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• The company is engaged in the processing of fabrics used for various purposes and processes.
• It marked losses for FY22, and turned the corner in FY23. It posted bumper profits for 9M of FY24.
• Financial data is given only up to December 31, 2023 period, that raises eyebrows.
• Well-informed investors may park moderate funds for medium term.
ABOUT COMPANY:
Vinny Overseas Ltd. (VOL) is engaged in the processing of fabrics for shirting, suiting and dress materials through manufacturing process of weaving, dyeing, printing and finishing. The company obtains grey fabric from the domestic market and dyes it to the client's specifications based on quality of the fabric, size and other factors. It is also engaged in Job-Work for wholesale cloth merchants and also trade in grey cloth as per the order received from the customer.
Its products offering can be largely classified into Shirting Fabrics, Shooting Fabrics, Polyester Fabrics, Dress Materials and Cotton Fabrics. VOL's operations and facilities enable it to provide a number of textile products / processes for customers. The company focuses primarily on fabric quality by utilizing plant and machinery equipped with the necessary technologies, supplying excellent textiles at affordable costs, and preserving long-term relationships with clients.
The company has an in-house Testing and Quality Control ("QC") Team which undertakes testing and quality management. All its products are manufactured in-house at its manufacturing unit located in Ahmedabad, which enables the company to have an effective control over the manufacturing process and to ensure consistent quality of products.
The Company has also set up a wind power project of 1.650 MW capacity at village Vandhiya, Taluka- Bhachau, District Kutch using wind turbine generators in Gujarat. The basic purpose of installing this power project was to meet the heating and power requirement of the process plant. The Company has executed an agreement with Torrent Power Ltd. ("TPL") Dated April 12, 2010 whereas TPL has agreed to wheel the electricity generated by VOL for captive use from TPL receiving point to its processing plant and TPL shall purchase the surplus energy i.e. total energy generated by the Company minus the energy consumed by it at the rate as approved by Gujarat Electricity Regulatory Commission. As of December 31, 2023, it had 70 employees on its payroll.
ISSUE DETAILS:
The company is coming out with a Rights Issue of 232623311 equity shares of Rs. 1 each at a fixed price of Rs. 2 per share to mobilize Rs. 46.53 cr. The RI is opening for subscription on August 27, 2024, and will close on September 10, 2024. The company is offering RI in the ratio of 1 for 1 to its eligible stakeholders as of the record date of August 14, 2024. The full amount is to be paid on application for the number of shares applied. Post allotment, shares will be listed on BSE and NSE. The company is spending Rs. 0.50 cr. for this RI process, and from the net proceeds, it will utilize Rs. 17.00 cr. for repayment of certain borrowings, Rs. 13.87 cr. for purchase of machinery and construction of existing manufacturing plant, Rs. 10.00 cr. for working capital, and Rs. 5.15 cr. for general corporate purposes.
This RI is self-managed by the company and Bigshare Services Pvt. Ltd. is the registrar to the issue.
Post-RI, company's current paid-up equity capital of Rs. 23.26 cr. will stand enhanced to Rs. 46.53 cr. Based on the RI pricing, the company is looking for a market cap of Rs. 93.05 cr.
FINANCIAL PERFORMANCE:
Though the RI is opening in this month and many other RI aspirants have given financial data till March 2024, surprisingly this company is having financial data only till December 2023 in the offer document, that raises eyebrows.
On the financial performance front, for the last two fiscals, the company has posted a total income/net profit of Rs. 110.11 cr. / Rs. - (4.51) cr. (FY22), Rs. 106.22 cr. / Rs. 2.41 cr. (FY23). For 9M of FY24 ended on December 31, 2023, it earned a net profit of Rs. 3.18 cr. on a total income of Rs. 87.34 cr. Thus it turned the corner in FY23 and has posted boosted margins for 9M-FY24, which raise eyebrows.
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: 543670 (FV Re. 1).
The scrip last closed on cum-right basis at Rs. 4.81 on August 13, 2024, and opened on an ex-right basis at Rs. 3.41 on August 14, 2024. Since then, it has marked a high/low of Rs. 6.21/ Rs. 3.41. The scrip last closed at Rs. 5.09 as of August 23, 2024. For the last 52 weeks' it has posted a high/low of Rs. 6.21 / Rs. 2.07. The counter is currently under ESM: Stage 1.
The promoters' holding has been constant at 71.87% for the last three quarters ended with June 30, 2024. The counter is well managed above the RI price to lure investors.
Review By Dilip Davda on August 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 Vinny Overseas 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 Vinny Overseas Rights Issue 2024 worth investing. The Vinny Overseas Rights Issue 2024 Note sets the Rights Issue expectations in systematic way which tells you if Vinny Overseas Rights Issue 2024 good to buy (good or bad / yes or no). The Rights Issue Forecast tells you weather to invest in Vinny Overseas Rights Issue 2024 by providing Rights Issue recommendations i.e. subscribe, avoid and neutral.
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Or thru trading service providers instead RTA