Patel Integrated Logi Rights issue review (May apply)

PILL is currently engaged in air freight business for B2B segment.
The company hived off its surface transport business in FY20.
Due to pandemic, it suffered a severe setback for first half of FY21.
This at par right offer is worth considering with a long term perspective.

ABOUT COMPANY

Patel Integrated Logistics Ltd. (PILL) is engaged in the business of providing logistics services and unified solutions focusing on air transportation and surface transportation as well as ancillary services such as courier services and warehousing.

It operates business through a pan-India network comprising 24 branch offices and presence across India covering major cities/towns/airports. In 1994, the Company through an initial public offering listed its Equity Shares on BSE Limited, Delhi Stock Exchange Limited, Ahmedabad Stock Exchange Limited, Madras Stock Exchange Limited and Calcutta Stock Exchange Limited. Subsequently, in 2008, the Equity Shares of the company were listed on National Stock Exchange Limited. Now it is quoting only on BSE and NSE. The maiden IPO in 1994 was at Rs. 45 per share.

In FY20, PILL sold its surface transport business as a going concern for a lump sum consideration of Rs. 38.50 cr. Currently it focuses on Air Freight business on a B2B basis.

ISSUE DETAILS

To part finance its plans for repayment/prepayment of certain borrowings (Rs. 8.50 cr.) and general corpus fund needs (Rs. 0.50 cr.), PILL is coming out with a rights issue in the ratio of 27 shares for every 47 shares held at par value of Rs. 10 per share. The company is issuing 9500000 equity shares to mobilize Rs. 9.50 cr. to the shareholders whose names were registered on the books of the company on the record date of February 18, 2021. The issue opens for subscription on February 26, 2021 and will close on March 12, 2021. The company is handling all process on its own and there is no Lead Manager for the issue. Bigshare Services Pvt. Ltd. is the registrar for the issue. Post allotment, shares will be listed on BSE and NSE. The company is spending Rs. 0.50 cr. for the entire rights issue process.

Post issue, PILL's current paid up equity capital of Rs. 16.54 cr. will stand enhanced to Rs. 26.04 cr.

FINANCIAL PERFORMANCE

On financial performance front, PILL has posted turnover/net profits of Rs. 428.97 cr. / Rs.7.75 cr. (FY18), Rs. 453.34 cr. / Rs. 2.92 cr. (IFY19) and Rs. 353.87 cr. / Rs. 3.70 cr. (FY20). Due to COVID-19 pandemic, the company has suffered a setback for the first half of current fiscal 2021 for which it has posted loss of Rs. -(1.18) cr. on a turnover of Rs. 69.94 cr.

For the last three fiscals, it has paid a dividend of 7.5% (FY18), 5.0% (FY19) and 1.0% (Fy20).

MARKET PRICE INFORMATION

Patel Integrated Logi Rights issue review

The scrip marked cum-right closing of Rs. 31.35 on February 16, 2021 and turned ex-right at Rs. 27.40 for opening trades on February 17, 2021 and closed at Rs. 28.05. Since then, it has shown decline in market price which closed at Rs. 24.85 on February 25, 2021. Thus the scrip is quoting at a good premium to the offer price of the rights issue. The scrip has marked 52 week high/low of Rs. 29.00/Rs. 6.81. (On ex-right basis).

Conclusion / Investment Strategy

This at par right issue offer may be considered by the eligible investors and they also may opt for addition shares with a long term investment perspective.

Review By Dilip Davda on February 25, 2021

The Patel Integrated Logistics Rights Issue 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 Patel Integrated Logistics Rights Issue worth investing. The Patel Integrated Logistics Rights Issue Note sets the Rights Issue expectations in systematic way which tells you if Patel Integrated Logistics Rights Issue good to buy (good or bad / yes or no). The Rights Issue Forecast tells you weather to invest in Patel Integrated Logistics Rights Issue by providing Rights Issue recommendations i.e. subscribe, avoid and neutral.