IGSL has four subsidiaries:

• Inventure Wealth Management: Net sales were Rs 35.07 lakh and loss Rs 10.08 lakh end of March 2011.

• Inventure Finance: Net sales were Rs 6.26 crore and PAT of Rs 0.19 crore end of March 2011.

• Inventure Commodities: Net sales were Rs 1.90 crore and PAT of Rs 0.66 crore end of March 2011.

• Inventure Insurance Broking (step-down subsidiary of IGSL and a subsidiary of Inventure Wealth management.): Net sales were Rs 2.88 lakh while PAT was Rs 1.63 lakh end March 2011.

The company operates through 233 business locations including branches, franchisees and sub- brokers located across 29 cities and towns

IGSL serves more than 35,877 clients (including institutional) in equity broking as of June 30, 2011.

The company is coming with an IPO to collect around Rs 81.9 crore at the upper band of Rs 117 per share and Rs 70 crore at the lower band of Rs 100 per share consisting of a fresh issue of 70-lakh equity shares. Post-issue, promoters' stake will fall to 48.02% from 72.02%.

The company intends to utilise the net proceeds for investments in one of its subsidiary Inventure Finance, amounting Rs 30 crore, augmenting long-term working capital requirement amounting Rs 20 crore and the balance for general corporate expenses and public issue expenses.

The company operates in a highly competitive market.

The company had negative cash flow from operating activities in FY 2011, FY 2009 and FY 2007.

The company's income and profit have been fluctuating and FY 2011 figures are substantially lower than those of FY 2008. Revenues declined 6% CAGR to Rs 31.16 crore in FY 2011 from Rs 38.03 crore in FY 2008 while PAT fell at a CAGR of Rs 28% to Rs 6.21 crore over the same period.

OPM of the company fell from 42.1% in FY 2008 to 24% in FY 2011.

The broking industry has two major problems: large number of players and lowering of contribution from high margin cash volumes compared with low margin F&O volumes. Lower entry barrier has made the industry highly competitive putting pressure on margins while rising F&O volumes has further deteriorated the margin.

At the offer price band of Rs 100-Rs 117, P/E works to 33.3 (on lower band) to 39 (on upper price band) times FY 2011 EPS of Rs 3 on post-issue equity of Rs 21 crore. The peer composite TTM P/E stands at 12.89. P/E of other comparable listed players is: Indiabulls Securities (8.3 times), Emkay shares (8.24 times), India Infoline Financial Services (11.86 times), IL&FS Investment Managers (9.32 times) and Geojit Financial Services (19.31 times). The issue is thus very aggressively priced.