The Calcutta-based Baid Mercantiles' case is no different. The risk factors are numerous including non-registration with the RBI as an NBFC. And the company doesn't have any strength and can't see any opportunities in this highly competitive field of business. Even the SWOT (strength, weakness, opportunity and threat) analysis done by the company spells out the weaknesses and the threats only.

The company's Rs 2.50 crore maiden public offering is primarily aimed atenhancing the company's capital base to expand its current operations. It also intends to acquire some infrastructure at a cost of Rs 70 lakh.The company's expansion plans, self-appraised and pegged at a cost of Rs 4.78 crore is being financed through the current equity issue (Rs 3.78 crore, including promoter contribution), security deposit against lease finance (Rs 15 lakh) and loan against securities (Rs 85 lakh).

During the first six months of the current fiscal Baid Mercantiles earned a net profit of Rs 41,000 from a total income of Rs 1.25 lakh. A net profit margin of more than 30 per cent. During the whole fiscal 1998, however, the company had earned a net profit of Rs 64,000 from a total income of Rs 22.84 lakh. The shares of the company are proposed to be listed on the Calcutta Stock Exchange only. The issue, which opens on March 1, is being lead managed by Financial & Management Services Ltd.