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• The company which was in finance sector has not become trader in various goods.
• Its financial data shows minuscule scale of performance.
• Nearly threefold rise in its paid-up equity post RI may face servicing issues.
• There is no harm in skipping this "High Risk/Low Return" at par bet.
ABOUT COMPANY:
IFL Enterprises Ltd. (IEL) was a subsidiary of India Finsec Limited, and represents the other business activities of the group. It was engaged in the business of corporate advisory, debt syndication and execution services with paramount focus on small and medium enterprises (SMEs) in corporate and non-corporate sector. Further it was also involved in the business of trading in textile products primarily fabrics.
In the year 2021, our Company underwent change of Control in terms of Regulation 25 of Securities Exchange Board of India (Substantial Acquisition and Takeover of Shares) Regulation, 2011. Pursuant to the change of Control, the company of goods on retail as well as on wholesale basis in India or elsewhere and also act as Commission agent Stockiest on behalf of others.
Also, to carry on the business as exhibitors of various goods, services and merchandise and to undertake the necessary activities to promote sales of goods, services and merchandise manufactured/dealt with/provided by the Company. And to acquire share in various business entities including but not limited to companies, partnership firms LLPs and other legal entities in India or outside India by establishing the relationship of holding-subsidiary, joint venture and associate entities.
The Company entered into new business to carry on the business of import, export, distribute, sale, purchase or deal in agriculture produce of all description like fruits, vegetable, seeds, organic products and herbal products and to do trading of the agri-commodities whether perishable or non- perishable and also do stocking of the same at their own premises or leased premises and promote & sell their own brand along with farmer produce and trade in all the products required for cultivation, harvesting, production and developments of seeds, vegetable, fruits and herbal items. Also, to grow, produce, harvest raise or deal in agriculture produce and to set up processing unit, manufacturers, producers, processors, growers, fermentators, distillers, refiners, makers, inventors, convertors, importers, exporters, traders, buyers, sellers, retailers, wholesalers, suppliers, indenters, bottlers, packers, movers, preservers, stockiest, agents, merchants, distributors, consignors, jobbers, brokers or otherwise deal in all kinds of fertilizers, manures, plant and animal foods, pesticides, insecticides, fungicides and all types of chemicals used in apiculture, pisciculture, sericulture, horticulture, poultry farming and animal husbandry.
In year 2022, if formed a subsidiary in the name of Yamunashtakam Tradeventures Private Limited (YTPL) to further diversify its activities. Presently, the Company holds 100% of the total issued and paid up share capital of the YTPL, which is engaged in the business as dealer, trader, import and export agents, representatives, buying and selling agents, brokers, importers, buyers, sellers, exporters and to buy, sell, or otherwise trade various goods, services and merchandise and to undertake the necessary activities and deal in all commodities including but not limited to paper, fabrics and textiles.
Over the periods, the company has tried all gimmicks of change in business model, and now planning to raise its equity by nearly threefold with this RI. The company is operating in a highly competitive and fragmented segment. The offer document is silent on its employees' strength.
ISSUE DETAILS:
The company is coming out with its Rights Issue (RI) of 495269896 equity shares of Re. 1 each at par value to mobilize Rs. 49.53 cr. The RI opens for subscription on May 27, 2024, and will close on June 25, 2024. The company is offering RI in the ratio of 198 for 100 equity shares held by the eligible stakeholders as of the record date of May 17, 2024. The full amount it to be paid on application for the number of shares applied. Post allotment, shares will be listed on BSE. The company is spending Rs. 0.50 cr. for this RI process, and from the net proceeds, it will utilize Rs. 36.65 cr. for working capital, and Rs. 12.38 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. 25.01 cr. will stand enhanced to Rs. 74.54 cr. Based on the RI pricing, the company is looking for a market cap of Rs. 74.54 cr.
FINANCIAL PERFORMANCE:
On the financial performance front, the company has (on a consolidated basis) posted a total income/net profit/-(loss) of Rs. 9.47 cr. / Rs. 0.52 cr. (FY23). For 9M of FY24 ended on December 31, 2023, it earned a net profit of Rs. 1.52 cr. on a total income of Rs. 7.31 cr. Financial data for 9M-FY24 with a 24.36% margins appears to be a window dressing.
DIVIDEND POLICY:
The company has declared dividend of 0.01% for FY23 and FY24. 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: 540377 (FV Re. 1).
The scrip last closed on cum-right basis at Rs. 1.85 on May 16, 2024, and opened on an ex-right basis at Rs. 1.29 on May 17, 2024. Since then, it has marked a high/low of Rs. 1.55 / Rs. 1.29. The scrip last closed at Rs. 1.55 as of May 22, 2024 with vested interests market operations to tempt investors. For the last 52 weeks' it has posted a high/low of Rs. 10.68 / Rs. 1.04. The counter is currently under ESM: Stage 1.
The promoters' holding has been constant at 2.26% for the last two quarters ended with March 31, 2024. The counter is well managed above the par value by vested interests to lure investors.
Review By Dilip Davda on May 23, 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 IFL 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 IFL Enterprises Rights Issue 2024 worth investing. The IFL Enterprises Rights Issue 2024 Note sets the Rights Issue expectations in systematic way which tells you if IFL Enterprises Rights Issue 2024 good to buy (good or bad / yes or no). The Rights Issue Forecast tells you weather to invest in IFL Enterprises Rights Issue 2024 by providing Rights Issue recommendations i.e. subscribe, avoid and neutral.
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