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• The company is engaged in speciality chemical business.
• It marked steady growth in its top and bottom lines. 9M-FY24 marked robust growth in its bottom line.
• The RI is priced at a discount of around 25% based on its last traded price.
• Well-informed investors may park funds for the long term rewards.
ABOUT COMPANY:
Sanginita Chemicals Ltd. (SCL) that initially started production of Cuprous Chloride and Cupric Chloride at its factory situated at 3536/8, Near. GIDC, Chhatral, Dist- Gandhinagar (Unit I). Due to increase in the demand of products of the company in the year 2009, started Unit II to enhance production capacity by installing additional machinery for which it had acquired plot admeasuring area of 11,028 sq. meters situated at 1133, Near GIDC Phase-4 Chhatral, Ta. Kalol, Gandhinagar. The Company has got the consolidated consent order for 45 chemical products for producing 15,00,000 Kgs/Month vide GPCB consent no. GPCB/CCA/GNR-468/26535 dated December 3, 2009 having validity up to January 9, 2013.
The company has received the amended consolidated consent order vide amended consent no. GPCB/ID16613/CCA-GNR-468/130303 dated November 9, 2012 for producing the cuprous chloride from 1,00,000 Kgs/month to 5,00,000 kgs/month and additional consent for production of Ferric chloride (5,00,000 KGS/month), Zinc Sulphate (10,00,000 KGS/month) and Manganese Sulphate (5,00,000 KGS/month). In the year 2014-15, our Company has discontinued the operations of Unit I and sold the Land and Building of Unit I situated at Plot No. 3536/8, Near. GIDC, Chhatral, Dist- Gandhinagar and shifted all the plant and machinery to Unit II. In addition, the Company also undertakes the job work activity which contributes meager amount to total revenue.
At present, it manufactures three major products viz. Cuprous Chloride, Copper Sulphate and Cupric Chloride having installed capacity of 60,00,000 Kgs/p.a., 54,00,000 Kgs. /p. a and 3,50,000 Kgs. /P.a respectively which is used in dyes and pigment industries, paint industries, pharmaceuticals industries, electroplating industries, metal extraction industries and ink, Carbon paper, PVC pipe coating industries etc. As of the date of this offer document, it had 56 employees on its payroll.
ISSUE DETAILS:
The company is coming out with a Rights Issue (RI) of 8633850 equity shares of Rs. 10 each at a fixed price of Rs. 18 per share to mobilize Rs. 15.54 cr. The RI opens for subscription on May 15, 2024, and will close on May 27, 2024. The company is offering RI in the ratio of 1 for 2 to its eligible stakeholders as of the record date of May 07, 2024. The full amount is to be paid on application for the number of shares applied. Post allotment, shares will be listed on NSE. The company is spending Rs. 0.45 cr. for this RI process, and from the net proceeds, it will utilize Rs. 6.59 cr. for working capital, Rs. 5.00 cr. for capital expenditure, and Rs. 3.50 cr. for general corporate purposes.
This RI is lead managed by Fintellectual Corporate Advisors Pvt. Ltd. and Purva Sharegistry (I) Pvt. Ltd. is the registrar to the issue.
Post-RI, company's current paid-up equity capital of Rs. 17.27 cr. will stand enhanced to Rs. 25.90 cr. Based on the RI pricing, the company is looking for a market cap of Rs. 46.62 cr.
FINANCIAL PERFORMANCE:
On the financial performance front, for the last two fiscals, the company has posted a total income/net profit of Rs. 198.44 cr. / Rs. 0.35 cr. (FY22), and Rs. 149.13 cr. / Rs. 0.42 cr. (FY23). For 9M of FY24 ended on December 31, 2023, it earned a net profit of Rs. 1.35 cr. on a total income of Rs. 98.87 cr.
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: SANGINITA (FV Rs. 10).
The scrip last closed on cum-right basis at Rs. 25.20 on May 06, 2024, and opened on an ex-right basis at Rs. 22.35 on May 07, 2024. Since then, it has marked a high/low of Rs. 24.00 / Rs. 20.80. The scrip last closed at Rs. 24.00 as of May 14, 2024. For the last 52 weeks' it has posted a high/low of Rs. 40.05 / Rs. 14.86. The counter is currently under ESM-1.
The promoters' holding has been constant at 60.23% for the last three quarters ended with March 31, 2024. The counter is well managed above the RI price to lure investors.
Review By Dilip Davda on May 14, 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 Sanginita Chemicals 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 Sanginita Chemicals Rights Issue 2024 worth investing. The Sanginita Chemicals Rights Issue 2024 Note sets the Rights Issue expectations in systematic way which tells you if Sanginita Chemicals Rights Issue 2024 good to buy (good or bad / yes or no). The Rights Issue Forecast tells you weather to invest in Sanginita Chemicals Rights Issue 2024 by providing Rights Issue recommendations i.e. subscribe, avoid and neutral.
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