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• The company is offering concept to commissioning solutions for various business.
• It marked inconsistency in its top lines for the reported periods.
• There is no promoters' holding in the company, that remains major concern.
• The counter is well operated by vested interests above the RI pricing.
• Well-informed/cash surplus investors may park moderate funds for long term.
ABOUT COMPANY:
Mitcon Consultancy & Engineering Services Ltd. (MCESL) is an ISO 9001:2015 certified Technical Consulting Organization (TCO) offering Concept to Commissioning solutions for various businesses for last 40+ Years. MITCON has got an experience in multiple industry verticals include Energy Transition,
Renewables, Biofuels, Green Chemistry, Skill Development, Environment Management and Engineering, Business Advisory Services. It is headquartered at Pune and have presence across the country through regional offices at Mumbai, Delhi, Ahmedabad, , Bengaluru, Nanded, Raipur and Nagpur.
The company operates as a professionally managed company and over the last four decades, it has gained proficiency in providing corporate solutions in power, energy efficiency, renewable energy, climate change and environmental management sectors. Over the years, it has diversified into providing services to banking, infrastructure and biotechnology sectors. MCESL provides solutions to clients depending on their requirements inter alia including feasibility studies, detailed project reports, techno economic feasibility reports, financial syndication, lender's engineer services, EIA, basic and detailed engineering, bid process management, project management, cluster development, technical/ financial restructuring, energy audits, corporate debt restructuring, due diligence, qualitative and market research, assets/ business valuation and consultation services in wind power project.
It also conducts IT based training courses and skill based training programs. In addition, MITCON considers the Sustainable Development Goals (SDGs) an important initiative for realizing a sustainable society and improving people's Quality of Life (QoL). Thus, MITCON is carrying out its Engineering and Consultancy Services which cater ESG Reporting, Sustainability Reporting, Climate Change Mitigation & Adaptation, Carbon Neutrality & Net Zero, Carbon Credits & Trading to achieve UN's Sustainable Development Goals.
MITCON has successfully completed 18000+ Consulting Assignments across 50+ Countries in Asia, Middle East, and African Markets and has trained more than 25 Lakh individuals under various Government & Non-Government Skill Development & Entrepreneurship Programs with record 75% placements. MITCON has also successfully completed 25000+ studies. As of April 15, 2024, it had 216 employees on its payroll.
ISSUE DETAILS:
The company is coming out with a Rights Issue (RI) of 4241321 equity shares of Rs. 10 each at a fixed price of Rs. 76 per share to mobilize Rs. 32.23 cr. The RI opens for subscription on June 28, 2024, and will close on July 26, 2024. The company is offering RI in the ratio of 6 for 19 to its eligible stakeholders as of the record date of June 20, 2024. The company is asking for Rs. 19 per share (i.e. 25%) on application and the rest will be called upon by one or more subsequent calls by the company from time to time. Post allotment, RIs will be listed on NSE. The company is spending Rs. 0.50 cr. for this RI process and from the net proceeds, it will utilize Rs. 5.91 cr. for investment in wholly owned subsidiary Mitcon Sun Power Ltd., Rs. 0.53 cr. for upgradation of environment laboratory, Rs. 2.43 cr. for investment in joint venture Mitcon Nature Based Solutions Ltd., Rs. 1.50 cr. for investment in front end engineering design development, Rs. 0.22 cr. for acquiring instruments for training, Rs. 1.31 cr. for capex on refurbishment of office space, Rs. 12.50 cr. for working capital, and the rest for general corporate purposes.
The RI is solely lead managed by Srujan Alpha Capital Advisors LLP and Link Intime India Pvt. Ltd. is the registrar to the issue.
Post RI, company's current paid-up equity capital of Rs. 13.43 cr. will stand enhanced to Rs. 17.95 cr. Based on the RI pricing, the company is looking for a market cap of Rs. 136.39 cr.
FINANCIAL PERFORMANCE:
On the financial performance front, for the last three fiscals, the company has (on a consolidated basis) posted a total income/net profit of Rs. 107.76 cr. / Rs. 1.50 cr. (FY22), Rs. 85.75 cr. / Rs. 3.80 cr. (FY23), and Rs. 133.16 cr. / Rs. 5.63 cr. (FY24). The financial data pages are blurred and not readable (See page nos. 215 to 295 of the offer document PDF). There appears to be some mismatch in net profit figures for FY23, as the offer document shows Rs. 4.39 cr. net profit for FY23 on page no. 135 and Rs. 3.80 cr. on page no. 218 of the offer document.
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 NSE WEBSITE DATA: SCRIP CODE: MITCON (FV Rs. 10).
The scrip last closed on cum-right basis at Rs. 183.00 on June 19, 2024, and opened on an ex-right basis at Rs. 150.00 on June 20, 2024. Since then, it has marked a high/low of Rs. 154.88 / Rs. 132.00. The scrip last closed at Rs. 139.21 as of June 26, 2024. For the last 52 weeks' it has posted a high/low of Rs. 161.69 / Rs. 57.59. The counter is currently under ST ASM-1.
The promoters' holding has been NIL for the last three quarters ended with March 31, 2024. The counter is well managed above the RI price to tempt investors.
Review By Dilip Davda on June 26, 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 Mitcon 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 Mitcon Rights Issue 2024 worth investing. The Mitcon Rights Issue 2024 Note sets the Rights Issue expectations in systematic way which tells you if Mitcon Rights Issue 2024 good to buy (good or bad / yes or no). The Rights Issue Forecast tells you weather to invest in Mitcon Rights Issue 2024 by providing Rights Issue recommendations i.e. subscribe, avoid and neutral.
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