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• This is the 2nd RI from the company since March 2023.
• The company is engaged in the manufacturing/trading and marketing plastic moulded components under the brand name "Ridh".
• It has posted dismal performance for the last two fiscals, incurred loss for FY24.
• More than doubled equity post-RI may witness servicing issue.
• There is no harm in skipping this at par issue as it's a "High Risk/Low Return" bet.
PREFACE:
The company is coming out with its 2nd RI since March 2023. The first RI was at a price of Rs. 19 per share to mobilize Rs. 42.91 cr., and now at a par value to mobilize Rs. 21.17 cr. Post last RI, it fared poorly and destroyed investors wealth. This time though it's at par value, it's a "High Risk/Low Return" bet.
ABOUT COMPANY:
A F Enterprises Ltd. (AFEL) is engaged in the Trading and production/Manufacturing product range encompassing plastic molded components under the brand name "RIDH". The brand "RIDH" is the Trademark showcasing the entire Product range. The Company is engaged in manufacturing and distribution of Plastic Moulded Component. Injection moulding is a formative manufacturing technology, i.e. material is formed from an amorphous shape into a fixed shape defined by a mould tool. Almost every plastic part created today is by injection moulding as it allows identical parts to be created in huge numbers, in a short space of time, and at very low cost per part.
The Company has one subsidiary named Aunik IT Solutions Private Limited having its registered office at 9A/11, Ground Floor, East Patel Nagar, Patel Nagar East, Central Delhi, New Delhi, Delhi, India, 110008. The Company is engaged into data solutions with scanning and provide search of any documents with the use of Artificial intelligence and to provide optimized e-commerce solutions via web, mobile and other state of the art technology platforms to customers in India and abroad. The offer document is silent on its human resources data.
ISSUE DETAILS:
The company is coming out with its second Rights Issue (RI) of 21170454 equity shares of Rs. 10 each at par value to mobilize Rs. 21.17 cr. The RI is opening for subscription on August 26, 2024, and will close on September 03, 2024. The company is offering RI in the ratio of 3 for 2 to its eligible stakeholders as of the record date of August 16, 2024. The company is asking Rs. 2.50 per share on application for the number of shares applied and the rest by one or more subsequent calls as determined by the company. Post allotment, shares will be listed on BSE. The company is spending Rs. 0.40 cr. for this RI process, and from the net proceeds, it will utilize Rs. 12.50 cr. for working capital, Rs. 4.36 cr. for repayment of certain borrowings, and Rs. 3.91 cr. for general corporate purposes.
While the RI is self-managed by the company itself, Navigant Corporate Advisors Ltd. is the advisor to the issue and Skyline Financial Services Pvt. Ltd. is the registrar to the issue.
Post-RI, company's current paid-up equity capital of Rs. 14.11 cr. will stand enhanced to Rs. 35.28 cr. Based on the RI pricing, the company is looking for a market cap of Rs. 35.28 cr.
FINANCIAL PERFORMANCE:
On the financial performance front, for the last two fiscals, the company has (on a consolidated basis) posted a total income/net profit/ - (loss) of Rs. 29.72 cr. / Rs. 0.34 cr. (FY23), and Rs. 9.51 cr. / Rs. - (0.35) cr. (FY24). It posted de-growth for FY24 compared to previous fiscal.
DIVIDEND POLICY:
The offer document is silent on company's dividend policy. AS per BSE Web, it has not paid any dividends for the reported periods. It will adopt a prudent dividend policy post listings of RI shares based on its financial performance and future prospects.
SCRIP PERFORMANCE: BASED ON BSE WEBSITE DATA: SCRIP CODE: 538351 (FV Rs. 10).
The scrip last closed on cum-right basis at Rs. 19.34 on August 14, 2024, and opened on an ex-right basis at Rs. 14.00 on August 16, 2024. Since then, it has marked a high/low of Rs. 15.44 / Rs. 14.00. The scrip last closed at Rs. 15.44 as of August 23, 2024. For the last 52 weeks' it has posted a high/low of Rs. 15.44 / Rs. 3.05. The counter is currently under ESM: Stage 2.
The promoters' holding has been constant at 5.72% for the last three quarters ended with June 30, 2024. The counter is well managed by the vested interest parties above the par value to tempt investors.
Review By Dilip Davda on August 25, 2024
DISCLAIMER: No financial information whatsoever published anywhere here should be construed as an offer to buy or sell securities, or as advice to do so in any way whatsoever. All matter published here is purely for educational and information purposes only and under no circumstances should be used for making investment decisions. Readers must consult a qualified financial advisor before making any actual investment decisions, based on the information published here. My reviews do not cover GMP market and operators game plans. Any reader taking decisions based on any information published here does so entirely at their own risk. Investors should bear in mind that any investment in stock markets is subject to unpredictable market-related risks. The above information is based on RHP and other documents available as of date coupled with market perception. The author has no plans to invest in this offer.
About Dilip Davda
Dilip Davda is veteran journalist associated with stock market since 1978. He is contributing to print and electronic media on stock markets/insurance/finance since 1985.
Dilip Davda is a leading reviewer of public issues and NCDs in the primary stock market in India. The knowledge he gained over 3 decades while working in the stock market and a strong relationship with popular lead managers makes his reviews unique. His detail fundamental and financial analysis of companies coming up with IPO helps investors in the primary stock market. Dilip Davda has a special interest in analyzing the SME companies and writing reviews about their public issues. His reviews are regularly published online and in news papers.
(Dilip Davda -SEBI registered Research Analyst-Mumbai,
Registration no. INH000003127 (Perpetual)
Email id: dilip_davda@rediffmail.com ).
The A.f. Enterprises Rights Issue 2024 Analysis helps you to understand about the company, offer detail, valuation, capital structure and financial performance. Our SEBI registered Rights Issue Analysts tells you if A.f. Enterprises Rights Issue 2024 worth investing. The A.f. Enterprises Rights Issue 2024 Note sets the Rights Issue expectations in systematic way which tells you if A.f. Enterprises Rights Issue 2024 good to buy (good or bad / yes or no). The Rights Issue Forecast tells you weather to invest in A.f. Enterprises Rights Issue 2024 by providing Rights Issue recommendations i.e. subscribe, avoid and neutral.
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