Zerodha (Trading & Demat Account)
FREE Equity Delivery and MF
Flat ₹20/trade Intra-day/F&O
Zerodha (Trading & Demat Account)
FREE Equity Delivery and MF
Flat ₹20/trade Intra-day/F&O
|
|
• The company is in the manufacturing of large size critical castings for wind turbine industry and other related products.
• While it posted growth in its top lines for the reported periods, it marked inconsistency in the bottom lines.
• The sudden boost in its bottom lines for FY24 raises eyebrows and concern over its sustainability.
• The RI appears to be fully priced.
• Investors may park moderate funds for the long term.
ABOUT COMPANY:
Synergy Green Industries Ltd. (SGIL) is engaged in to manufacturing of large size critical castings for wind turbine Industry, wind gear boxes and general engineering applications like mining, Plastic Injection, & Pump Industries. Company started establishing a green field foundry project during 2011 and commenced the commercial production in June 2012. Foundry is located at strategic foundry cluster Kolhapur, Maharashtra and has got access to key resources like quality raw material & skilled manpower.
Company's location is also strategically closer to wind OEM's hub like Pune & Chennai. Company has got state of the art infrastructure to meet the stringent quality requirements for large castings. Only company in India to install a semi-automatic line for preparing the moulds and delivers excellent quality along with highest productivity. It maintains highest quality standards with complete range of in-house testing facilities approved by NABL along with highly skilled team. Company is certified for Quality Management Systems with ISO 9001:2015 for Quality, ISO 14001- 2015 for Environmental management & ISO 45001-2018 for Occupational Health & Safety standards. SGIL has also got ISO 27001 certification for Information Security Management Systems and ISO 50001 certification for Energy Management Systems.
Company is in to manufacturing of Ductile Iron, Grey Iron & Steel castings in the weight range of 3 MT to 30 MT single piece. It is equipped with best of the IT technology like MAGMA Simulation for flow and thermal analysis, ATAS System for liquid metal quality validation and SAP system for managing the business functions. Company is equipped with large castings material handling capability with 60 MT cranes, electric induction melting furnaces and furan moulding system. The company is installed with reclamation plants, pollution control equipment's which ensures environmentally friendly casting production with highest safety standards and energy efficiency.
SGIL's core strength is young qualified team who has developed many critical products with stringent quality requirements. In its endeavors, the team is supported by a robust IT infrastructure and communication network. With these capabilities it could build a strong customer base consisting of world's Top 10 Wind Turbine OEM's like Vestas, Siemens Gamesa, GE Renewable, Nordex & Senvion and Wind Gear Box customer like M/s ZF and M/s Flender. These customers have got more than 50% of world's market share in the wind industry. Further Company also built a strong customer base in Non-Wind Industry like Mining, Plastic Injection, Pumps & General Engineering. As of March 31, 2024, it had 620 employees on its payroll.
ISSUE DETAILS:
The company is coming out with its Rights Issue (RI) of 1413000 equity shares of Rs. 10 each at a fixed price of Rs. 325 per share to mobilize Rs. 45.92 cr. The RI opens for subscription on September 23, 2024, and will close on October 04, 2024. The company is offering RI in the ratio of 1 for 10 to its eligible stakeholders as of the record date of September 11, 2024.The full amount is to be paid on application for number of shares applied. Post allotment, shares will be listed on BSE SME. The company is spending Rs. 2.00 cr. for this RI process, and from the net proceeds, it will utilize Rs. 8.85 cr. for capex on enhancement of present foundry capacity from 30000 MT to 45000 MT, Rs. 5.01 cr. for capex on new fettling shop for 45000 MT foundry, Rs. 14.45 cr. for building 10000 MT new machining capacity, Rs. 7.08 cr. for captive solar plant installation, and Rs. 8.53 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. 14.13 cr. will stand enhanced to Rs. 15.54 cr. Based on the RI pricing, the company is looking for a market cap of Rs. 505.15 cr.
FINANCIAL PERFORMANCE:
On the financial performance front, for the last four fiscals, the company has posted a total income/net profit of Rs. 199.92 cr. / Rs. 3.18 cr. (FY21), Rs. 284.92 cr. / Rs. 1.43 cr. (FY22), Rs. 290.42 cr. / Rs. 0.87 cr. (FY23), and Rs. 328.13 cr. / Rs. 11.56 cr. (FY24). It posted inconsistency in bottom lines for the reported periods, but boosted profits for FY24 raises eyebrows and concern over its sustainability.
DIVIDEND POLICY:
The company has not paid 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: 541929 (FV Rs. 10).
The scrip last closed on cum-right basis at Rs. 443.55 on September 10, 2024, and opened on an ex-right basis at Rs. 440.15 on September 11, 2024. Since then, it has marked a high/low of Rs. 455.90 / Rs. 408.05. The scrip last closed at Rs. 430.50 as of September 20, 024. For the last 52 weeks' it has posted a high/low of Rs. 476.73 / Rs. 210.82.
The promoters' holding has been constant at 74.02% for the last three quarters ended on June 30, 2024. The counter is well managed above RI pricing, to tempt investors.
Review By Dilip Davda on September 23, 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 Synergy Green 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 Synergy Green Industries Rights Issue 2024 worth investing. The Synergy Green Industries Rights Issue 2024 Note sets the Rights Issue expectations in systematic way which tells you if Synergy Green Industries Rights Issue 2024 good to buy (good or bad / yes or no). The Rights Issue Forecast tells you weather to invest in Synergy Green Industries Rights Issue 2024 by providing Rights Issue recommendations i.e. subscribe, avoid and neutral.
Add a public comment...
FREE Intraday Trading (Eq, F&O)
Flat ₹20 Per Trade in F&O
|
|
