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• The company has changed its business model thrice so far and currently engaged in pet bottle waster.
• The company marked inconsistency in its financial performances for the reported periods.
• It is operating in a highly competitive and fragmented segment.
• Though the issue appears attractively priced, it can be termed as "High Risk/Low Return" bet.
• There is no harm in skipping this RI, where promoter's holding is negligible.
ABOUT COMPANY:
Ganesha Ecoverse Ltd. (GEL) originally got listed as Mahabir Metallex Ltd. on BSE SME, and renamed it as SVP Housing Ltd. - is now known as Ganesha Ecoverse Ltd.
It initially established itself in the steel industry, engaging in the marketing, trading, and distribution of a diverse range of steel products, including TMT Bars, Rolled Products, Billets, Colour Coated Sheets, Steel strips, Cold Rolled Strips, Round Angle Channels & Bars, Ingots, and Steel Pipes and Tubes. In 2016 it ventured in to real estate business under SVP banner, and now it is entering into polyethylene terephthalate Textile business. Thus it kept changing its businesses over the years.
The Company is now focused to engage in the manufacturing or dealing in all kinds of plastic and textile products (whether primary, intermediate or in final form), virgin or recycled, including spinning, knitting, weaving, garmenting etc. Although, presently by far it has done trading of the post-consumer pet bottles waste.
As of date it is into the business of trading post-consumer pet bottles waste that involves the buying and selling of post-consumer PET (Polyethylene Terephthalate) bottle scrap. PET bottles are widely used for packaging various beverages, household products, and personal care items due to their lightweight, durable, and recyclable nature and their scrap is used, after processing and recycling, in making textile grade fibers, filament yarn, bottle grade pet resin, packaging sheets, etc. It is now planning to buy stake in GESL Spinners Pvt. Ltd., which is engaged in the business of production of textile grade spun yarn and sewing thread out of Recycled Polyester Staple Fibre (RPSF).
ISSUE DETAILS:
The company is coming out with its Rights Issue (RI) of 13415280 equity shares of Rs. 10 each at a fixed price of Rs. 35 per share to mobilize Rs. 46.95 cr. The RI opens for subscription on September 20, 2024, and will close on September 30, 2024. The company is offering RI in the ratio of 6 for 5 to its eligible stakeholders as of the record date of September 09, 2024.The full amount is to be paid on application for number of shares applied. Post allotment, shares will be listed on BSE SME. The company is spending Rs. 0.40 cr. for this RI process, and from the net proceeds, it will utilize Rs. 46.49 cr. for investment in equity shares of GESL Spinners Pvt. Ltd., and Rs. 0.06 cr. for general corporate purposes.
The issue is self-managed by the company and Skyline Financial Services Pvt. Ltd. is the registrar to the issue.
Post-RI, company's current paid-up equity capital of Rs. 11.18 cr. will stand enhanced to Rs. 24.59 cr. Based on the RI pricing, the company is looking for a market cap of Rs. 86.08 cr.
FINANCIAL PERFORMANCE:
On the financial performance front, for the last three fiscals, the company has posted a total income/net profit/ - (loss) of Rs. 23.11 cr. / Rs. - (1.28) cr. (FY22), Rs. 0.23 cr. / Rs. - (3.24) cr. (FY23), and Rs. 12.39 cr. / Rs. 4.23 cr. (FY24). While it marked inconsistency in its top and bottom lines, boosted profits in FY24 appears to have been window dressed for fancy valuations.
DIVIDEND POLICY:
The company has not paid 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: 539041 (FV Rs. 10).
The scrip last closed on cum-right basis at Rs. 82.95 on September 06, 2024, and opened on an ex-right basis at Rs. 54.95 on September 09, 2024. Since then, it has marked a high/low of Rs. 57.89 / Rs. 48.15. The scrip last closed at Rs. 49.50 as of September 19, 024. For the last 52 weeks' it has posted a high/low of Rs. 71.93 / Rs. 41.13.
The promoters' holding has been around 1.34% for the last two quarters ended on June 30, 2024. The counter is well managed by the vested interest to keep it above the RI price, to tempt investors.
Review By Dilip Davda on September 19, 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 Ganesha Ecoverse 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 Ganesha Ecoverse Rights Issue 2024 worth investing. The Ganesha Ecoverse Rights Issue 2024 Note sets the Rights Issue expectations in systematic way which tells you if Ganesha Ecoverse Rights Issue 2024 good to buy (good or bad / yes or no). The Rights Issue Forecast tells you weather to invest in Ganesha Ecoverse Rights Issue 2024 by providing Rights Issue recommendations i.e. subscribe, avoid and neutral.
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