Indian Base Metals was incorporated in 1971 to manufacture lead, lead alloys and other sheet metals. However, with mounting labour problems, rising input costs and stiff competition, the manufacturing facility in Calcutta was subsequently sold in 1991.

Thereafter, the company engaged itself in trading of shares and securities. In 1996, it included the present business in its Memorandum of Association.to consolidate its capital base and augment long term resources with the objective of diversifying into bill discounting and ICD market, IBMC is coming out with its maiden public offering of Rs 2 crore.

Though present in the highly competitive financial services sector, the company operates on a small scale. The past financial performance has been marked by low profits.

In fiscal 1996, on a total income of Rs 1.27 lakh, its PAT stood at Rs 30,000. For the same year, its EPS stood at a paltry 57 paise. In the ensuing fiscal, on a total income of Rs 1.92 lakh, its PAT was Rs 71,000. The EPS figure was the fiscal was 65 paise. Although there was a marginal increase in EPS, the book value declined over the same period from Rs 28.08 to Rs 15.19.

Despite reporting PAT for fiscals 1996 and 1997, it incurred losses in its capital market operations during these two years. IBMC doesn't have any past record of dividend payment. Financial results of its other group companies are no better. While one reported a profit of Rs 1.02 lakh for fiscal 1996, the other's PAT for fiscal 1997 stood at Rs 1.27 lakh. The shares of Purbasha Resources, a group company, though listed on CSE are thinly traded and currently priced below par. One of its promoter companies, Sanyukt Builders, is yet to commence business. Another promoter company, Raag Builders, incorporated as a construction company, currently deals in shares and securities. For fiscal 1996, it reported a PAT of Rs 25,000 from a total income of Rs 5.37 lakh. Post-issue promoters' stake would be 33.3 per cent.

Copyright © 1997 Indian Express Newspapers (Bombay) Ltd.