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• The company is engaged in a highly competitive and fragmented segment of financial services.
• Despite growth in its topline, it marked degrowth in its bottom line with declining margins.
• It has just 4 employees as of December 31, 2023.
• Though this RI appears lucrative as it is at a discount of around 51% based on its last traded price, there is no harm in skipping this "High Risk/Low Return" bet.
ABOUT COMPANY:
Viji Finance Ltd. (VFL) erstwhile known as Panjon Finance Ltd., was incorporated in the year 1994 and after completing 29 years, it continues to provide competitive and tailor- made financial services. The company specializes in providing financial services to corporate entities and individuals, comprising of corporate finance, retail loans, gold loans and personal loans.
Its primary focus lies within the Infrastructure, Housing, Infrastructural Development, Construction, and Vehicle Finance sectors in India. The company actively contributes to project financing through the utilization of long-term investment instruments. Additionally, it offers tailored financial solutions for major groups, aiming to address the diverse financial needs of businesses and individuals across all classes.
The Company is mainly into the business of fulfilling the financial requirements of all sections of the society. It has assisted many individuals and corporate by providing them with customized financial products and services which has given them access to low cost finance and in turn improve their standard of living and operations respectively. The company has a bouquet of products to cater to different customer needs. As of December 31, 2023, it had just 4 employees on its payroll.
ISSUE DETAILS:
The company is coming out with its Rights Issue (RI) of 60000000 equity shares of Re. 1 each at a fixed price of Rs. 1.50 per share to mobilize Rs. 9.00 cr. The RI is opening for subscription on May 28, 2024, and will close on June 10, 2024. The company is offering RI in the ratio of 8 for 11 to its eligible stakeholders as of the record date of May 15, 2024.The full amount it to be paid on application for the number of shares applied. Post allotment, shares will be listed on BSE, NSE and CSE (Calcutta Stock Exchange). The company is spending Rs. 0.40 cr. for this RI process, and from the net proceeds, it will utilize Rs. 8.25 cr. for augmenting its capital base, and Rs. 0.35 cr. for general corporate purposes.
The RI is self-managed by the company itself and Cameo Corporate Services Ltd. is the registrar to the issue, while Ankit Consultancy Pvt. Ltd. is the registrar to the company.
Post-RI, company's current paid-up equity capital of Rs. 8.25 cr. will stand enhanced to Rs. 14.25 cr. Based on the RI pricing, the company is looking for a market cap of Rs. 21.38 cr.
FINANCIAL PERFORMANCE:
On the financial performance front, for the last three fiscals, the company has posted a total income of Rs. 0.94 cr. / Rs. 0.45 cr. (FY21), Rs. 1.27 cr. / Rs. 0.44 cr. (FY22), and Rs. 2.09 cr. / Rs. 0.43 cr. (FY23). Thus while it has presented minuscule financial performance, its net profits have seen degrowth with mounting pressure on its margins for the reported periods.
For the last three fiscals, is net NPAs has seen wild fluctuations from 19.13% for FY21 to 3.05% for FY22, and then to 10.99% for FY23. This is a big alarm and raise concern. As per exchange filings, for FY24, the company has earned a net profit of Rs. 0.12 cr. on a total income of Rs. 1.93 cr. Thus, its top and bottom line posted decline compared to FY23.
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: 537820 (FV Re. 1).
The scrip last closed on cum-right basis at Rs. 4.04 on May 14, 2024, and opened on an ex-right basis at Rs. 3.11 on May 15, 2024. Since then, it has marked a high/low of Rs. 3.30 / Rs. 2.86. The scrip last closed at Rs. 3.06 as of May 24, 2024. For the last 52 weeks' it has posted a high/low of Rs. 3.30 / Rs. 1.04. The counter is currently under GSM: Stage 0 / ESM: Stage 2.
The promoters' holding has marked wild fluctuations. It was 44.97 (September 30, 2023), 39.83% (December 31, 2023) and 49.63% (March 31, 2024). The counter is well maintained above the RI price by vested interests to tempt investors. Based on its financial track record so far, it can be termed as a "High Risk/Low Return" bet.
Review By Dilip Davda on May 25, 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 Viji Finance 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 Viji Finance Rights Issue 2024 worth investing. The Viji Finance Rights Issue 2024 Note sets the Rights Issue expectations in systematic way which tells you if Viji Finance Rights Issue 2024 good to buy (good or bad / yes or no). The Rights Issue Forecast tells you weather to invest in Viji Finance Rights Issue 2024 by providing Rights Issue recommendations i.e. subscribe, avoid and neutral.
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