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• The company after trying its luck for security market related services, is now venturing into pharma sector.
• Last three fiscals' financial performance posted static but minuscule earnings, which are not in line with asking price.
• Over two-fold jump in its post-RI equity base may post its servicing issue.
• This can be termed as "High Risk/Low Return" bet.
• There is no harm in skipping this risky bet.
ABOUT COMPANY:
Shrydus Industries Ltd. (SIL) that was originally incorporated as Hazari Trade and Holdings Ltd. in January 1983, and changed its name to VCK Capital Market Services Ltd. in April 1991. In May 2023, it again changed its name to Shrydus Industries Ltd. Originally it started security market related activities including a SEBI license as a Merchant Banker, which was relinquished it to SEBI in 2012.
After it changed its name to the existing one, its management also changed and now SIL is in the process of acquiring a 100 % export oriented pharmaceutical manufacturing Plant of tablets and capsules with over 400 products registered in the name of Astra Lifecare (India) Private Limited, which is situated in Gujarat region of India. The pharma plant shall be acquired by way of acquiring 100% shareholding and ownership. The Company proposes to utilize the proceeds of Right Issue for the purpose of acquisition of said pharmaceutical manufacturing Plant. As of the date of this letter of offer, it had 18 employees on its payroll.
ISSUE DETAILS:
The company is coming out with a Rights Issue (RI) of 20008810 equity shares of Rs. 10 each at a fixed price of Rs. 18 per share to mobilize Rs. 36.02 cr. The RI opens for subscription on August 05, 2024, and will close on August 19, 2024. The company is offering RI in the ratio of 5 for 3 to its eligible stakeholders as of the record date of July 19, 2024. The full amount it to be paid on application for the number of shares applied. Post allotment, shares will be listed on BSE. The company is spending Rs. 0.60 cr. for this RI process, and from the net proceeds, it will utilize Rs. 15.69 cr. for acquisition of Astra Lifecare (India) Pvt. Ltd., Rs. 9.32 cr. for repayment of loans availed from related party, Rs. 8.00 cr. for working capital, and Rs. 2.41 cr. for general corporate purposes.
The RI is self-managed by the company itself, and Skyline Financial Services Pvt. Ltd. is the registrar to the issue.
Surprisingly, this RI it underwritten by few underwriters. The offer document is missing details on this aspect.
Post-RI, company's current paid-up equity capital of Rs. 12.01 cr. will stand enhanced to Rs. 32.01 cr. Based on the RI pricing, the company is looking for a market cap of Rs. 57.63 cr. However, some garble is seen in RI offer document as its shows post-RI equity tally at Rs. 32.01 cr. (on page 36), but also shown post-RI tally at Rs. 32.02 cr. (on page 42). This is due to its pre-IPO paid up capital tally shown on both the referred pages. (12005286 shares and 12013786 shares). This appears to be some typographical errors.
FINANCIAL PERFORMANCE:
On the financial performance front, for the last three fiscals, the company has posted a total revenue/net profit of Rs. 9.00 cr. / Rs. 0.04 cr. (FY22), Rs. 9.31 cr. / Rs. 0.30 cr. (FY23), and Rs. 9.46 cr. / Rs. 0.53 cr. (FY24). Thus it has posted a minuscule but static financial performance so far. Over two-fold jump in post-RI paid-up equity capital may pose its servicing issues. Marginal jump in bottom lines for FY24 is not in line with asking price.
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 BSE WEBSITE DATA: SCRIP CODE: 511493 (FV Rs. 10).
The scrip last closed on cum-right basis at Rs. 21.99 on July 18, 2024, and opened on an ex-right basis at Rs. 18.64 on July 19, 2024. Since then, it has marked a high/low of Rs. 21.32 / Rs. 18.64. The scrip last closed at Rs. 20.95 as of August 02, 2024. For the last 52 weeks' it has posted a high/low of Rs. 33.26 / Rs. 15.30. The counter is currently under ASM LT: Stage 1.
The promoters' holding has been constant at 25.86% for the last three quarters ended with June 30, 2024. The counter is well managed above the RI price to tempt investors.
Review By Dilip Davda on August 4, 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 Shrydus Industries 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 Shrydus Industries Rights Issue 2024 worth investing. The Shrydus Industries Rights Issue 2024 Note sets the Rights Issue expectations in systematic way which tells you if Shrydus Industries Rights Issue 2024 good to buy (good or bad / yes or no). The Rights Issue Forecast tells you weather to invest in Shrydus Industries Rights Issue 2024 by providing Rights Issue recommendations i.e. subscribe, avoid and neutral.
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