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• This is the 2nd RI from the company since February 2023.
• The company marked steady growth in its top and bottom lines for the reported periods.
• Based on its market price movement, the RI appears aggressively priced.
• Well-informed investors may park moderate funds for long term.
PREFACE:
The company's RI is opening on October 25, 2024, and its offer document is dated October 10, 2024, while the record date was of October 14, 2024, but the offer documents were made available on the previous eve at BSE Website, which is very surprising. Why such delay has taken place is a matter of explanation from the concerned parties.
ABOUT COMPANY:
Edvenswa Enterprises Ltd. (EEL) - formerly known as KLK Electrical Ltd., is a Holding Company of Edvenswa Tech INC with consolidated business interests in software development, enterprise solution engaged in the business of providing a range of Information Technology ("IT") solutions to companies across various sectors. It designs, develops and maintains software systems and solutions, create new applications and enhance the functionality of customers' existing software applications using EEL's proprietary tools, frameworks and processes which accelerate the overall delivery process with higher quality.
On January 20, 2023, Edvenswa Tech INC entered into a Membership Interest Purchase Agreement ('MIPA') with the existing shareholder of Seltosoft LLC to acquire its 100% of the outstanding share capital. The Company made this strategic acquisition as part of its growth plans to expand its offerings to Health care and Manufacturing domains. Seltosoft LLC has track record which is complementary to Edvenswa Tech INC's domain, and will help Edvenswa to expand the its range of services to the clients in Manufacturing, Health Care, Pharma, Medical Devices to provide IT services as well as the core domain areas of these companies like validation, quality control and testing services.
Edvenswa Group endeavors to bring together creativity and knowledge with a positive business strategy to furnish the requirements of diverse clients with an inclusive range of services which are comprehensive and cost-effective so that the client can focus on their core-competencies to improve or expand their businesses. The Edvenswa Group delivers services across all stages of the Software Development life-cycle, which enables it to work with a wide-range of customers and allows it to develop, enhance and deploy customers' software applications. The various services offered by the Company are UI/UX Design & Development; Rapid Prototyping & Product Development for Customers; Enterprise Application Engineering; Software Quality Assurance; Business Process Automation using Robotic Process Automation (RPA) tools; Social/Mobile Application Development; Application Integration, Maintenance & Migration Services; Cloud Migration Services; DevOps Engineering; Data Management & Integration; Big Data, Analytics & Data Science related Services; Application Integration; Mobile Application Development & Integration; and Extended R&D Partnering etc.
To provide software services through Global Delivery model, operating in different location within India and abroad, EEL acts as the offshore arm of the Business in India having its Registered Office at Hyderabad, India and Edvenswa Tech Inc. USA acts as the onsite arm of the business in abroad having its corporate and registered offices in United States of America.
EEL is planning to expand its business operations in India by providing an array of Software development services specializing in UI/UX Design & Development; Rapid Prototyping & Product Development for Customers; Enterprise Application Engineering; Software Quality Assurance; Business Process Automation using Robotic Process Automation (RPA) tools; Social/Mobile Application Development; Application Integration, Maintenance & Migration Services; Cloud Migration Services; DevOps Engineering; Data Management & Integration; Big Data, Analytics & Data Science related Services; Application Integration; Mobile Application Development & Integration; and Extended R&D Partnering etc. along with Edvenswa Tech INC. As of the date of filing this offer document, it had 43 employees on its payroll.
ISSUE DETAILS:
The company is coming out with its Rights Issue (RI) of 4500000 equity shares of Rs. 10 each at a fixed price of Rs. 60.00 per share to mobilize Rs. 27.00 cr. The RI opens for subscription on October 25, 2024, and will close on November 11, 2024. The company is offering RI in the ratio of 20 for 41 to its eligible stakeholders as of the record date of October 14, 2024.
The full amount is to be paid on application for number of shares applied. Post allotment, shares will be listed on BSE. The company is spending Rs. 0.62 cr. for this RI process, and from the net proceeds, it will utilize Rs. 9.20 cr. for product purchase in issuer company, Rs. 8.60 cr. for investment in wholly owned subsidiary, Rs. 2.65 cr. for acquisition of new business, and Rs. 5.93 cr. for general corporate purposes.
The issue is solely lead managed by Finshore Management Services Ltd., and Cameo Corporate Services Ltd. is the registrar to the issue. Aarthi Consultants Pvt. Ltd. is the registrar to the company.
Post-RI, company's current paid-up equity capital of Rs. 24.75 cr. will stand enhanced to Rs. 29.25 cr. Based on the RI pricing, the company is looking for a market cap of Rs. 175.50 cr.
FINANCIAL PERFORMANCE:
On the financial performance front, for the last three fiscals, it has (on a consolidated basis) posted a total revenue/net profit of Rs. 39.06 cr. / Rs. 3.74 cr. (FY22), Rs. 51.81 cr. / Rs. 5.79 cr. (FY23), Rs. 84.95 cr. / Rs. 7.38 cr. (FY24). For Q1 of FY25 ended on June 30, 2024, it earned a net profit of Rs. 2.24 cr. on a total revenue of Rs. 24.16 cr. Thus it marked steady growth in its financial performances for the reported periods.
DIVIDEND POLICY:
The company has not paid any dividends for the reported periods of the offer document. It will adopt a prudent dividend policy based on its financial performance and future prospects.
SCRIP PERFORMANCE: BASED ON BSE WEBSITE DATA: SCRIP CODE: 517170 (FV Rs. 10).
The scrip last closed on cum-right basis at Rs. 84.99 on October 11, 2024, and opened on an ex-right basis at Rs. 75.30 on October 14, 2024. Since then, it has marked high/low of Rs. 75.30 / Rs. 62.50. The scrip last closed at Rs. 66.35 as of October 24, 2024. For the last 52 weeks' it has posted a high/low of Rs. 99.85 / Rs. 32.54. The counter is currently under ESM: stage 1.
The promoters' holding has been constant at 62.73% for the last two quarters ended September 30, 2024. The counter is well managed above RI pricing to tempt investors. Based on its market price movements, the RI appears to be aggressively priced.
Review By Dilip Davda on October 24, 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 Edvenswa 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 Edvenswa Enterprises Rights Issue 2024 worth investing. The Edvenswa Enterprises Rights Issue 2024 Note sets the Rights Issue expectations in systematic way which tells you if Edvenswa Enterprises Rights Issue 2024 good to buy (good or bad / yes or no). The Rights Issue Forecast tells you weather to invest in Edvenswa Enterprises Rights Issue 2024 by providing Rights Issue recommendations i.e. subscribe, avoid and neutral.
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