Share Samadhan coming with IPO to raise Rs 24.06 crore

Share Samadhan

• Share Samadhan is coming out with an initial public offering (IPO) of 32,51,200 equity shares in a price band Rs 70-74 per equity share.  
• The issue will open on September 9, 2024 and will close on September 11, 2024.
• The shares will be listed on SME Platform of BSE.
• The face value of the share is Rs 10 and is priced 7.00 times of its face value on the lower side and 7.40 times on the higher side.
• Book running lead manager to the issue is Narnolia Financial Services.
• Compliance Officer for the issue is Kumar Rishi.  

Profile of the company

The company is a one-stop solution, providing a wide range of services aimed at helping clients efficiently to protect and retrieve their investments / money. These services include Investment retrieval through the company, Wealth Protection through Wealth Samadhan, and litigation funding solutions through Nyaya Mitra, thereby assistance in resolving various disputes regarding blocked investments in any asset class largely on a success fees model. The company is in the business of Investment retrieval services, offering consultation on matters concerning unlocking value and resolving investor grievances related to various financial assets such as equity shares, preference shares, mutual funds, debentures, bonds, insurance, provident funds, deposits, bank accounts, debts and other asset classes. Further, it also assists in retrieval of unclaimed and unpaid dividends, interests, as well as addressing issues like old, lost, forgotten or damaged financial instruments such as physical shares, old mutual fund papers, old insurance / PF papers etc. and facilitating transfer and transmission processes and other allied services. 

The company also offers wealth protection services through Wealth Samadhan Card. Wealth Samadhan Card is a comprehensive digital investment repository solution designed to safeguard and streamline the protection of investment information. This service offers clients a secure and straightforward way to record and store all their investment details in one place in an encrypted way. These services are offered through its subsidiary Wealth Samadhan. Further, the company offers a spectrum of litigation funding solutions tailored to address the multifaceted nature of legal disputes through its subsidiary, Nyaya Mitra. It offers services in supporting cases relating to disputed property matters, high stake commercial dispute, management & shareholder’s dispute, family dispute, debtor recovery, alternative dispute resolution, overseas recovery, arbitration cases etc. Its mission is to ensure that every litigant has the opportunity to pursue their legal rights to fair compensation, unencumbered by financial limitations. At Share Samadhan, its objective is twofold: to pioneer the industry in reclaiming unclaimed investments and all other asset classes, and to offer comprehensive solutions for safeguarding wealth. It aspires to empower investors globally to efficiently retrieve their assets through its services. To realize this objective, it is committed to continually refining its processes, expanding its outreach, and staying abreast of industry trends and advancements. 

Proceed is being used for:

• Meeting out the expenses for Investment in Technology.
• Meeting out the expenses for Unidentified Acquisition for Company (In India or Abroad).
• Meeting out the Working Capital requirements of the Company.
• Meeting out the General Corporate Purposes.
• Meeting out the Issue Expenses. 

Industry overview

Third-party Litigation Funding (TPLF) has emerged as an opportunity with very high growth potential. The global litigation funding market is expected to exceed $57.2 billion by 2035 (growing at a CAGR of 13.14%)1. As India's economy grows, it is expected that the number of civil litigations is likely to increase. In the initial stage, globally, single-case funding was popular, however, currently, portfolio arrangements, class action, breach of contract suits, insolvency cases, anti-trust proceedings and patent related suits are the most common type of litigation finance. In India, the focus currently is on breach of contract cases, commercial civil suits, arbitration, and insolvency proceedings. Litigation is an important tool to establish legal rights and resolve disputes. However, litigation is a complex, time consuming and costly process. Hence, not many can afford it. Often litigants who seek fair dispute resolution are unable to pursue their claims due to the high cost associated with lawsuits. Many plaintiffs who have a compelling case choose to delay or even abandon legal recourse, due to lack of strategy and subject matter expertise. A great imbalance of resources exists between average and wealthy litigants, creating impediments to judicial access and distortion of legal outcomes for the undercapitalized. 

Third party litigation funding is the provision of fund from a third party to enable claimant / counter claimants (people or corporation) to pursue litigation or alternate dispute resolution in exchange for a share of compensation awarded by a court or through other forms of settlement. This type of funding is mostly non-recourse, implying that if the litigation is unsuccessful and the claim is not recovered, the claimant is not responsible for repaying the legal costs incurred by the funder. As a result, the litigation funders bear higher risk in this type of funding. Litigation funding is typically divided into two main groups: consumer funding and commercial / investment funding. Consumer litigation funding arrangements generally involve a plaintiff seeking financial support from a funder for living or other expenses, usually related to tort or personal injury claims. Alternatively, investment or commercial litigation funding arrangements often involve large-scale tort and commercial cases and alternative dispute resolution proceedings. Compared to other funding options, litigation funding is relatively new area, and as more of people appreciate this option, it would be considered as a preferred way to channel fund that can provide justice to the individual and corporation.

