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• The company is engaged in the manufacturing of protective gears of various types.
• It marked growth in its top and bottom lines for the reported periods, but at a minuscule level.
• This RI is at a discount of around 32.5% based on its last traded price.
• The company is operating in a highly competitive and fragmented segment.
• Well-informed/cash surplus investors may consider moderate investment for the medium term.
PREFACE:
The company came with its maiden IPO worth Rs. 2.46 cr. at a price of Rs. 37 per share in June 2020.
Now, it is coming out with a RI at a price of Rs. 34 per share. Its top line has been under Rs. 5 cr. and it wants Rs. 7+cr. from the market. This offer can be termed as a "High Risk/Low Return" bet.
ABOUT COMPANY:
Billwin Industries Ltd. (BIL) is engaged in the business of manufacturing of protective gears; these gears are basically rain wears, life jackets and inflatable boats which are used in seas and other water bodies for the safety. The raw material used to manufacture these protective gears is called Coated Fabric. The company is also involved in trading of the protectives gears that it manufacture. Its product range includes Rainwear Coat, Rain Jacket, Pulsar Jacket, Winter Jacket, River Raft Boat, Inflatable Boats Dinghys, Sleeping Bags, School Bags, Life jackets, Rucksack, facial's mask etc.
Its manufacturing unit is located at 79, Vishal Industrial Estate Village Road, Bhandup West Mumbai Maharashtra. Its manufacturing process starts with procurement of coated fabrics and then the process of cutting, stitching, sewing, finishing, inspection and packing of the final products is been carried on.
In the Year 2020, the Company through a Business Transfer Agreement (BTA), has acquired a proprietor firm named Billwin Industries. The Business takeover has resulted into a synergy effect which will provide an inorganic business growth and would result in a stable financial position of the company in the coming future. This acquisition has provided a strategy to build a sustainable and profitable business and synergies through supply chain opportunities and operational improvements, go-to- market and distribution network optimization, scale efficiencies in cost areas such as marketing, and optimization of overlapping infrastructure. It is an advantageous to combine the activities and operations of both proprietor firm and Company into a single Company for synergistic linkages and the benefit of combined financial resources. This will be reflected in the profitability of the Company. This Takeover has also provided an opportunity to leverage combined assets and build a stronger sustainable business and will enable optimal utilization of existing resources and provide an opportunity to fully leverage strong assets, capabilities, experience, expertise.
Other benefits that can be seen for increase in reserves, investments, goodwill, manpower, finances, customers, distributors, brands etc. at its disposal for meeting its requirements. It also has an exclusive tie up with e-commerce platform such as Flipkart, Amazon, Buy Hatke, Shopcules Xerve, although its majority sale happens through non- e commerce mode but opting for the e-commerce platforms gives a new market and would generate brand awareness in the mind of the potential customers. As of the date of this offer document, it had just 9 employees on its payroll.
ISSUE DETAILS:
The company is coming out with a Rights Issue (RI) of 2130724 equity shares of Rs. 10 each at a fixed price of Rs. 34 per share to mobilize Rs. 7.24 cr. The RI opens for subscription on May 13, 2024 and will close on May 21, 2024. The company is offering RI in the ratio of 1 for 1 to its eligible stakeholders as of the record date of April 29, 2024. The full amount it to be paid on application for the number of shares applied. Post allotment, shares will be listed on BSE SME. The company is spending Rs. 0.22 cr. for this RI and from the net proceeds, it will utilize Rs. 5.57 cr. for working capital, and Rs. 1.45 cr. for general corporate purposes.
The RI is self-managed by the company and Bigshare Services Pvt. Ltd. is the registrar to the issue.
Post-RI, company's current paid-up equity capital of Rs. 2.13 cr. will stand enhanced to Rs. 4.26 cr. Based on the RI pricing, the company is looking for a market cap of Rs. 14.49 cr.
FINANCIAL PERFORMANCE:
On the financial performance front, for the last three fiscals, the company has posted a total revenue/net profit of Rs. 2.85 cr. / Rs. 0.06 cr. (FY21), Rs. 4.39 cr. / Rs. 0.22 cr. (FY22), and Rs. 4.82 cr. / Rs. 0.74 cr. (FY23). Though it posted growth in its top and bottom lines for the reported periods, it had almost static top line for the last two fiscals. Its financial performance can be termed as a minuscule and it wants to raise higher funds than its top line.
As per the exchange filing, as per unaudited results, for H1 of FY24 ended on September 30, 2023, it earned a net profit of Rs. 0.56 cr. on a total income of Rs. 3.31 cr.
DIVIDEND POLICY:
The company has not declared any dividends for the reported periods of the offer document. 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: 543209 (FV Rs. 10).
The scrip last closed on cum-right basis at Rs. 96.80 on April 26, 2024, and opened on an ex-right basis at Rs. 58.90 on April 29, 2024. Since then, it has marked a high/low of Rs. 63.99 / Rs. 48.07. The scrip last closed at Rs. 50.40 as of May 08, 2024. For the last 52 weeks' it has posted a high/low of Rs. 70.17 / Rs. 27.11. The counter is currently under ASM ST: Stage 1.
The promoters' holding has been constant at 54.80% for the last three quarters ended with March 31, 2024. The counter is well managed above the RI price to lure investors.
Review By Dilip Davda on May 12, 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. My reviews do not cover GMP market and operators game plans. Readers must consult a qualified financial advisor before making any actual investment decisions, based the on information published here. With entry barriers, SEBI wants only well-informed investors to participate in such offers. With crazy listings in the recent past, SME IPOs drew the attention of investors across the board and lead to seer madness. However, as SME issues have entry barriers and continued low preference from the broking community, any reader taking decisions based on any information published here does so entirely at their own risk. The above information is based on information available as of date coupled with market perceptions. 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 Billwin Industries 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 Billwin Industries Rights Issue 2024 worth investing. The Billwin Industries Rights Issue 2024 Note sets the Rights Issue expectations in systematic way which tells you if Billwin Industries Rights Issue 2024 good to buy (good or bad / yes or no). The Rights Issue Forecast tells you weather to invest in Billwin Industries Rights Issue 2024 by providing Rights Issue recommendations i.e. subscribe, avoid and neutral.
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