Aerpace RI (BSE) review (Avoid)

• AIL was primarily in the business of comprehensive consultation and related services.
• It intends to enter EV Car segment and that propelled the counter in the recent past.
• It has posted listless financial performance for the reported periods.
• It has negative P/E and NAV as of now. The counter is well operated to tempt investors.
• There is no harm in skipping this at par RI which is "High Risk/No Return" bet.

ABOUT COMPANY:
Aerpace Industries Ltd. (AIL) -erstwhile known as Supremex Shine Steels Ltd.- is engaged in comprehensive consultation and technical expertise in research, development, and manufacturing. Its experienced team supports the creation of exceptional products that exceed industry standards. By bridging the gap between technology and sustainability, AIL shape the future of transportation.

Additionally, the Company is in the process of development and manufacturing of cutting-edge electric vehicles (EV cars) and large-size drones through acquisition of Technologies and plateforms. In the realm of EV cars, it intends to design and produce state-of-the art electric vehicles that are high performance and environmentally friendly. Its focus is on delivering EV cars with a range of up to 500 kilometers on a 70 kWh modular swappable battery, making sustainable transportation accessible to
all.

Aerpace is a national flying system for inter-city and interstate travel, fully designed and crafted to provide an unparalleled travel experience. As of September 30, 2023, it had 6 employees on its payroll.

ISSUE DETAILS:
The company is offering Rights Issue (RI) of 105133333 shares of Re. 1 each at par value to mobilize Rs. 10.51 cr. The issue opens for subscription on November 28, 2023, and will close on December 07, 2023. It is issuing RI in the ratio of 10 for 3 to eligible stakeholders as of the record date of November 15, 2023. The full amount it to be paid with application for the number of shares applied. Post allotment, shares will be listed on BSE. AIL is spending Rs. 0.20 cr. for this RI process and from the net proceeds, it will utilize Rs. 8.00 cr. for investment in subsidiary Aerpace Supercars Pvt. Ltd., and Rs. 2.31 cr. for general corporate purposes.

The RI is solely lead managed by Navigant Corporate Advisors Ltd., and Purva Sharegistry (India) Pvt. Ltd., is the registrar of the issue.

Post-RI, AIL's current paid-up equity capital of Rs. 3.15 cr. will stand enhanced to Rs. 13.67 cr. Based on the RI pricing, the company is looking for a market cap of Rs. 13.67 cr.

FINANCIAL PERFORMANCE:
On the financial performance front, for the last three fiscals, AIL has posted a total income/net profit/ - (loss) of Rs. 2.44 cr. / Rs. 0.06 cr. (FY21), Rs. 0.05 cr. / Rs. - (0.12) cr. (FY22), and Rs. 2.04 cr. / Rs. 0.10 cr. (FY23). For the H1 of FY24 ended on September 30, 2023, it posted a net loss of Rs. - (0.64) cr. on a total income of Rs. 0.72 cr.

DIVIDEND POLICY:
The company has not declared any dividends for the last five fiscals. It will adopt a dividend policy post listings of RI shares based on its financial performance and future prospects.

SCRIP PERFORMANCE: BASED ON BSE WEBSITE DATA: SCRIP CODE: 534733 (FV Re. 1).
The scrip last closed on cum-right basis at Rs. 11.06 on November 13, 2023, and opened on an ex-right basis at Rs. 3.48 on November 15, 2023. Since then, it has marked a high/low of Rs. 3.96 / Rs. 3.48. The scrip last closed at Rs. 3.96 as of November 24, 2023. For the last 52 weeks' it has posted a high/low of Rs. 5.55 / Rs. 1.01.

The promoters' holding has been constant at 46.60% for the last two quarters ended with September 30, 2023. The counter is well managed above the RI price to tempt investors.

Conclusion / Investment Strategy

The counter is currently under ESM Stage 2 and is well managed above the RI price to lure investors. It has posted listless performance so far with a higher loss for H1 of FY24. The scrip was inflated under the pre-text of EV cars in which it intends to enter. Based on its negative P/E and NAV, There is no harm in skipping this at par RI.

Reviewer recommends Avoid to the issue.

Review By Dilip Davda on November 24, 2023

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 Aerpace Industries Limited RI Views / Analysis / Recommendations ...

Aerpace Industries Limited Review by Dilip Davda

The Aerpace Industries Rights Issue 2023 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 Aerpace Industries Rights Issue 2023 worth investing. The Aerpace Industries Rights Issue 2023 Note sets the Rights Issue expectations in systematic way which tells you if Aerpace Industries Rights Issue 2023 good to buy (good or bad / yes or no). The Rights Issue Forecast tells you weather to invest in Aerpace Industries Rights Issue 2023 by providing Rights Issue recommendations i.e. subscribe, avoid and neutral.

Aerpace RI (BSE) review (Avoid)

Conclusion / Investment Strategy

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