Pros and strengths

The company has the first mover advantage in unclaimed investment recovery with a decade of leadership: The company’s management have been helping people find their lost investments for almost a decade. It was the first ones to start doing this kind of work on a focused professional front. Hence, it has the first mover advantage. Its team is experienced and knows all the ins and outs of finding lost money. It has helped thousands of people recover their forgotten/blocked/unclaimed investments. It has always come up with new ways to help its clients, and it always make sure they're happy with its service.

Proven success and a client-centric approach make it the trusted choice for recovery: A customer-centric approach is the company’s key strength in its business. By placing the needs and satisfaction of its clients at the forefront, it ensures that every aspect of its services is designed to meet their expectations and address their concerns effectively. Its focus on understanding the unique circumstances of each client enables it to provide tailored solutions that deliver tangible results. Through active listening and continuous feedback, it strives to build trust and foster long-term relationships with its clients, positioning it as their trusted partner in safeguarding and recovering their investments. This customer-centric approach not only enhances client satisfaction but also strengthens its reputation and competitiveness in the market. 

The company’s robust business associate network amplifies its reach for effective recovery:  The company’s strength lies in its well-established partnerships with major business associates. Over the years, it has cultivated strong relationships and network in the industry. Its extensive network of business associates significantly extends its reach, enhancing the effectiveness of its recovery efforts. Its network enables it to tap into diverse resources and expertise, ensuring comprehensive coverage and swift action in asset recovery processes. By leveraging the network, it amplifies its capabilities and maximize the success.

Risks and concerns

Depends on relationships with business associates: The success of the company’s business is largely dependent on its relationships with its business associates and networks. These individuals play a crucial role in the business process, and their network and skills are not readily replaceable. Therefore, the success of a completed project depends on the abilities and contributions of its business associates. It depends on external professionals for the effective execution of its business operations. Further, the loss of any of these key associates due to any reason, such as disputes, termination of agreement or any other unforeseen circumstances, can have a significant negative impact on a project or its operations. This could impact on the reputation of the business and its ability to attract and retain clients in the future. 

Major revenue directed towards payment of fees to legal professionals: A significant portion of the company’s revenue is directed towards the payment of fees to the legal professional for its litigation funding solutions and towards the marketing of its business and brand name. While this is essential for its successful business operations, it also poses a risk to its financial stability. Moreover, failure to effectively monetize these expenses could further exacerbate this risk, potentially leading to financial losses and hindering its ability to sustain growth in the industry.

Requires significant amount of working capital: The company’s business operations require a significant amount of working capital. In its business, working capital is often required to finance the salaries of employees, legal professionals, marketing and others. In the event it is unable to source the required amount of working capital, it might not be able to efficiently satisfy its customers in a timely manner or at all. Even if it is able to source the required amount of funds, it cannot assure that such funds would be sufficient to meet its cost estimates and that any increase in the expenses will not affect its business.

Outlook

Share Samadhan is India's biggest organization for the recovery of unclaimed investments, money, and assets. The company has a dedicated team of professionals & subject matter experts having niche experience in the area of unclaimed investments and other assets. It provides customized service to nagging problems of Lost / Forgotten / Blocked investments in various financial assets such as equity shares, preference shares, mutual funds, debentures, bonds, insurance, provident funds, deposits, bank accounts, debts and other asset classes. It is dedicated to simplifying the task of managing investment records and promoting financial security for families. It is also dedicated in providing litigation funding solutions through its subsidiary, Nyaya Mitra with a vision to bridge the significant gap to access justice, empowering individuals and businesses embroiled in legal disputes by providing essential litigation funding consulting services. On the concern side, the majority of the company’s revenue from operations is concentrated from professional services charges from consultancy services. Its high dependence on this revenue stream could be risky for its operations. Its inability of failure to source users could adversely affect its business.

The company is coming out with a maiden IPO of 32,51,200 equity shares of Rs 10 each. The issue has been offered in a price band of Rs 70-74 per equity share. The aggregate size of the offer is around Rs 22.76 crore to Rs 24.06 crore based on lower and upper price band respectively. On performance front, total Income for the year ended March 31, 2024, stood at Rs 99,612.57 thousand whereas in Financial Year 2022-23 it stood at Rs 27,613.81 thousand representing an increase of 260.73%. The restated profit after tax for the year ended March 31, 2024, stood at Rs 14,165.40 thousand whereas in Financial Year 2022-23 it stood at Rs 1,490.28 thousand representing an increase of 850.52%. Meanwhile, the company is proposing to expand its business operations in the international markets and metro cities. The company will conduct a thorough market analysis which will identify promising international markets, taking into account factors such as size, growth potential, and cultural nuances. Adapting its services to align with their industry and culture, establishing strategic partnerships, and executing localized marketing campaigns will contribute to enhancing the company’s appeal.