Rapid Investments RI review (Avoid)

• The company is engaged in financial services in and around Jaipur City.
• It posted minuscule financial performance for the reported periods.
• The counter is dormant as it has not marked any trades since September 2024.
• The RI appears exorbitantly priced and is a "High Risk/No Return" bet.
• There is no harm in skipping this pricey offer.

ABOUT COMPANY:
Rapid Investments Ltd. (RIL) is a non-banking finance company registered with the RBI systemically important non-deposit accepting non-banking finance company ("NBFC") that provides loans against property for the purpose of home construction/purchase and MSME finance. It is currently operating in a 200-kilometer radius of Jaipur city with plans to expand to other parts of the state in the near future.

Rapid Investments extends Loan Against Property for the purposes of home construction, home extension / improvement and MSME finance against the borrowers' primary residence. The company works only with registered title deeds, providing funding at an average interest rate of 20%. The loans vary from 2-10 lacs, tenure of 3-7 years and do not exceed 40% of the market value of the pledged collateral. As of March 31, 2024, it had 18 employees on its payroll.

ISSUE DETAILS:
The company is coming out with its Rights Issue (RI) of 839744 equity shares of Rs. 10 each at a fixed price of Rs. 100 per share to mobilize Rs. 8.40 cr. The RI opens for subscription on September 26, 2024, and will close on October 10, 2024. The company is offering RI in the ratio of 25 for 39 to its eligible stakeholders as of the record date of September 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. 0.35 cr. for this RI process, and from the net proceeds, it will utilize Rs. 7.76 cr. for augmenting the capital base, and Rs. 0.29 cr. for general corporate purposes.

The issue is self-managed by the company and Link Intime India Pvt. Ltd. is the registrar to the issue. Beeline Capital Advisors Pvt. Ltd. is the advisor and underwriter to the issue.

Post-RI, company's current paid-up equity capital of Rs. 1.31 cr. will stand enhanced to Rs. 2.15 cr. Based on the RI pricing, the company is looking for a market cap of Rs. 21.50 cr.

FINANCIAL PERFORMANCE:
On the financial performance front, for the last four fiscals, the company has posted a total income/net profit of Rs. 0.59 cr. / Rs. 0.85 cr. (FY21), Rs. 0.46 cr. / Rs. 0.001 cr. (FY22), Rs. 0.31 cr. / Rs. 0.03 cr. (FY23), and Rs. 1.93 cr. / Rs. 0.20 cr. (FY24). It posted inconsistency in top and bottom lines for the reported periods, and the minuscule financial performance is not matching the asking price.

DIVIDEND POLICY:
The offer document is silent on its dividend policy. 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: 501351 (FV Rs. 10).
The scrip last closed on cum-right basis at Rs. 127.25 on September 09, 2024, and opened on an ex-right basis at Rs. 127.25 on September 09, 2024. Since then, we have not witnessed any trades on this counter. The scrip last closed at Rs. 127.25 as of September 09, 024. For the last 52 weeks' it has posted a high/low of Rs. 127.25 / Rs. 96.34.

The promoters' holding has been constant at 51.78% for the last three quarters ended on June 30, 2024. The counter is having no trades since September 09, 2024 and appears to be dormant.

Conclusion / Investment Strategy

The company is in the business of financial services and has posted minuscule financial performance for the reported periods. The counter is dormant as it has not witnessed any trades post September 09, 2024. The issue appears aggressively priced considering its negligible earnings. There is no harm in skipping this exorbitantly priced offer that can be termed as “High Risk/No Return” bet.

Reviewer recommends Avoid to the issue.

Review By Dilip Davda on September 26, 2024

Review Author

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 Rapid Investments 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 Rapid Investments Rights Issue 2024 worth investing. The Rapid Investments Rights Issue 2024 Note sets the Rights Issue expectations in systematic way which tells you if Rapid Investments Rights Issue 2024 good to buy (good or bad / yes or no). The Rights Issue Forecast tells you weather to invest in Rapid Investments Rights Issue 2024 by providing Rights Issue recommendations i.e. subscribe, avoid and neutral.

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Rapid Investments RI review (Avoid)

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