Long term: Monarch Networth Capital Ltd Share Price can surge 3x!
Monarch Networth Capital Limited is a provider of financial services in pure stock broking, primary market operations, mutual funds, insurance and financial planning. It is a strategic amalgamation of two financial service providers Monarch Group of Companies and Networth Stock Broking Ltd.
Positives and Negatives of Monarch Networth Capital Ltd shares:
Positives:
- Reducing Debts. Almost Zero Debt.
- Strong Cash holding.
- Strong Balance Sheet.
- Strong Return on Equity.
- Decent Price to Book.
Negatives:
Monarch Networth Capital Ltd share Price target
- NSE: MONARCH
- Share price: 315.
- Buy Range: 280-315.
- Medium Term Target (3-6 months): 500. SL 250.
- Long term Target (2-3 years): 1000.
We have added the stock to our Screener List as a part of Long term investment.
About Monarch Network Capital Ltd (Source: Screener Website):
Products & Services
The Co offers a wide range of products within BFSI such as Broking services in Equity, Commodity & Currency markets, Distribution of Initial Public Offer (IPO), FPO & QIP products, Distribution of Mutual Fund products, Bonds, FDs, and NPS, Distribution of Life Insurance & General Insurance Policies of various Insurance companies, Depositary (Demat) services, Investment Banking Services and Loan against securities (LAS) & margin funding.
Revenue Split FY22
Interest income: 25%
Brokerage: 64%
Others (Advisory services): ~11%
PAN-India Network
The Co has 71 branch offices and 376+ business associates across India with a presence in more than 221 cities and 20 states. It also has a Strong Institutional setup of more than 3 Banks, 15 DIIs, 18 FIIs & 2 Insurance companies.The Co has a Pan-India tie-up with Punjab National Bank for online trading solutions which is available in more than 2300 offices.
Noteworthy Transactions
Monarch Alternative Investment Fund (AIF) has successfully raised INR 252 crore in its second closed-ended cat-3 equity AIF fund. The Co. was the Sole Banker to Alembic Pharma’s Rs 750 cr Qualified Institutional Placement (QIP) and to Adani Green Energy’s offer for sale (OFS) of Rs 778 cr (two tranches). It also acted as the advisor to Adani Total Gas’ SAS transaction of Rs 5152 cr and to KEI Industries Rs 500 cr QIP. Additionally, it successfully closed the First Alternative Investment Fund (AIF) of Rs 70 cr, raised solely by the Co without engaging distributors.
Subsidiaries
The co has four subsidiaries Monarch Networth Finserve, Monarch Networth Investment Advisors, Monarch Networth Capital IFSC, and Monarch Networth Money Changers.
Legal Disputes
The company has taken suitable legal action for recovering deposits of Rs. 40 lacs for premises at Bangalore and 3 crores for premises at Nariman Point- Mumbai. It has also taken legal action for recovering debts of 2.4 crores for fraudulent transactions done by a client in the year FY09.
Other Income
The Co earned another income of 10 crores in FY22 (6% of total income). It was mainly on account of interest earned on fixed deposits and Net gain on fair value changes.
Promoter Shareholding
The promoters of the Co, Mr. Suresh P Jain, Ms. Kanta Jain & Mr. Raj Bhandari, have been classified as public shareholders w.e.f. 1st April 2021. As a result of this, promoter shareholding decreased by 6.25%.
Preferential Warrants
On 6th August, 2021, the company allotted 29,90,000 Preferential Warrants for an amount aggregating to Rs. 21 crores to non-promoter (public) category.
Future Plans
The co. plans to infuse Rs. 1000 crore over the next three years in the existing as well as new business.
