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• The company is engaged in a dairy, agro product and steel segments, which are highly competitive and fragmented segments.
• It marked inconsistency in its top and bottom lines for the reported periods.
• The counter is well managed above RI priced by vested interests as the promoter's holding is just around 4%.
• The issue appears aggressively priced and not in line with its financial performance.
• There is no harm in skipping this "High Risk/Low Return" pricey RI.
ABOUT COMPANY:
Pradhin Ltd. (PL) offers a diverse range of services across the steel and agriculture sectors and Dairy products. Its Business model is customer centric, and requires optimum utilization of existing resources, assuring quality supply and achieving consequent economies of scale. The business scale generation is basically due to development of new markets domestically by exploring customer needs and by maintaining the consistent quality output. As of March 31, 2024, it had just 13 employees on its payroll.
ISSUE DETAILS:
The company is coming out with its Rights Issue (RI) of 19338640 equity shares of Rs. 10 each at a fixed price of Rs. 25.00 per share to mobilize Rs. 48.35 cr. The RI opens for subscription on November 25, 2024, and will close on December 16, 2024. The company is offering RI in the ratio of 53 for 10 to its eligible stakeholders as of the record date of November 14, 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. 0.75 cr. for this RI process, and from the net proceeds, it will utilize Rs. 43.75 cr. for working capital, and Rs. 3.85 cr. for general corporate purposes.
The issue is self-managed by the company itself, and Cameo Corporate Services Ltd. is the registrar to the issue.
Post-RI, company's current paid-up equity capital of Rs. 3.65 cr. will stand enhanced to Rs. 22.99 cr. Based on the RI pricing, the company is looking for a market cap of Rs. 57.47 cr.
FINANCIAL PERFORMANCE:
On the financial performance front, for the last two fiscals, it has posted a total income/net profit/ - (loss) of Rs. 17.19 cr. / Rs. - (0.10) cr. (FY23), and Rs. 5.44 cr. / Rs. 0.54 cr. (FY24). For Q1 of FY25 ended on June 30, 2024, it earned a net profit of Rs. 0.35 cr. on a total income of Rs. 0.52 cr. It reported inconsistency in its top and bottom lines for the reported periods.
DIVIDEND POLICY:
The offer document is silent on its dividend policy. It will adopt a prudent dividend policy based on its financial performance and future prospects.
SCRIP PERFORMANCE: BASED ON BSE WEBSITE DATA: SCRIP CODE: 530095(FV Rs. 10).
The scrip last closed on cum-right basis at Rs. 33.14 on November 13, 2024, and opened on an ex-right basis at Rs. 27.59 on November 14, 2024. Since then, it has marked high/low of Rs. 30.40 / Rs. 27.59. The scrip last closed at Rs. 29.00 as of November 22, 2024. For the last 52 weeks' it has posted a high/low of Rs. 53.27 / Rs. 25.66. The counter is currently under ESM: Stage 1.
The promoters' holding has declined from 8.99% (March 31, 2024) to 4.20% (September 30, 2024). The counter is well managed by vested interests above RI pricing.
Review By Dilip Davda on November 22, 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 Pradhin 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 Pradhin Rights Issue 2024 worth investing. The Pradhin Rights Issue 2024 Note sets the Rights Issue expectations in systematic way which tells you if Pradhin Rights Issue 2024 good to buy (good or bad / yes or no). The Rights Issue Forecast tells you weather to invest in Pradhin Rights Issue 2024 by providing Rights Issue recommendations i.e. subscribe, avoid and neutral.
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