TIL Ltd. RI review (Apply)

• TIL is engaged in comprehensive industrial equipment products and related solutions.
• The company posted dismal performance for the reported periods of the offer document.
• It has orders worth Rs. 240 cr. as of December 31, 2023, that indicates prospects ahead.
• The counter is trading under PCAS with an indicative price of Rs. 234.80 as of April 25, 2024, and is also under ESM: Stage 2.
• Well-informed investors may park funds for the long term rewards.

PREFACE:
The RI document of this company is dated March 22, 2024, but till 25th morning, no details or document uploading was seen on BSE, while the said documents were available on NSE since last one week. Off late we are witnessing RI document uploading on regulator/exchanges website in the 11th hour only, and most of the RIs are surprisingly self-managed by the company itself. This company had a name and fame few years back, but it suffered a severe setback and is not trying to be on track with orders worth Rs. 240 cr. as of December 31, 2023. The counter is currently under ESM: Stage 2 and trading under PCAS with an indicative price of Rs.234.80 as of April 25, 2024 with thin volumes.

ABOUT COMPANY:
TIL Ltd. (TIL) erstwhile known as Tractors India Ltd., is offering a comprehensive portfolio of industrial equipment products and solutions relating to cranes including mobile cranes and rough terrain cranes, reach stackers and specialized equipment for the Indian defence industry. Through its predecessor entities and business, the company has been in operation since 1944. Its capabilities include the ability to create cranes of various sizes and capacities, ranging from 10 MT to 100 MT.

TIL is an established player in the provision of world-class infrastructure equipment in India, and are engaged in design, manufacture and marketing of a comprehensive range of material handling, port equipment and crushing and screening solutions, with integrated customer support and after sales service. It has long-standing partnerships with some of the leading global technology providers in the mobile crane manufacturing and lift truck manufacturing.

Headquartered in Kolkata, it has regional offices in Delhi and Chennai and area offices across the country. The Company has two factories in Eastern India - a fully integrated Plant at Kamarhatty and a state-of-the-art Plant at Kharagpur, West Bengal. The R&D centers at both the factories are equipped with latest software and cutting-edge technologies to enhance design excellence.

Its product portfolio consists of a wide range of Mobile Cranes (Rough Terrain, Truck Cranes, Industrial, Pick- n- Carry Cranes), Lattice Boom Crawler Cranes, Reach Stackers, Container Handlers, as well as a complete range of Crushing and Screening Plants and Equipment. It also offers a range of sophisticated, custom-made and application specific defence equipment. The key industries served by TIL includes material handling, ports, construction and road building, mining, oil and petrochemicals, steel, railways, airports, power, pharmaceutical and defence in Indian and exports to countries in SAARC, Middle East & Africa.

As of December 31, 2023, its Order Book amounted to Rs. 240 cr., with orders from marquee customers in the Indian defence ecosystem, including the defence sector public sector undertakings, the Indian armed forces and public sector undertakings involved in coal and steel. It is engaged in the supply of products to several prestigious defence projects in India, including the Prithvi missile programme, the Agni I missile programme, torpedo launcher programmes and amphibious floating bridge and ferry systems. In each of the above projects, its products form critical components, such as the launch systems for the ground based Prithvi missile launcher and Agni I missile launcher.

As of December 31, 2023, it had more than 500 people, including contractual workers located at head office, manufacturing facilities and zonal offices across the country. Further, the company also has employee persons on contract basis from time to time.

ISSUE DETAILS:
The company is coming out with a Rights Issue (RI) of 49075199 equity shares of Rs. 10 each at par value to mobilize Rs. 49.08 cr. The RI opens for subscription on April 26, 2024, and will close on May 10, 2024. The company is offering RI in the ratio of 28 for 10 to its eligible stakeholders as of the record date of March 22, 2024. Post allotment, RI shares will be listed on BSE and NSE. The company is spending Rs. 2.28 cr. for this RI process and from the net proceeds, it will utilize Rs. 37.50 cr. for working capital and Rs. 9.30 cr. for general corporate purposes.

This RI is self-managed by the company itself and Link Intime India Pvt. Ltd. is the registrar to the issue. Advisor to this RI is DAM Capital Advisors Ltd.

Post-RI, company's current paid-up equity capital of Rs. 17.53 cr. will stand enhanced to Rs. 66.60 cr. Based on the RI pricing, the company is looking for a market cap of Rs. 66.60 cr.

FINANCIAL PERFORMANCE:
On the financial performance front, for the last XXX years, the company has (on a consolidated basis) posted a total income/net profit/ - (loss) of Rs. 77.13 cr. / Rs. - (431.17) cr. (FY22), 50.53 cr. / Rs. - (91.02) cr. (FY23). It marked mega loss for FY22 with the exceptional items worth Rs. 259.53 cr.

For the 9M of FY24 ended on December 31, 2023, it reported a net profit of Rs.85.31 cr. on a total income of Rs. 36.49 cr. with the help of exceptional items worth Rs. 168.78 cr.

DIVIDEND POLICY:
The company has not declared any dividends since FY19. 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: 505196 (FV Rs. 10).
The scrip last closed on cum-right basis at Rs. 562.75 on March 21, 2024, and opened on an ex-right basis at Rs. 158.40 on March 22, 2024. Since then, it has marked a high/low of Rs. 234.80 / Rs. 158.40. The scrip last closed at Rs. 234.80 as of April 25, 2024. For the last 52 weeks' it has posted a high/low of Rs. 234.80 / Rs. 28.35.

The promoters' holding has increased from 56.30% as of September 30, 2023, to 74.99% as of March 31, 2024. The counter is currently under PCAS with an indicative price of Rs. 234.80 as of April 25, 2024 as well under ESM: Stage 2. Considering its last traded price, the offer at par is a not to miss opportunity.

Conclusion / Investment Strategy

No company has issued shares below par value and this company which had a name and fame few years back suffered a setback. Now it is trying to be on track with diversified product portfolio and an order worth Rs. 240 cr. on hands as of December 31, 2023. Over two and half fold increase in its post RI equity base, it may take long time for servicing. Based on its recent financial performance the issue appears a risky bet even at par value, but considering its current market price and future prospects, well-informed investors may park funds for the long term rewards.

Reviewer recommends Subscribing to the issue.

Review By Dilip Davda on April 25, 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 ).

More Til Ltd. RI Views / Analysis / Recommendations ...

Til Ltd. Review by Dilip Davda

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

TIL Ltd. RI review (Apply)

Conclusion / Investment Strategy

Review Author

Read more about TIL Rights Issue 2024