.8125 lakhs shares (10.68% of pre-issue) | — |
| Anaz Abdul Khader Bavaraparambil | Promoter Group | 11.8125 lakhs shares (10.68% of pre-issue) | — |
| Safa Plywoods Pvt. Ltd. | Promoter Group | 7.3685 lakhs shares (6.66% of pre-issue) | — |
| Faizal Bavaraparambil Abdul Khader | Promoter | 26.03% | 19.13% |
| Bavaraparambil Abdhulkadher Hydrose | Promoter | 10.66% | 7.83% |
| Sruthi Muhammed Ali | Promoter Group | 14.00% | 10.28% |
Leadership
Auto-extracted from the company's RHP using AI, with each fact linked to its source passage (hover any row to see the quote & page). Provided for research only, not investment advice — verify against the official RHP before relying on it.