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• The company is providing integrated hospitality services under one roof and has just one property under its management.
• It has incurred losses for the reported periods of the offer document.
• The counter is well operated by vested interests and trading at a hefty price.
• The RI is lucratively priced at a discount of around 91% to its last traded price.
• Well-informed investors may park funds for long term.
ABOUT COMPANY:
Emerald Leisures Ltd. (ELL) is an integrated hospitality company engaged in the business of providing club, banquet halls and accommodation services. It operates Club under the name 'Club Emerald' which is located at Swastik Park, Near Mangal Anand Hospital, Chembur, Mumbai - 400071, Maharashtra. Its Club, banquet halls and rooms are located in a single business premises enabling it to recognize itself as a 'full-service provider' in hospitality space offering services to various sections of society from middle-class segment to the upper-class segment.
The strategic location of its Club premises provides with an added advantage of offering 'Business cum Leisure' services to corporate customers for conducting conferences, meetings, exhibitions etc. Its Club's premises are spread across approx. 5,977 sq. mtrs plot of land. The Company was incorporated on March 8, 1933 as 'Phaltan Sugar Works Limited' and later on came to be known as 'Apte Amalgamations Limited'. Thereafter the name was changed to its present name i.e. 'Emerald Leisures Limited'. The Company ventured into the business of providing club membership in the financial year
2013-14.
While its banquet and room accommodation facilities are open for all, its members get access to wide range of recreational and sports facilities provided by Club. It provides various sports facilities to Club members such as badminton, table tennis, squash, snooker/billiards and other indoor and outdoor games along with additional access and benefits related to gym, library, spa and beauty salon, multi-cuisine restaurants and bar, swimming pool and well-designed rooms on fee-based arrangement. As on June 30, 2024, it had 688 club members. It has 70 affiliations with other clubs and resorts as on June 30, 2024. As of the said date, it had 39 employees on its payroll and additional 21 contract labourers in various departments.
ISSUE DETAILS:
The company is coming out with a Rights Issue (RI) of 10012400 equity shares of Rs. 5 each at a fixed price of Rs. 12.50 per share to mobilize Rs. 12.52 cr. The RI opens for subscription on September 17, 2024, and will close on September 24, 2024. The company is offering RI in the ratio of 2 for 1 to its eligible stakeholders as of the record date of September 10, 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. 0.37 cr. for this RI process, and from the net proceeds, it will utilize Rs. 9.50 cr. for repayment of certain borrowings, and Rs. 2.65 cr. for general corporate purposes.
The issue is self-managed by the company and Purva Sharegistry (India) Pvt. Ltd. is the registrar to the issue.
Post-RI, company's current paid-up equity capital of Rs. 2.50 cr. will stand enhanced to Rs. 7.51 cr. Based on the RI pricing, the company is looking for a market cap of Rs. 18.77 cr.
FINANCIAL PERFORMANCE:
On the financial performance front, for the last two fiscals, the company has posted a total income/net profit/ - (loss) of Rs. 14.89 cr. / Rs. - (10.14) cr. (FY23), Rs. 16.59 cr. / Rs. - (9.73) cr. (FY24). For Q1 of FAY25 ended on June 30, 2024, it posted a loss of Rs. 2.79 cr. on a total income of Rs. 3.64 cr. Thus it has been reporting losses for the recent financial periods.
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: 507265(FV Rs. 5).
The scrip last closed on cum-right basis at Rs. 306.95 on September 09, 2024, and opened on an ex-right basis at Rs. 116.00 on September 10, 2024. Since then, it has marked a high/low of Rs. 140.90 / Rs. 116.00. The scrip last closed at Rs. 140.90 as of September 16, 024. For the last 52 weeks' it has posted a high/low of Rs. 140.90 / Rs. 34.34. The counter is currently under ESM: Stage 1. Perhaps the lower floating stock has helped the operators to rig its prices to an unrealistic level for this loss making company.
The promoters' holding has been constant at 69.07% for the last three quarters ended with June 30, 2024. The counter is well managed by the vested interest counters and making this offer very attractive.
Review By Dilip Davda on September 16, 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 Emerald Leisures 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 Emerald Leisures Rights Issue 2024 worth investing. The Emerald Leisures Rights Issue 2024 Note sets the Rights Issue expectations in systematic way which tells you if Emerald Leisures Rights Issue 2024 good to buy (good or bad / yes or no). The Rights Issue Forecast tells you weather to invest in Emerald Leisures Rights Issue 2024 by providing Rights Issue recommendations i.e. subscribe, avoid and neutral.
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