Zerodha (Trading Account)
FREE Equity Delivery and MF
Flat ₹20/trade Intra-day/F&O
Zerodha (Trading Account)
FREE Equity Delivery and MF
Flat ₹20/trade Intra-day/F&O
|
|
• The company kept changing its name and activities.
• It is primarily in the business of trading in agro commodities that is highly competitive and fragmented segment.
• The RI is priced aggressively and has negative PE.
• Over 15-fold jump in post-RI equity base also hints at its capital servicing issue.
• Simply avoid such offers and stay away.
PREFACE:
It's a height of surprise that the company that has no activities for the reported periods of the offer document is permitted to RI and that too at a premium. Its current equity of Rs. 2.24 cr. will stand -enhanced to Rs. 34.72 cr. post-RI that hints as its servicing issue as the company has no income so far.
ABOUT COMPANY:
IGC Industries Ltd. (IIL) was originally incorporates as Maxwell Trades and Exports Ltd., which changed its name to IGC Foils Ltd. in 1998 and then to existing one in 2017. It specializes in the trading of agro commodities with a strong focus on the Kolkata market. Led by an experienced management team, the company leverages extensive industry connections to facilitate transactions and maintain a significant presence in bulk trading. The company primarily operates offline, dealing with prominent merchants in the region.
IGC Industries specializes in loose packaging and offers a range of core products, including organic fennel seed, organic jeera (cumin), cotton, and turmeric. The company's strategy emphasizes localized operations, prioritizing relationships and efficiency within the market. Compliance with organic certification standards ensures that the company adheres to quality and ethical practices.
The Company may carry on business as of traders/exporters, agents, representatives, dealers, producers, stockers, importers or distributors, of various commodities. It can carry purchase, acquire, hold and dispose of or otherwise deal and invest in activities in any Shares, Debenture and other Securities in or of any company or companies and real estate or properties out of owned or borrowed funds.
The Company may also carry on the business of manufacturers, producers, processors, Importers, Exporters, Buyers, Sellers of and dealers in all kinds of fibers, fabrics and textile and hosiery goods, prepared or manufactured from cotton etc. The Company can also deal in all kinds of metals, plastics, melamine, aluminum, steel, aluminum foil and aluminum raw materials and products.
All these segments are overcrowded and highly competitive and fragmented one. As of the date of this offer document, it had just 3 employees on its payroll.
ISSUE DETAILS:
The company is coming out with its Rights Issue (RI) of 32480000 equity shares of Rs. 10 each at a fixed price of Rs. 13 per share to mobilize Rs. 42.22 cr. The RI opens for subscription on November 04, 2024, and will close on November 18, 2024. The company is offering RI in the ratio of 29 for 2 to its eligible stakeholders as of the record date of October 18, 2024. (While the first page of the offer document shows record date of October 16, 2024, the capital structure table on page no. 33 shows record date of October 18, 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. 0.80 cr. for this RI process, and from the net proceeds, it will utilize Rs. 16.00 cr. for working capital, Rs. 20.00 cr. for proposed acquisition of CNX Corp. Ltd. and Rs. 5.42 cr. for general corporate purposes.
The issue is self-managed by the company itself, and Purva Sharegistry (India) Pvt. Ltd. is the registrar to the issue.
Post-RI, company's current paid-up equity capital of Rs. 2.24 cr. will stand enhanced to Rs. 34.72 cr. (Based on the RI pricing, the company is looking for a market cap of Rs. 45.14 cr.
FINANCIAL PERFORMANCE:
On the financial performance front, for the last two fiscals, it has posted a total income/net profit/ - (loss) of Rs. 0.001 cr. / Rs. - (0.18) cr. (FY23), Rs. NIL cr. / Rs. - (0.39) cr. (FY24). For Q1 of FY25 ended on June 30, 2024, it posted a loss of Rs. - (0.004) cr. on a total income of Rs. NIL cr. Thus it has not posted any activities for the reported periods. Its equity is rising over 15 times, raising alert on its servicing part. It's a big surprise as to how this company's offer documents have been approved.
DIVIDEND POLICY:
The company has not paid any dividends for the reported periods of the offer documents. It will adopt a prudent dividend policy based on its financial performance and future prospects.
SCRIP PERFORMANCE: BASED ON BSE WEBSITE DATA: SCRIP CODE: 539449 (FV Rs. 10).
The scrip last closed on cum-right basis at Rs. 34.99 on October 17, 2024, and opened on an ex-right basis at Rs. 16.99 on October 18, 2024. Since then, it has marked high/low of Rs. 17.85 / Rs. 14.02. The scrip last closed at Rs. 15.20 as of October 31, 2024. For the last 52 weeks' it has posted a high/low of Rs. 24.40 / Rs. 10.32. The counter is currently under GSM: stage 0, and LT: Stage 1.
The promoters' holding has declined to NIL as of September 30, 2024 from 65.49% as of March 31, 2024. The counter is well managed above the RI price by vested interest parties, to tempt investors.
Review By Dilip Davda on November 1, 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 Igc 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 Igc Industries Rights Issue 2024 worth investing. The Igc Industries Rights Issue 2024 Note sets the Rights Issue expectations in systematic way which tells you if Igc Industries Rights Issue 2024 good to buy (good or bad / yes or no). The Rights Issue Forecast tells you weather to invest in Igc Industries Rights Issue 2024 by providing Rights Issue recommendations i.e. subscribe, avoid and neutral.
Add a public comment...
FREE Intraday Trading (Eq, F&O)
Flat ₹20 Per Trade in F&O
|
|
