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.